APA Acquires Callon Petroleum in $4.5 Billion Deal

The company expects production to exceed 500,000 barrels per day.

January 04, 2024

The energy company APA Corporation announced that it has entered a definitive agreement to acquire Callon Petroleum in an all-stock transaction valued at approximately $4.5 billion, inclusive of Callon’s net debt.

Callon’s assets provide additional scale to APA’s operations across the Permian Basin, most notably in the Delaware Basin, where Callon has nearly 120,000 acres. On a pro forma basis, total company production exceeds 500,000 barrels of oil equivalent per day and enterprise value increases to more than $21 billion.

“This transaction is aligned with APA’s overall portfolio strategy and fits all the criteria of our disciplined approach to evaluating external growth opportunities. Callon has built a strong portfolio in the Permian Basin that is complementary to our existing Permian assets and rounds out our opportunity set in the Delaware,” said John J. Christmann IV, APA’s CEO and president.

Christmann added, “APA has a proven ability to deliver strong results from its unconventional assets in the Permian Basin, and we look forward to building on the progress that the team at Callon has made within its asset base.”

“We are very proud of the significant steps we have taken to enhance Callon’s asset base, operational performance and balance sheet over the past several years,” said Joe Gatto, Callon’s president and CEO. “This combination with APA now provides for an enhanced value proposition for our shareholders built on their depth of experience and strong execution in the Permian Basin, flexibility for increased capital allocation and ongoing delineation and optimization efforts.”

The transaction has been unanimously approved by the boards of directors of both APA and Callon and is expected to close during the second quarter of 2024, subject to customary closing conditions.

Following closing, the company’s worldwide pro forma production mix will be approximately 64% in the United States and 36% internationally.

The billion-dollar oil acquisition is the first to occur in 2024, though it follows last year’s major mergers and acquisitions. Exxon Mobil agreed to buy Pioneer Natural Resources for approximately $64.5 billion and Chevron acquired Hess Corporation in a deal valued at $53 billion in October 2023.