December 13, 2016 / 10:45 PM / a year ago

Callon Petroleum buys Delaware Basin assets for $615 mln

Dec 13 (Reuters) - U.S. oil and gas producer Callon Petroleum Co said its unit would pay $615 million to buy acreage in the Southern Delaware Basin, spanning Texas and New Mexico.

The assets being acquired from American Resource Development LLC, American Resource Development Upstream LLC, and American Resource Development Midstream LLC, produced 1,945 barrels of oil equivalent per day in October 2016, the company said.

Callon said it plans to fund a part of the transaction with proceeds from its offering of 34 million shares, which represents about 21 percent of its outstanding shares.

There has been a slew of land acquisitions in West Texas as producers scramble to gain or expand positions in the top U.S. oil field, where drilling costs are low, in preparation for recovering oil prices.

Shares of Callon fell about 2.9 percent to $16.9 in after-hours trading. Callon’s stock has nearly doubled in value this year. (Reporting by John Benny in Bengaluru)

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