Callon selling Ward Co. assets to Cimarex


Callon Petroleum To Acquire Cimarex Energy’s Ward County Assets For $570 Million

Thursday, May 24, 2018 - 3:31pm

Callon Petroleum Co. (NYSE: CPE) has entered into a definitive agreement to acquire certain producing oil and gas properties and undeveloped acreage for total consideration of $570 million in cash from Cimarex Energy Co., the companies announced on May 24.
The company intends to fund the cash purchase price with the net proceeds of an equity offering announced concurrently with the announcement of this acquisition, cash on hand and/or incurrence of long-term indebtedness.
Key attributes of the acquisition include the addition of approximately 28,657 net surface acres to Callon’s Spur operating area in the Delaware Basin, over 90% HBP.
The current net production of approximately 6,831 barrels of oil equivalent per day (approximately 73% oil) for the first-quarter of 2018, based on information provided by the seller.
An estimated delineated base inventory of 212 net identified horizontal drilling locations that target the Third Bone Spring, Wolfcamp A and Wolfcamp B zones, with approximately 86% to be operated by Callon. Over 60% of the inventory is comprised of well locations with laterals of 7,500 feet or more.
The acquisition also includes additional potential horizontal drilling locations from emerging prospective zones in the Second Bone Spring and Wolfcamp C formations.
On a pro forma basis, assuming the closing of the acquisition, Callon’s aggregate Permian Basin position will include approximately 86,000 net surface acres concentrated in four core operating areas within both the Midland and Delaware Basins.
The pending acquisition is expected to close on or before September 10, 2018, subject to the completion of customary closing conditions.