News
CALLON TO ACQUIRE CORE DELAWARE BASIN ASSETS
HOUSTON, May 3, 2023 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today signed two definitive agreements that streamline and focus Callon's operations, accelerate the achievement of its debt reduction target and allow for the initiation of a shareholder return program in the third quarter of 2023.
Callon has entered into a definitive agreement to acquire the membership interests of Permian-based Percussion Petroleum Operating II, LLC ("Percussion") in a cash and stock transaction valued at approximately $475 million and potential contingent payments of up to $62.5 million. Under the terms of the agreement, Percussion will receive $265 million of cash and a maximum of 6.46 million shares of Callon common stock. The transaction is structured as the acquisition by Callon Petroleum Operating Company of 100% of the limited liability company interests of Percussion.
Under a separate agreement, Callon agreed to sell all its assets in the Eagle Ford Shale to Ridgemar Energy Operating, LLC ("Ridgemar") for $655 million in cash and potential contingent payments of up to $45 million. The transaction is structured as the acquisition by Ridgemar of 100% of the limited liability company interests of Callon's wholly owned subsidiary Callon (Eagle Ford) LLC.
The transactions are subject to customary terms and conditions and are expected to simultaneously close in July 2023, both with an effective date of January 1, 2023.
In conjunction with the release of its first quarter results and the announcement of these transactions, a conference call is planned for 8 a.m. CDT, May 4, 2023. Slides accompanying today's releases are available at www.callon.com/investors.
Highlights
Solidifies Permian focus – Callon's operations will be focused on its more than 145,000 net acres in the prolific Permian Basin, executing its proven "Life of Field" Co-Development Model on an expanded Delaware Basin footprint. Callon's scale and singular focus on the Permian will enhance operational and capital efficiencies. The Company will have an inventory of more than 1,500 high-quality locations on a concentrated acreage position in the Permian Basin.
Increases Permian oil-weighting, improves margins – The oil-weighting of Callon's production in the Permian Basin is expected to increase post-closing. Pro forma cash operating costs per Boe are estimated to drop approximately 5% in the second half of 2023 through identified G&A and LOE savings.
Immediately accretive to key financial metrics – Acquisition attractively priced at 2.5x1 next 12 months EV/ EBITDA, excluding the impact of contingency payments. The deal will be immediately accretive to key financial metrics, including absolute and per share adjusted free cash flow and operating margins. In addition, the transaction is also expected to improve the conversion rate of EBITDAX to adjusted free cash flow through capital efficiencies.
Accelerates achievement of $2 billion total debt target – The transactions will strengthen Callon's balance sheet with total debt expected to be below $1.9 billion at closing.
Initiates shareholder return program – Callon's Board has authorized, subject to the closing of the transactions, a $300 million share buyback program over a two-year period.
PERCUSSION II ANNOUNCES COMMITMENT FROM CARNELIAN ENERGY CAPITAL
PERCUSSION PETROLEUM II ANNOUNCES COMMITMENT FROM CARNELIAN ENERGY CAPITAL
HOUSTON, March 24, 2020 (GLOBE NEWSWIRE) -- Percussion Petroleum II, LLC (“Percussion II”) today announced the closing of an equity commitment from Carnelian Energy Capital III, L.P., an investment fund managed by Carnelian Energy Capital Management, L.P. (“Carnelian”).
Percussion II, a Houston-based company led by executives John Campbell III and Brian Zwart, is pursuing an acquisition and development strategy in select onshore basins in North America; this is the successful strategy the team employed at its predecessor company, Percussion Petroleum, LLC (“Percussion I”), which was also in partnership with Carnelian.
Percussion I assembled an attractive position in the Northwest Shelf of the Permian Basin, including interests in approximately 380 gross producing wells and 22,000 net acres situated in the core of the Yeso formation in Eddy & Lea Counties, New Mexico, as well as associated water and midstream assets, all of which were sold to Spur Energy Partners, LLC in mid-2019.
“This is an exciting time to be well capitalized as we pursue new opportunities, and we are glad to again be partnering with Carnelian,” said Campbell and Zwart. “Our proven execution skill set, combined with Carnelian’s opportunistic investment style, provide us with the flexibility to move quickly as we evaluate and capture potential deals.”
“John and Brian’s entrepreneurial approach, tenacity and technical expertise are of the highest caliber,” added Tomas Ackerman, a Carnelian Partner. “We are looking forward to getting to work during this opportunity-rich time in the energy markets.”
About Percussion Petroleum II, LLC
Percussion Petroleum II is an oil and gas company based in Houston, Texas. Percussion II focuses on acquisition and development opportunities in select onshore basins in North America. For more information, please contact Percussion II by visiting www.percussionpetroleum.com.
About Carnelian Energy Capital Management, L.P.
Carnelian Energy Capital is an energy investment firm based in Houston, Texas. With approximately $1.8 billion of cumulative equity commitments, Carnelian focuses on lower-to-middle market equity investments in North America, primarily in the upstream sector, in partnership with best-in-class management teams. For more information, please contact Carnelian at info@carnelianec.com or visit www.carnelianenergy.com.
Spur Energy, KKR buy Permian assets from Percussion
Spur Energy Partners LLC, Houston, and investment firm KKR have partnered to acquire oil and gas production and development assets across the Lower 48, beginning with a signed agreement to acquire the Permian Northwest Shelf assets of Percussion Petroleum LLC, Houston.
The acquisition includes interests in 380 gross producing wells and 22,000 net acres in the Yeso formation in Eddy and Lea counties in New Mexico as well as associated water and midstream assets. In this year’s first quarter, the assets produced 9,200 net boe/d (85% liquids). Subject to closing conditions, the deal is expected to close in this year’s second quarter.
Spur is led by Chief Executive Officer Jay Graham, co-founder and former chief executive officer of WildHorse Resource Development Corp.
https://www.oilandgasinvestor.com/all-well-yeso-1711176#p=full
"All Is Well In The Yeso"
HOUSTON, April 03, 2018 (GLOBE NEWSWIRE) -- Percussion Petroleum, LLC (“Percussion”) today announced record results from four horizonal wells it recently completed in Eddy County, New Mexico, including the highest reported 30-day initial production for any horizontal Yeso formation (“Yeso”) well in southeast New Mexico’s Northwest Shelf.
Percussion, an independent oil and gas exploration and production company based in Houston, completed the Goodman 22 4H horizontal well (API #: 30-015-44366) across 4,835 feet of productive lateral within the Yeso. The well achieved a 30-day initial production rate of 1,208 barrels of oil equivalent per day on a three-stream basis (92% liquids, 80% oil). Production rates on a 24-hour basis peaked at 1,440 barrels of oil equivalent per day.
To date, Percussion has completed four consecutive horizontal wells in the Yeso with modern completion and stimulation techniques utilizing more than 1,000 pounds of proppant and 2,500 gallons of water per foot of lateral length. The four wells, which cost approximately $3 to $4 million each, average 4,915 feet of productive lateral at just under 3,000 feet TVD and have an average 30-day initial production rate of 1,080 barrels of oil equivalent per day on a three-stream basis (91% liquids, 80% oil).
“Our well results in the area continue to exceed legacy results,” said John Campbell III, Percussion’s Chief Executive Officer. “As we apply new completion technology across the multiple benches of the 2,000 foot-thick Yeso, we have seen the results continue to improve; the wells are demonstrating that our high oil IPs and increased EURs are repeatable across our position, yielding some of the best economics in the Lower 48.”
About Percussion Petroleum, LLC
Percussion is an independent oil and gas exploration and production company headquartered in Houston, Texas, led by John Campbell III, Lupe Carrillo and Brian Zwart. Percussion is currently pursuing horizontal Yeso opportunities in the Northwest Shelf in Eddy and Lea Counties, New Mexico, with more than 30,000 net acres currently owned. For more information, please visit www.percussionpetroleum.com.
About Carnelian Energy Capital Management, L.P.
Carnelian is an energy investment firm based in Houston, Texas. With $1 billion of cumulative equity commitments, Carnelian focuses on lower-to-middle market equity investments in the North American upstream, midstream and oilfield services sectors. For more information, please contact Carnelian at info@carnelianec.com or visit www.carnelianenergy.com.
February 01, 2016
Percussion Petroleum, LLC Announces Partnership With Carnelian Energy Capital
HOUSTON, TX--(Marketwired - February 01, 2016) - Percussion Petroleum, LLC ("Percussion" or the "Company") today announced the closing of an equity commitment from Carnelian Energy Capital Management, L.P. ("Carnelian") through Carnelian's fund, Carnelian Energy Capital, L.P.
Percussion, an independent oil and natural gas company headquartered in Houston, was formed to pursue an acquisition and exploitation strategy in select onshore basins in North America.
The founders of the Company, John Campbell III, Lupe Carrillo and Brian Zwart, previously worked together at two successful private-equity backed ventures, QR Energy, L.P. and Rockcliff Energy, LLC.
"We are excited to be partnering with Carnelian during this dynamic time in the energy markets," said Campbell. "Carnelian's financial expertise and value-added relationships, coupled with Percussion's proven exploitation skill set, provide us the flexibility to move quickly as we evaluate and capture opportunities."
Tomas Ackerman, a Carnelian Partner, said: "We are thankful to have the opportunity to team up with such highly talented and driven entrepreneurs. We look forward to working with them and are excited they chose Carnelian to be their partner in this venture."
About Percussion Petroleum, LLC
Percussion is an independent oil and natural gas company based in Houston, Texas. Percussion focuses on acquisition and exploitation opportunities in select onshore basins in North America.
About Carnelian Energy Capital Management, L.P.
Carnelian is a private equity firm based in Houston, Texas. Carnelian focuses on lower and middle market energy investments requiring between $35 million and $75 million of equity capital in the North American upstream, midstream and oilfield services sectors.