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Paulson & Co. Votes Against Proposed Callon Acquisition of Carrizo

- Paulson Welcomes ISS' and Glass Lewis' Rejection of Carrizo Deal -

- Callon Third Quarter Results Demonstrate Strength of Stand-Alone Permian Focus -

NEW YORK, Nov. 6, 2019 /PRNewswire/ -- Paulson & Co. Inc. ("Paulson"), as manager of funds holding 21.6 million shares, or 9.5% of those outstanding, of Callon Petroleum Company ("Callon" or the "Company") (CPE), today voted its Callon shares against the proposed acquisition of Carrizo Oil & Gas Inc. ("Carrizo") (CRZO).

Paulson notes that Institutional Shareholder Services ("ISS") and Glass Lewis & Co. ("Glass Lewis") both recommend that Callon shareholders vote against the Company's proposed acquisition of Carrizo.  Both proxy advisors provide valuable, independent perspectives to constituencies concerning proxy matters.

Callon shareholders and analysts have expressed a strong interest in our views and have communicated that they share many of our concerns.  The Callon Board, which has to date been unresponsive to any of our communications, should listen to its shareholders.

If, on November 14th, Callon shareholders reject the approval of the proposed acquisition, Paulson requests that the Callon Board should follow the will of its shareholders and direct management to focus on:

  • Reducing G&A costs, which have risen by over $12 million for the first nine months of 2019 versus 2018;
  • Focusing its SIMOPS mega-pad development on its extensive stand-alone acreage;
  • Delivering on generating true corporate-level free cash flow organically starting in the fourth quarter of this year assuming $50/bbl, as previously guided (page 14 of its February 26, 2019 presentation); and
  • Engaging new, independent advisors to pursue a sale of Callon.

As ISS states, a standalone Callon would be less risky and, combined with a reduction in its own operating costs, a shorter path to shareholder value than an overpriced acquisition.  As Glass Lewis concludes, investors could be pleasantly surprised once the Company begins to generate positive free cash flow on a standalone basis, or if the board actively solicited interest from would-be suitors, which the board didn't do before signing the merger agreement with Carrizo.

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Paulson, founded in 1994, is an investment management firm headquartered in New York.

Contact Details

Marcelo Kim

Paulson & Co. Inc.

212-599-6628

Cautionary Statement

Paulson & Co. Inc. ("Paulson") is not soliciting proxies in connection with any matter brought before shareholders of the companies identified in this letter or press release.

Clients, funds and accounts managed by Paulson (the "Paulson Clients") may from time to time beneficially own, and/or have an economic interest in, shares of the companies discussed in this letter and as a result, the Paulson Clients have an economic interest in the forward-looking statements, estimates and projections discussed above and their impact on the companies discussed in this letter. The Paulson Clients are in the business of trading – buying and selling – securities, and may trade in the securities of the companies discussed in this letter. You should also assume that the Paulson Clients may from time to time sell all or a portion of their holdings of one or more of the companies in open market transactions or otherwise (including via short sales), buy additional shares (in open market or privately negotiated transactions or otherwise), or trade in options, puts, calls, swaps or other derivative instruments relating to some or all of such shares, regardless of the views expressed in this letter.

The views contained in this letter and press release represent the opinions of Paulson as of the date hereof. Paulson reserves the right to change any of its opinions expressed herein at any time, but is under no obligation to update the data, information or opinions contained herein. Under no circumstances is this letter or press release intended to be, nor should it be construed as advice or a recommendation to enter into or conclude any transaction or buy or sell any security (whether on the terms shown herein or otherwise). This letter should not be construed as legal, tax, investment, financial or other advice. Additionally, this letter should not be construed as an offer to buy any investment in any fund or account managed by Paulson.

Cision

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