Comprehensive Energy Data Intelligence
Information About Energy Companies, Their Assets, Market Deals, Industry Documents and More...
Callon Acquires $1.1 Billion Delaware Assets and Bows Out of Eagle Ford - Here's What You Need to Know
05/31/2023
Callon is set to purchase Percussion Petroleum's Delaware assets for $475 million while selling its Eagle Ford assets to Ridgemar for $655 million.
In a strategic step to optimize its operations, Callon Petroleum recently made headlines by sealing two deals on May 3, totaling a staggering $1.13 billion. The company is taking confident steps to bolster its presence in the Delaware Basin while bidding farewell to its stake in the Eagle Ford Shale.
Under the Permian Basin agreement, Callon is poised to acquire the coveted membership interests of Percussion Petroleum Operating II LLC. The transaction, carefully structured with a combination of cash and stock, has been appraised at an impressive value of around $475 million.
Closer Look at the Mergers and Acquisitions
- Callon's strategic move to acquire Percussion Petroleum brings in approximately 18,000 net acres located in Ward, Winkler, and Loving counties, Texas.
- This addition includes a treasure trove of about 70 high-return well locations in the 3rd Bone Spring, Wolfcamp A, and Wolfcamp B formations.
- The average lateral lengths of these wells span an impressive 10,000 feet, showcasing their robust potential. The acquired acreage seamlessly aligns with Callon's existing core positions in the Delaware Basin, thereby leveraging the company's profound subsurface knowledge and operational expertise.
- Percussion's assets have exhibited impressive estimated production figures, with an average of approximately 14,100 barrels of oil equivalent per day (boe/d) in April 2023. Notably, around 70% of this production consists of oil, reflecting the attractive profitability of the assets.
- Eagle Ford Assets: Callon's Eagle Ford assets cover a substantial area, amounting to around 52,000 net acres. These assets have demonstrated their production capabilities, with estimated average production of approximately 16,300 boe/d as of April. Within this production, an impressive 71% comprises oil, indicating the asset's significant contribution to Callon's overall hydrocarbon portfolio.
Callon Petroleum Strategic Partnership with Ridgemar Energy in Eagle Ford
Callon has entered into a definitive agreement to acquire the membership interests of Percussion Petroleum Operating II LLC, further expanding its presence in the Delaware Basin.
The transaction with Percussion Petroleum involves approximately $475 million. In a separate deal, Callon has agreed to sell all its assets in the Eagle Ford to Ridgemar Energy Operating LLC. The transaction is valued at $655 million, with potential additional contingent payments of up to $45 million based on WTI prices.
Ridgemar Energy Operating LLC, supported by Carnelian Energy Capital Management LP, will acquire 100% ownership of Callon's wholly owned subsidiary, Callon (Eagle Ford) LLC.
The completion of both transactions is subject to customary terms and conditions, with an expected simultaneous closing in July 2023. The effective date for both deals is set at January 1, 2023.
Callon Petroleum, led by President and CEO Joe Gatto, is poised to unlock substantial value from Percussion's assets while strategically aligning its operations. Gatto expressed excitement about the synergies between Percussion's assets and Callon's core Delaware position, foreseeing significant opportunities for growth.
In a recent press release, Gatto emphasized the transformative impact of these combined transactions on Callon's overall business landscape. He highlighted how these strategic moves will bolster the company's capital structure, enhance margins, and extend its already impressive inventory in the Permian Basin, known for its exceptional quality.
If you are looking for more information about energy companies, their assets, and energy deals, please, contact our sales office mapping@hartenergy.com, Tel. 619-349-4970 or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
Matador Acquires Additional Land in Delaware from Advance Energy for $1.6 Billion
Matador Resources Co. is making a big move in the oil and gas industry by acquiring Advance Energy Partners Holdings LLC, a major player in the northern Delaware Basin. The acquisition, which comes with a hefty price tag of at least $1.6 billion in cash, includes valuable assets in Lea County, N.M., and Ward County, Texas, as well as key midstream infrastructure.
Permian Resources Secures a Major Deal in the Thriving Delaware Basin
Permian Resources bolsters dominance in the Delaware Basin with strategic land acquisitions, expanding its portfolio by over 5,000 net leasehold acres and 3,000 royalty acres. In a stunning display of growth and strategic maneuvering, Permian Resources Corp., based in Midland, Texas, has made waves in the first quarter by securing a series of deals worth over $200 million in the highly sought-after Delaware Basin. This move solidifies their position as a player in the region.
The Williston Basin is a big area filled with layers of rock that sits next to the Rocky Mountains in western North Dakota, eastern Montana, and the southern part of Saskatchewan in Canada. This area covers roughly 110,000 square miles. Geologically, it's very similar to the Alberta Basin in Canada. People started drilling for oil in the Williston Basin back in 1936, and by 1954, most of the land where oil could likely be found was already claimed for drilling. The Bakken Formation with parts of Montana, North Dakota, Saskatchewan, and Manitoba has become one of only ten oil fields globally to yield over 1 million barrels per day (bpd) since the late 2000s. It is currently the third-largest U.S. shale oilfield, behind the Permian and Eagle Ford. The boom in the Bakken started around September 2008, coinciding with the U.S. housing market crash. The application of new technologies, such as swell packers enabling multiple-stage fracturing, significantly enhanced oil recovery, making the Bakken Formation a key player in the U.S. In 2022, the Bakken oil field saw big improvements in how much oil and gas it could produce. At the start of the year, 27 drilling rigs were working there, more than double the 11 rigs from the start of 2021. Important upgrades included making the Tioga Gas Plant able to process 150 million cubic feet more gas each day, and making the Dakota Access Pipeline bigger, increasing its oil transport capacity from 570,000 to 750,000 barrels every day.
Continental Resources is expanding its operations in the Midland Basin, including taking over some assets that used to belong to Occidental Petroleum. The company plans to use its expertise in exploration in this area.
Equinor and EQT Corporation have agreed that Equinor will exchange its operated assets in the Marcellus and Utica shale formations in Ohio for a stake in EQT’s non-operated interests in the Northern Marcellus formation.