Callon Petroleum has agreed to acquire US-based oil and gas operator Primexx Energy Partners in a $788m deal.
The transaction includes Primexx Energy Partners and its affiliates’ leasehold interests and associated oil, gas, and infrastructure assets.
These assets include nearly 300 identified core net locations, of which nearly two-thirds are two-mile laterals.
The deal consideration includes $440m in cash and 9.19 million shares of Callon Petroleum.
Blackstone Group-backed Primexx operates a contiguous footprint of 35,000 net acres in Reeves County in the Delaware Basin.
It reported net production of nearly 18,000boepd in the second quarter of this year.
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Callon Petroleum expects the acquisition of Primexx to increase its Delaware Basin presence to more than 110,000 net acres.
It is also expected to contribute to the firm’s efforts to transition to larger, more capital efficient development projects in the Delaware Basin.
Callon Petroleum president and CEO Joe Gatto said: “The Primexx transaction checks every operational and financial box on the list of compelling attributes of consolidation.
“The asset base adds substantial current oil production and a top-tier inventory to our Delaware portfolio, and fits squarely into our model of scaled, co-development of a multi-zone resource base.
“Our integrated, future development plans will benefit greatly from the combined Delaware scale and we expect to generate approximately 30% more adjusted free cash flow from the third quarter of 2021 through year-end 2023 under our conservative planning price assumptions.”
The deal is subject to regulatory approvals and other customary closing conditions. It is slated to complete in the fourth quarter of 2021.