APA Corp to Acquire Callon Petroleum for $4.5B

TL;DR

APA Corp buying Callon Petroleum for $4.5B, boosting Permian presence.

AI Summary

APA Corporation announced on March 15, 2024, that it has entered into a definitive agreement to acquire Callon Petroleum Company for approximately $4.5 billion, including the assumption of debt. The transaction is expected to close in the second half of 2024, subject to customary closing conditions and regulatory approvals.

Why It Matters

This acquisition significantly expands APA Corporation's footprint in the Permian Basin, creating a larger, more efficient energy producer with enhanced scale and operational synergies.

Risk Assessment

Risk Level: medium — The acquisition is subject to regulatory approvals and closing conditions, and integration risks are inherent in large mergers.

Key Numbers

• $4.5B — Acquisition Value (Total transaction value for Callon Petroleum, including debt.)

Key Players & Entities

• APA Corporation (company) — Acquiring company
• Callon Petroleum Company (company) — Target company
• $4.5 billion (dollar_amount) — Acquisition price
• March 15, 2024 (date) — Announcement date
• second half of 2024 (date) — Expected closing period

FAQ

Key Financial Figures

• $0.625 — nge on which registered Common Stock, $0.625 par value APA Nasdaq Global Select
• $13.0 m — CM an aggregate fee for its services of $13.0 million, of which $2.5 million was paid u
• $2.5 million — its services of $13.0 million, of which $2.5 million was paid upon the execution of the Merg
• $6.37 million — eceived aggregate fees of approximately $6.37 million and $2.6 million, respectively. In addi
• $2.6 m — fees of approximately $6.37 million and $2.6 million, respectively. In addition, an af
• $160 — trated anticipated synergies of between $160 and $200 million attributable to operat
• $200 million — ticipated synergies of between $160 and $200 million attributable to operational and general
• $100 million — esented a significant increase from the $100 million in anticipated synergies provided by Co
• $50 million — egic rationale, including approximately $50 million per year of immediately available syner
• $95 m — ayable by Callon, in an amount equal to $95 million, and by APA, in an amount equal t
• $115 m — lion, and by APA, in an amount equal to $115 million, in each case following terminati
• $36.40 — equity value reference range for APA of $36.40 to $39.10. The disclosure on page 64
• $39.10 — ue reference range for APA of $36.40 to $39.10. The disclosure on page 64 of the Pro
• $37.05 — ty value reference ranges for Callon of $37.05 to $40.45 (without synergies) and $44.0
• $40.45 — eference ranges for Callon of $37.05 to $40.45 (without synergies) and $44.05 to $47.6

Filing Documents

• d799943d8k.htm (8-K) — 136KB
• 0001193125-24-069298.txt ( ) — 276KB
• apa-20240315.xsd (EX-101.SCH) — 3KB
• apa-20240315_lab.xml (EX-101.LAB) — 18KB
• apa-20240315_pre.xml (EX-101.PRE) — 11KB
• d799943d8k_htm.xml (XML) — 4KB

From the Filing

8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 15, 2024 APA CORPORATION (Exact name of registrant as specified in its charter) Delaware 001-40144 86-1430562 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 2000 Post Oak Boulevard , Suite 100 Houston , Texas 77056-4400 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713) 296-6000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.625 par value APA Nasdaq Global Select Market Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter). Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Item8.01 Other Events. As previously disclosed, on January 3, 2024, APA Corporation, a Delaware corporation (" APA "), entered into an Agreement and Plan of Merger (the " Merger Agreement ") with Callon Petroleum Company, a Delaware corporation (" Callon "), and Astro Comet Merger Sub Corp., a Delaware corporation and a wholly owned subsidiary of APA (" Merger Sub "), pursuant to which, upon the terms and subject to the conditions set forth therein, (1) Merger Sub will be merged with and into Callon (the " Merger "), with Callon surviving and continuing as the surviving corporation in the Merger as a wholly owned, direct subsidiary of APA, and (2) at the effective time of the Merger, each outstanding share of common stock of Callon (other than Excluded Shares (as defined in the Merger Agreement)) will be converted into the right to receive, without interest, 1.0425 shares of common stock of APA, with cash in lieu of fractional shares. APA has filed with the Securities and Exchange Commission (the " SEC ") a Registration Statement on Form S-4 (the " Registration Statement "), which included a preliminary joint proxy statement/prospectus for the solicitation of proxies in connection with the special meetings of APA's and Callon's stockholders, to be held on March 27, 2024, to vote upon, among other things, matters necessary to complete the Merger. The SEC declared the Registration Statement effective on February 15, 2024, and APA filed a definitive joint proxy statement/prospectus (the " Proxy Statement/Prospectus ") on February 16, 2024. APA commenced mailing of the Proxy Statement/Prospectus to its stockholders on or about February 16, 2024. Litigation Related to the Merger As of the date hereof, APA has, to its knowledge, received a total of two demand letters from its purported stockholders (the " APA Demand Letter s "), Callon has, to its knowledge, received a total of thirteen demand letters from its purported stockholders (together with the APA Demand Letters, the " Demand Letters ") and five complaints have been filed with respect to the Merger. The complaints are captioned as follows: Zachary Woodbury v. Callon Petroleum Company, et al., Case No. 1:24-cv-01271 (S.D.N.Y.) (the " Woodbury Action "), Dean Drulias v. Callon Petroleum Company, et al. , Cause No. 2024-11563 (Harris Cnty., Tex.) (the " Drulias Action "), William Durling v. Callon Petroleum Company, et al. , Case No. 2024-0203 1:24-cv-01271 (Del. Ch.) (the " Durling Action "), and William Ballard v. Callon Petroleum Company, et al. , Case No. 1:24-cv-01866 (S.D.N.Y) (the " Ballard Action ") and Robert Williams v. Callon Petroleum Company et al. , Case No. 1:24-cv-00331 (D. Del.) (the " Williams Action ") (collectively referred to as the " Stockholder Actions "). The Woodbury Action, the Drulias Action, the Durling Action, the Ballard Action and the Williams Action were filed by purported Callon stockholders and name Callon and the members of the Callon board of directors as defendants. The Drulias Action also names APA as a d

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