APA Independent Director Boosts Stock Holdings by 115%

In a move that underscores confidence in the company's strategic direction, an independent director of APA Corporation has acquired 115% more stock in the energy giant. This significant increase in stock acquisition by Matthew Bob, who served as an independent director and board chair for Callon Petroleum Company, reflects a bullish outlook on APA's future prospects, particularly in light of its recent acquisition of Callon.

The acquisition of Callon Petroleum Company, announced on January 4, 2024, is a pivotal moment for APA. Valued at approximately $4.5 billion, inclusive of Callon’s net debt, the transaction is expected to be accretive to all key financial metrics. Each share of Callon common stock will be exchanged for a fixed ratio of 1.0425 shares of APA common stock, representing an implied value of $38.31 per share based on the closing price of APA common stock on January 3, 2024. This strategic move is expected to add to APA’s inventory of high-quality, short-cycle opportunities and increase oil mix, thereby strengthening APA’s position as a leading, diversified independent E&P with pro forma production of more than 500,000 barrels of oil equivalent (BOE) per day and pro forma enterprise value in excess of $21 billion.

The acquisition provides additional scale to APA’s operations across the Permian Basin, most notably in the Delaware Basin, where Callon has nearly 120,000 acres. This scale and balance in the Permian Basin are expected to create opportunities to capture meaningful operating synergies, estimated overhead, operational, and cost-of-capital synergies to exceed $150 million annually. Additionally, the pro forma balance sheet will remain strong with leverage at 1.1x net debt / adjusted EBITDAX, which indicates a robust financial position. The acquisition is aligned with APA’s overall portfolio strategy and fits all the criteria of their disciplined approach to evaluating external growth opportunities. The combination of Callon’s Delaware-focused footprint with APA’s Midland-focused footprint provides scale and balance in the Permian Basin, and APA’s oil-prone acreage in the Midland and Delaware Basin combined will increase by more than 50% following the transaction. This strategic acquisition is expected to unlock value for both shareholder bases, as increased scale will enable APA to realize significant overhead and cost-of-capital synergies. The pro forma footprint in the Permian will also create opportunities to capture meaningful operating synergies. The acquisition is expected to close during the second quarter of 2024, subject to customary closing conditions, termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and approval of the transaction by the shareholders of both companies.

The significant increase in stock acquisition by the independent director can have a positive impact on investor confidence and market sentiment towards APA Corporation. Matthew Bob, who served as an independent director and board chair for Callon Petroleum Company, has extensive executive and operational experience with U.S. onshore oil and gas companies. His knowledge of Callon will provide the board with valuable insight and guidance on the newly acquired company assets. This expertise can reassure investors that the company is in capable hands and that the acquisition of Callon will be managed effectively. Additionally, Bob's background in the industry and his role as a founder and managing partner of MB Exploration, LLC, further enhances his credibility and the confidence that investors may have in the company's future performance.



In summary, the decision by the independent director to acquire 115% more stock in APA Corporation reflects a strategic confidence in the company's future prospects. The acquisition of Callon Petroleum Company is expected to strengthen APA's position in the Permian Basin, create significant synergies, and unlock value for shareholders. This move, coupled with the expertise and credibility of Matthew Bob, is likely to bolster investor confidence and market sentiment towards APA Corporation.