Key Takeaways
- APA said it would buy Callon Petroleum for $4.5 billion in an all-stock deal.
- The agreement will add 145,000 acres to APA’s footprint in the Permian Basin.
- The move comes after a record year for U.S. oil and gas mergers and acquisitions in 2023.
U.S. oil producer APA Corp. (APA) is buying rival Callon Petroleum (CPE) for $4.5 billion including debt, in an all-stock deal that will boost APA’s portfolio in the Permian Basin, the companies announced Thursday.
The agreement will add 145,000 drilling acres to APA’s footprint in the Permian Basin. Callon’s Delaware-focused assets will also complement APA’s Midland assets and boost total acreage in those areas by 50%, with the additional scale and cost synergies boosting the combined company’s credit profile, according to a statement.
“The acquisition is accretive and unlocks value for both shareholder bases, as increased scale will enable us to realize significant overhead and cost-of-capital synergies,” said APA CEO John J. Christmann IV.
The deal, which equates to $38.31 per share for Callon, was unanimously approved by the boards of both companies, and is expected to close in the second quarter.
APA’s acquisition of Callon comes after a record year for U.S. oil and gas mergers and acquisitions in 2023, when deals for the highly-prized Permian topped $100 billion. That was led by Exxon Mobil’s (XOM) $60 billion acquisition of Pioneer Natural Resources and Chevron’s (CVX) $53 billion purchase of Hess.
Callon shares were up 3.6% at $34.86 per share as of about noon E.T. Thursday following the news, while APA was down 7% at $34.20 per share.
Correction—Jan. 4, 2024: This article has been updated to reflect more recent price data.