Callon Petroleum Falls Sharply on Deal to Buy Carrizo Oil for $3.2 Billion
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Shares of Callon Petroleum Co. (CPE) - Get Report fell sharply Monday after the company said it would acquire Carrizo Oil & Gas (CRZO) - Get Report in an all-stock transaction valued at $3.2 billion.
The combined company will have "scaled development operations across a portfolio of core oil-weighted assets in both the Permian Basin and Eagle Ford Shale," the companies said in a statement.
Carrizo holders will receive 2.05 Callon shares for each of their shares, the statement said.
Carrizo shares ended up 1.9% at $10.70. Callon shares slumped 16% to $5.38.
After the deal closes, Callon shareholders will hold 54% of the combined company and Carrizo holders 46%.
The transaction is expected to close during the fourth quarter.
Callon said second-quarter production was "materially impacted by weather-related downtime at a third-party gas processing plant."
In total, "third-party midstream issues negatively impacted the company's production by more than 4,000 barrels of oil equivalent per day during the second quarter," Callon said.