Houston-based Callon Petroleum, Permian and Eagle Ford driller, said Wednesday it will acquire leasehold interests and related oil, gas and infrastructure assets of Delaware Basin operator Primexx Energy Partners in a cash ($440 million) and stock transaction valued at $788 million. Dallas-based Primexx has a contiguous leasehold of 35,000 net acres in Reeves County with 2021Q2 net production of about 18,000 boed (61 percent oil). The acreage has about 300 identified net core locations that Callon said “will support Callon’s continued shift to larger, more capital efficient development projects in the Delaware Basin.” Callon will add Primexx’s 2-rig program into its multi-year development plan.
Joe Gatto, president and CEO, said, “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.”
The deal increases Callon’s position in Delaware Basin to more than 110,000 net acres and includes Primexx’s gathering and water management infrastructure that includes 80,000 b/d of water recycling capacity and 60 miles of water transfer lines – more than doubling Callon’s water recycling capacity. Callon said “this significantly enhances Callon’s ability to manage its freshwater impact in the Delaware Basin while reducing overall development and operating costs.”
Callon also said Wednesday at end of 2021Q2 it had 1,359.2 net wells producing in Permian (Delaware and Midland basins) and Eagle Ford with net daily production of 89,000 boed (63 percent oil). Development activity in second half of 2021 includes 3-to-4 drilling rigs. Completion activity and wells turned to production will focus more on Midland and Delaware basins in Q3 and Q4. Callon expects to produce 95,500-to-97,500 boed (64 percent oil) in 2021Q3.