CM - Callon changes terms of Carrizo buyout offer to save deal - November 2019Callon Petroleum Co. revised the terms of its offer to buy out Carrizo Oil & Gas Inc. and postponed this week’s shareholder vote in order to save the deal, after major shareholders and two notable proxy firms came out against the transaction. Under terms of the revised deal, which Carrizo CEO Chip Johnson said created “compelling near- and long-term value” for shareholders given the current market environment, Carrizo shareholders will now receive 1.75 Callon shares for each of their...
Nov 15, 2019
CM - Paulson opposing Callon’s proposed Carrizo acquisition - September 2019Paulson & Co. Inc., which holds 9.5% of Callon Petroleum Co.’s outstanding shares, submitted a letter to Callon’s board opposing the company’s proposed $3.2 billion acquisition of Carrizo Oil & Gas Inc. and urged the board to pursue a sale of Callon instead. The Houston-based E&P firm said it remained confident the addition of Carrizo would make a stronger company. The proposed acquisition has not pleased shareholders as CPE share prices on the NYSE have fallen 36% since the...
Sep 13, 2019
CM - Midstream takes center stage during first part of September - September 2019The energy capital markets space had a strong midstream component in the first 10 days of September. Midstream companies issued $5.95 billion of the $7.05 billion aggregate principal senior notes during this period, according to Enverus’ Capitalize platform. Midstream represented 84% of notes announced Sept. 1-10, compared with 38% of notes so far in 2019. MPLX, the master limited partnership of Marathon Petroleum Corp., had the largest public offering, closing $2 billion in floating...
Sep 13, 2019
CM - PDC slate emerges in fiery proxy fight; Rice Bros. vs. EQT next - May 2019PDC Energy Inc. announced that its shareholders re-elected the three companybacked nominees to the board at its May 29 annual meeting, beating a challenge from
5.1% owner Kimmeridge Energy Management Co. in one of the highest-profile proxy
fights of the season. Shareholders re-elected president and CEO Barton
Brookman, Mark Ellis and Larry Mazza as directors, the company said, citing
a preliminary count. The Kimmeridge nominees were Ben Dell, Alice Gould
and James Adelson, and the private...
May 31, 2019
A&D Analyst Notes - August 29, 2018Diamondback Energy (FANG; $124.71—Aug. 22; Outperform; PT—$187)After missing out on the RSPP acquisition earlier this year, we saw Diamondback
Energy (FANG) as the most likely consolidator amongst the independent E&P
group, given its desire to increase scale and propensity for consolidation (EGN
marks the third corporate acquisition within the last two years). Despite
its recent acquisition of Ajax Resources, it was clear that FANG was
still on the hunt for a bigger deal. Ultimately,...
Aug 29, 2018
Capital Markets Analyst Notes - August 23, 2018CRZO announced it is acquiring 9.6M net acres in the Southern Delaware Basin for $215MM in cash…Valuing production of 9.6 MBoe/d (60% oil) at $35M/Boe/d implies a purchase price of ~$13M/acre, near the low end of recent transactions in the basin. CRZO estimates the new properties hold >100 net potential de-risked Wolfcamp A and B locations (7,000-ft. laterals)... We are adding 249 net risked locations (7,500-ft. laterals, 227 Wolfcamp A/B and 22 Bone Spring) to our NAV estimate for the new...
Aug 23, 2018
Carrizo sells $218MM in stock to fund Delaware buyCarrizo Oil & Gas Inc. priced a follow-on public offering of 9.5 million common shares at $23 each to gross nearly $218.5 million. Citigroup and Goldman Sachs were reported to be the sole underwriters and the company did not offer an overallotment option. Upon completion of the sale, Carrizo has over 91.6 million shares outstanding. The company is using proceeds from the offering to pay down its credit facility that would then allow it to buy about 9,600 net acres (10,600 gross) in...
Aug 23, 2018
What the Analysts are Saying About Capital Markets - June 21, 2018Carrizo Oil & Gas Inc. (NYSE: CRZO; $24.78 - June 8; Buy; PT: $31)From a tactical standpoint, we see CRZO as favorably positioned thanks to its Eagle Ford acreage which fetches LLS-based pricing in comparison to the Midland/WTI-based realizations garnered by SMID-caps more weighted to the Permian and/or DJ. For context, 80% of the company’s oil volumes come from the Eagle Ford, and management continues to message the flexibility it has to divert its ~five rigs to a more Eagle...
Jun 21, 2018
Kimmeridge says Carrizo growth stunted by debtKimmeridge Investment Management Co., which owns 8.1% of Carrizo Oil & Gas, Inc. through its KEMC Fund IV claims that the company’s debt levels would keep it from broadening its scale in the Permian Basin “sufficiently to become a dominant basin player absent a major sale or merger,” after holding “numerous constructive discussions” with management. KEMC said that should the board and management be unable or unwilling to follow “a viable strategic path within the next 12 months,” a sale of...
Apr 19, 2018
Carrizo redeems $100MM of its 2020 notesCarrizo Oil & Gas, Inc. is redeeming $100 million aggregate principal amount of its 7.5% senior notes due 2020, representing about 22% of the outstanding amount, at 101.875 on Feb. 18. The redemption will bring the 2020 principal amount outstanding to about $350 million. Carrizo has about $1.55 billion in long-term debt currently outstanding across five separate issues with maturities ranging from October of this year through 2028. VP and CFO David Pitts said the partial redemption...
Feb 09, 2018
Analyst Takes - December 22, 2017Approach Resources Inc (NASDAQ: AREX, $2.57 – Dec. 12, Neutral) AREX reported 3Q17 results below the Street after prior pre-announcement. AREX preannounced 3Q17 production on October 19 along with downward revised capex and LOE guidance. Harvey-related curtailments of 0.5 Mboe/d pulled 3Q17 output down to 11.5 Mboe/d, 4% lower than the existing 11.9 Mboe/d consensus. Reported 3Q17 EBITDAX of $13.8MM fell 4% below the likely partially stale $14.4MM consensus. AREX's $18.1MM...
Dec 22, 2017
Analyst Takes - October 11, 2017Anadarko Petroleum (NYSE: APC $44.81 – Sept 21, Neutral PT: $39.00)
APC unveiled a $2.5B share repurchase program authorized to extend through the
end of 2018 and initially targeting $1.0B by YE17. The full program represents ~10%
of outstanding shares at the company’s current share price, and also represents
~42% of its ~$6.0B cash balance at Q2-end. Management noted that its 2018
E&P program continues to target positive free cash flow at $50 oil while
total capital spending (including...
Oct 11, 2017
Capital markets slow as oil prices give back June gainsThe oversupply of oil continues to weigh down prices and dampen capital market activity. A late June rally in oil price proved to be short lived, with NYMEX front month oil prices plunging back to the mid $40s/bbl in early July.Though the number of completed financings has slowed, there were a few sizable deals done within the last few weeks. Carrizo Oil & Gas Inc issued over $725 million in various securities to fund a purchase of Delaware Basin acreage (PG 1), ONEOK Inc issued a...
Jul 12, 2017
LetterOne says investment in US not possible nowWhile ExL Petroleum was selling Delaware Basin assets to Carrizo Oil & Gas Inc. for $684 million, Mikhail Fridman’s investment group LetterOne was passing on an earlier deal to buy ExL for ~$700 million from Quantum Energy Partners. The Russian billionaire said investment in the US oil sector was not wise, concerned that the transaction could be opposed by the Committee on Foreign Investment in the US, the government panel that evaluates deals for threats to national...
Jul 12, 2017
CM - News Briefs - February 14, 2019Carrizo Oil & Gas announced 2019
DC&I spending guidance of $525-575
million, down 35% YOY. It expects to drill
65-75 net operated wells and complete 85-
95 net operated wells this year. It forecasts
2019 production of 66,800-67,800 boe/d,
which is an 11% YOY increase at midpoint. Southwestern Energy will spend
$1.08-1.18 billion this year on capital
expenditures, adjusted $200 million
downward from original plans and
reflecting a $120 million lower spend than
in 2018. Southwest...
Feb 14, 2019