Aug 4 (Reuters) - Oil and gas exploration company Callon
Petroleum Co said on Wednesday it would buy assets in
the Delaware Basin from Primexx Energy Partners for $788
million, as it looks to expand its presence 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 Blackstone Group-backed Primexx $440
million in cash and issue about 9.2 million of its shares.
"The Primexx acquisition adds Delaware scale at an
attractive price, though questions on quality could persist,
analysts at brokerage Cowen wrote in a note.
Callon shares were 12% lower at $33.36, having gained more
than twofold this year, amid broader weakness in oil prices.
The company expects to generate about 30% more adjusted free
cash flow from the third quarter to the end of 2023.
The acquisition will increase its presence in the Delaware
Basin to more than 110,000 net acres through leasehold interests
as well as gas and infrastructure assets of Primexx and its
Separately, Callon reported a second-quarter net loss of
$0.25 per share, compared with a loss of $39.41 per share a year
earlier. Revenue rose about 23% to $394.1 million.
It said that it expects to produce between 95,500 and 97,500
barrels of oil equivalent per day in the third quarter.
(Reporting by Derek Francis in Bengaluru; Editing by Amy Caren
Daniel, Aditya Soni)