HOUSTON, Sept. 9, 2019 /PRNewswire/ -- Callon Petroleum
Company (NYSE: CPE) today issued the following statement in
response to the filing by Paulson & Co. Inc.:
Callon maintains an open dialogue with all of our
shareholders and welcomes constructive input toward the shared goal
of maximizing shareholder value. Our Board of Directors is
committed to acting in the best interests of Callon shareholders
and will continue to take actions to deliver returns on their
behalf.
The Board routinely surveys the strategic
landscape and evaluates various opportunities to maximize
shareholder value in the context of the prevailing operational,
financial and strategic environments and remains committed to this
ongoing effort. To this end, the Callon Board, with the assistance
of outside financial and legal advisors, carefully evaluated the
combination with Carrizo and determined that the transaction
delivers compelling value to Callon shareholders.
We remain confident in the strategic and financial
benefits of our combination with Carrizo, which will create a
leading oil and gas company with scaled development operations
focused on the Permian Basin in a transaction that is accretive on
all per share metrics. The pro forma company will allocate more
capital to the Permian Basin than the combined Callon and Carrizo
standalone development plans, supported by strong free cash flow
from the Eagle Ford Shale.
The benefits of the combination will include:
- A critical mass of complementary high-quality assets in the
Permian to better compete in this dynamic basin;
- An integrated development program with scaled operations
yielding meaningful cost reductions and cycle time improvements
through the deployment of dedicated crews and equipment in
simultaneous operations;
- Optimized capital allocation across the combined portfolio,
including an expanded opportunity set for asset monetizations;
- An accelerated free cash platform that de-risks the capital
structure by driving leverage below 2x, with a strong liquidity
profile and no near-term maturities;
- Run-rate operational synergies of $65-$85 million and
cash G&A savings of $35-$45 million per
year driven by controllable, structural changes in the business;
and
- Total synergy present value of $850
million, the majority of which accrues to Callon
shareholders.
Further, as evidenced by our strong second quarter 2019
operational and financial results, we continue to make significant
progress delivering on our strategy. We started the year by
focusing on four key areas that we firmly believe will create
significant value for investors over time:
- Improving our cash return on capital invested
- Generating sustainable free cash flow
- Reducing our leverage using free cash flow and asset
monetizations
- Focusing on the optimization of our core portfolio with a
development model that maximizes the value of our multi-zone
inventory
The combination of our two high quality asset
bases and complementary teams accelerates our ability to deliver on
these goals on a sustained basis.
Callon and Carrizo continue to expect that the
transaction will close during the fourth quarter of 2019, subject
to customary closing conditions, including the approval of
shareholders of both companies.
As previously announced on July 15,
2019, Callon and Carrizo entered into a definitive agreement
under which Callon will acquire Carrizo in an all-stock transaction
valued at $3.2 billion. Under the
terms of the agreement, Carrizo shareholders will receive a fixed
exchange ratio of 2.05 Callon shares for each share of Carrizo
common stock they own. Following the close of the transaction,
Callon shareholders will own approximately 54% of the combined
company, and Carrizo shareholders will own approximately 46%, on a
fully diluted basis. The all-stock transaction is intended to be
tax-free to Carrizo shareholders.
About Callon
Callon is an independent energy company focused on the
acquisition and development of unconventional onshore oil and
natural gas reserves in the Permian Basin in West Texas.
This news release is posted on Callon's website
at www.callon.com, and will be archived for subsequent review
under the "News" link on the top of the homepage.
No Offer or Solicitation
Communications
herein do not constitute an offer to sell or the solicitation of an
offer to buy any securities or a solicitation of any vote or
approval with respect to the proposed transaction or otherwise, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. Communication herein do not constitute a notice of
redemption with respect to or an offer to purchase or sell (or the
solicitation of an offer to purchase or sell) any preferred stock
of Carrizo Oil & Gas, Inc.
Additional Information and Where to Find
It
In connection with the proposed transaction,
Callon Petroleum Company ("Callon") has filed with the Securities
and Exchange Commission (the "SEC") a registration statement on
Form S-4 (the "Registration Statement"), which contains a
preliminary joint proxy statement of Callon and Carrizo that also
constitutes a preliminary prospectus of Callon. The information in
the preliminary joint proxy statement/prospectus is not complete
and may be changed. After the Registration Statement is declared
effective by the SEC, Callon and Carrizo intend to mail a
definitive proxy statement/prospectus and accompanying WHITE proxy
cards to shareholders of Callon and shareholders of Carrizo. This
communication is not a substitute for the joint proxy
statement/prospectus or the Registration Statement or for any other
document that Callon or Carrizo may file with the SEC and send to
Callon's shareholders and/or Carrizo's shareholders in connection
with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF
CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND
JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED
BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the
Registration Statement and joint proxy statement/prospectus, as
each may be amended from time to time, and other relevant documents
filed by Callon and Carrizo with the SEC (when they become
available) through the website maintained by the SEC at
www.sec.gov. Copies of documents filed with the SEC by Callon will
be available free of charge from Callon's website at www.callon.com
under the "Investors" tab or by contacting Callon's Investor
Relations Department at (281) 589-5200 or IR@callon.com. Copies of
documents filed with the SEC by Carrizo will be available free of
charge from Carrizo's website at www.carrizo.com under the
"Investor Relations" tab or by contacting Carrizo's Investor
Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy
Solicitation
Callon, Carrizo and their respective
directors and certain of their executive officers and other members
of management and employees may be deemed, under SEC rules, to be
participants in the solicitation of proxies from Callon's
shareholders and Carrizo's shareholders in connection with the
proposed transaction. Information regarding the executive officers
and directors of Callon is included in its definitive proxy
statement for its 2019 annual meeting filed with the SEC on
March 27, 2019. Information regarding
the executive officers and directors of Carrizo is included in its
definitive proxy statement for its 2019 annual meeting filed with
the SEC on April 2, 2019. Additional
information regarding the persons who may be deemed participants
and their direct and indirect interests, by security holdings or
otherwise, will be set forth in the Registration Statement and
joint proxy statement/prospectus and other materials when they are
filed with the SEC in connection with the proposed transaction.
Free copies of these documents may be obtained as described in the
paragraphs above.
Cautionary Statement Regarding Forward-Looking
Information
Certain statements in this communication
concerning the proposed transaction, including any statements
regarding the expected timetable for completing the proposed
Carrizo transaction, the results, effects, benefits and synergies
of the proposed transaction, future opportunities for the combined
company, future financial performance and condition, guidance and
any other statements regarding Callon's or Carrizo's future
expectations, beliefs, plans, objectives, financial conditions,
assumptions or future events or performance that are not historical
facts are "forward-looking" statements based on assumptions
currently believed to be valid. Forward-looking statements are all
statements other than statements of historical facts. The words
"anticipate," "believe," "ensure," "expect," "if," "intend,"
"estimate," "probable," "project," "forecasts," "predict,"
"outlook," "aim," "will," "could," "should," "would," "potential,"
"may," "might," "anticipate," "likely" "plan," "positioned,"
"strategy," and similar expressions or other words of similar
meaning, and the negatives thereof, are intended to identify
forward-looking statements. The forward-looking statements are
intended to be subject to the safe harbor provided by Section 27A
of the Securities Act of 1933, Section 21E of the Securities
Exchange Act of 1934 and the Private Securities Litigation Reform
Act of 1995.
These forward-looking statements involve significant risks
and uncertainties that could cause actual results to differ
materially from those anticipated, including, but not limited to,
failure to obtain the required votes of Callon's shareholders or
Carrizo's shareholders to approve the transaction and related
matters; whether any redemption of Carrizo's preferred stock will
be necessary or will occur prior to the closing of the transaction;
the risk that a condition to closing of the proposed transaction
may not be satisfied, that either party may terminate the merger
agreement or that the closing of the proposed transaction might be
delayed or not occur at all; potential adverse reactions or changes
to business or employee relationships, including those resulting
from the announcement or completion of the transaction; the
diversion of management time on transaction-related issues; the
ultimate timing, outcome and results of integrating the operations
of Callon and Carrizo; the effects of the business combination of
Callon and Carrizo, including the combined company's future
financial condition, results of operations, strategy and plans; the
ability of the combined company to realize anticipated synergies in
the timeframe expected or at all; changes in capital markets and
the ability of the combined company to finance operations in the
manner expected; regulatory approval of the transaction; the
effects of commodity prices; and the risks of oil and gas
activities. Expectations regarding business outlook, including
changes in revenue, pricing, capital expenditures, cash flow
generation, strategies for our operations, oil and natural gas
market conditions, legal, economic and regulatory conditions, and
environmental matters are only forecasts regarding these
matters.
Additional factors that could cause results to differ
materially from those described above can be found in Callon's
Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly
Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended
June 30, 2019, each of which is on
file with the SEC and available from Callon's website at
www.callon.com under the "Investors" tab, and in other documents
Callon files with the SEC, and in Carrizo's Annual Report on Form
10-K for the year ended December 31,
2018 and in its subsequent Quarterly Reports on Form 10-Q
for the quarter ended March 31, 2019,
and the quarter ended June 30, 2019,
each of which is on file with the SEC and available from Carrizo's
website at www.carrizo.com under the "Investor Relations" tab, and
in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they
are made and are based on information available at that time.
Neither Callon nor Carrizo assumes any obligation to update
forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements were made or to
reflect the occurrence of unanticipated events except as required
by federal securities laws. As forward-looking statements involve
significant risks and uncertainties, caution should be
exercised against placing undue reliance on such
statements.
Contact for Callon
Mark
Brewer
Director of Investor Relations
Callon Petroleum Company
(281) 589-5200
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SOURCE Callon Petroleum Company