A big deal in the Permian basin should be cause for fanfare in oil and gas circles. And yet, a distinct sad-trombone note sounds as Carrizo Oil & Gas Inc. falls into the arms of Callon Petroleum Co.
Callon is offering a 25% premium in an all-stock acquisition, based on Friday’s closing prices. But it’s the absolute price that tells the real story. Carrizo is selling out for $13.12 a share, getting it back to where it traded just less than three months ago – and way below the $23 level where it sold a slug of new shares last August. If Callon is engaging in some bottom-fishing, Carrizo is nonetheless grabbing eagerly at hook, line and sinker.