Callon Petroleum to buy Delaware Basin assets from Primexx for $788 mln

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Aug 4 (Reuters) – Oil and gas exploration company Callon Petroleum Co (CPE.N) said on Wednesday it would buy assets in the Delaware Basin from Primexx Energy Partners for $788 million, as it seeks to expand its footprint in the westernmost shale field within the Permian.

The Permian basin of Texas and New Mexico is at the heart of the shale boom that has helped the United States become the world’s biggest crude oil producer.

Callon will pay privately held Primexx $440 million in cash and issue about 9.2 million of its shares. The company’s stock closed at $37.91 on Tuesday.

It expects the deal to generate about 30% more free cash flow from the third quarter to the end of 2023, Callon said in a statement.

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Callon is slated to buy leasehold interests as well as the related oil, gas and infrastructure assets of Primexx and its affiliates, which will increase its position in the Delaware Basin to 11,000 net acres.

In a separate release, Callon reported a second-quarter net loss of $11.7 million, or $0.25 per diluted share, compared with a loss of $1.56 billion, or $39.41 per share, a year ago. Revenue rose about 23% to $394.1 million.

It added that it expects to produce between 95.5 and 97.5 million barrels of oil per day in the third quarter.