Callon Petroleum Acquires Carrizo Oil in Houston-based Corporate Merger for $ 1.21 Billion

Callon Petroleum announced Monday that it would acquire Carrizo Oil & Gas at a price of more than $ 1.2 billion in a combination of two oil producers in Houston.

The deal is a near-equals merger centered exclusively on Texas oil and shale gas in the Permian boom and Eagle Ford shale. The all-share transaction will give Callon shareholders a 54% stake and Carrizo investors 46%.

The deal offers a 25% premium on the Carrizo stock price from Friday.

Their goal is to focus largely on Permian's rapidly growing Permian Basin, which is now moving to a more productive manufacturing mode with repeatable drilling efforts, "said Joe Gatto, Callon's General Manager. The more mature assets of Eagle Ford and Permian will help generate cash flow and production at lower cost, he said.

RELATED: Callon Petroleum sells assets after relocation of Houston headquarters

"We are excited about this transformational transaction, creating a differentiated oil and gas company by integrating core asset bases into first-rate basins," Gatto said.

Callon has just moved its Mississippi headquarters to Houston earlier this year and the merged company will stay in Houston.

Over the past two years, Carrizo has focused on growth in the Permian while selling its other assets in Colorado and the Appalachian green basin closer to the East Coast.

The combined Callon will hold approximately 200,000 net acres in Eagle Eagle and Permian, including over 90,000 net acres in the Delaware Basin.

The company will have eleven members of the board of directors, including the current eight members of Callon 's board of directors and three appointed members of Carrizo.

Callon and Carrizo each employ more than 200 people. Layoffs are therefore expected in case of duplication.

The transaction is expected to close in the fourth quarter of this year.

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