HOUSTON - APA Corporation (NASDAQ: APA) has completed its acquisition of Callon (NYSE:CPE) Petroleum Company (NYSE: CPE), a move that is expected to enhance its operations in the Permian Basin, the company announced today. The transaction received approval from the shareholders of both companies at special meetings on March 27, 2024.
John J. Christmann IV, CEO of APA, expressed confidence in the acquisition, stating that the integration of Callon's assets will provide scale to APA's Delaware position and bring balance to its overall Permian asset base. Christmann anticipates that the acquisition will lead to improved capital productivity, enhanced well performance, and significant cost synergies.
The acquisition increases APA’s daily production to approximately 500,000 barrels of oil equivalent (BOE), with roughly two-thirds of that production coming from the Permian Basin. APA gains approximately 120,000 net acres in the Delaware Basin and 25,000 net acres in the Midland Basin through the deal. Callon's production in the fourth quarter was reported at 103,000 BOE per day, with 58% oil and 80% liquids.
Under the terms of the merger agreement, each share of Callon common stock has been converted into the right to receive 1.0425 shares of APA common stock, and Callon stock is no longer listed on the NYSE. APA has issued approximately 70 million shares of common stock in connection with the transaction.
APA Corporation is an oil and natural gas exploration and production company with operations in the United States, Egypt, the United Kingdom, and offshore Suriname. The company has stated that the acquisition aligns with its strategy and expects it to unlock shareholder value.
This news is based on a press release statement and includes forward-looking statements that involve risks and uncertainties. These include potential challenges in achieving the anticipated benefits and synergies from the acquisition, integrating operations, and unforeseen liabilities. APA has indicated that it does not undertake any obligation to update forward-looking statements as a result of new information or future developments.
InvestingPro Insights
As APA Corporation (NASDAQ: APA) embarks on a new chapter following its acquisition of Callon Petroleum Company, investors and analysts are closely monitoring its financial health and market performance. According to InvestingPro, several metrics stand out that could influence the company's trajectory in the wake of this strategic expansion.
APA's market capitalization stands at a robust $10.37 billion, reflecting investor confidence in its business model and future prospects. The company's P/E Ratio, as of the last twelve months ending Q4 2023, is attractively low at 3.46, suggesting that the stock may be undervalued compared to earnings. This could potentially attract value investors looking for stocks with earnings-based growth potential. Additionally, APA's Gross Profit Margin for the same period is notably high at 70.86%, indicating a strong ability to translate sales into profit, a positive sign for stakeholders interested in the company's efficiency and profitability.
From an investment standpoint, APA's stock has experienced a strong return over the last month, with a 13.05% price total return. This performance is particularly noteworthy in the context of the recent acquisition and may reflect optimism about the company's future growth and earnings potential. Moreover, APA has demonstrated a commitment to shareholder returns by maintaining dividend payments for an impressive 54 consecutive years, currently yielding 2.91% as of the latest data.
For those looking for more in-depth analysis and additional insights, there are 8 more InvestingPro Tips available that can provide further guidance on APA's investment potential. These include observations on earnings revisions and stock price volatility, which could be crucial for investors making informed decisions in a dynamic market environment. To access these tips and enhance your investment strategy, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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