Houston-based Callon Petroleum said last week it is acquiring Percussion Petroleum Operating’s 18,000 net acres in Loving, Ward and Winkler counties in west Texas and divesting its assets in Eagle Ford Shale in south Texas to focus on Permian Basin. The Percussion deal is a cash-and-stock transaction valued at $475 million ($265 million cash). Callon agreed to sell its Eagle Ford assets to Ridgemar Energy Operating for $655 million. Closings are expected in July.
Callon said it will focus on 145,000 net acres in Permian Basin with an inventory of 1,500 high-quality locations. The new acreage is largely contiguous with Callon’s existing core positions in Delaware Basin. Estimated production from Percussion’s assets was 14,100 boed in April (70 percent oil).
“Callon is uniquely positioned to capture value from this high-quality oil asset that is complementary to our core Delaware position,” Joe Gatto, president and CEO, said May 3. “The combined transactions strengthen our capital structure, improve our margins and lengthen our top-tier Permian inventory… Our strategic Eagle Ford exit funds our Delaware expansion and focuses our people, capital and operations on our premium Permian position.” Callon’s Eagle Ford assets are comprised of 2,000 net acres with April production of 16,300 boed (70 percent oil).