APA Corporation to Acquire Callon Petroleum Company in All-Stock Transaction

• Complements and enhances APA’s asset base in the Permian Basin; expected to be accretive to key financial metrics;
  
• Adds to APA’s high-quality, short-cycle development inventory and increases oil mix; and
• Strengthens APA’s position as a leading, diversified independent E&P with pro forma production of more than 500,000 barrels of oil equivalent (BOE) per day and pro forma enterprise value in excess of $21 billion.*
  

HOUSTON, Jan. 04, 2024 (GLOBE NEWSWIRE) --  APA Corporation (“APA” or the “Company”) (NASDAQ: APA) and Callon Petroleum Company (“Callon”) (NYSE: CPE) have entered into a definitive agreement under which APA will acquire Callon in an all-stock transaction valued at approximately $4.5 billion, inclusive of Callon’s net debt. Under the terms of the transaction, each share of Callon common stock will be exchanged for a fixed ratio of 1.0425 shares of APA common stock. The transaction is expected to be accretive to all key financial metrics and add to APA’s inventory of high quality, short-cycle opportunities. 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 BOE per day and enterprise value increases to more than $21 billion.*

Key Highlights

• Combination of Callon’s Delaware-focused footprint with APA’s Midland-focused footprint provides scale and balance in the Permian Basin;  
• APA’s oil-prone acreage in the Midland and Delaware Basin combined will increase by more than 50% following the transaction;
• Expected to be accretive on key financial and value metrics;
• Estimated overhead, operational and cost-of-capital synergies to exceed $150 million annually; and
• Additional scale anticipated to improve credit profile; pro forma balance sheet will remain strong with leverage at 1.1x net debt / adjusted EBITDAX.**
  

Management Commentary

“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. “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. The pro forma footprint in the Permian will also create opportunities to capture meaningful operating synergies.”