Good day, and thank you for standing by. Welcome to the APA Corporation's acquisition of Callon Petroleum conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Gary Clark, Vice President of Investor Relations. Please go ahead. Good day, and thank you for standing by. Welcome to- Good morning, and thank you for joining us for a special APA Corporation investor call to discuss the details of the transaction we announced earlier this morning. I am pleased to be joined by APA's CEO and President, John Christmann, as well as Callon's CEO and President, Joe Gatto. In a moment, I will turn the call over to John and then Joe to share their thoughts on this morning's announcement, following which we will move to Q&A. In conjunction with the press release issued earlier this morning, we posted a slide deck with additional details of the transaction. This can be found on our investor relations website at investor.apacorp.com. Please note that on this call, we may discuss certain non-GAAP financial measures. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures can be found in the supplemental information provided on our website. I'd like to remind everyone that today's discussion may contain forward-looking estimates and assumptions based on our current views and reasonable expectations. However, a number of factors may cause actual results to differ materially from what we discuss today. A full disclaimer is located with the investor deck on our website. Finally, given the time constraint and special purpose of this call, we ask that you limit your questions specifically to this transaction. With that, I'll turn the call over to John. Good morning, and thank you for joining us. I am pleased to announce that APA Corporation has entered into a definitive agreement to acquire Callon Petroleum Company, an independent exploration and production company focused exclusively in the Permian Basin. This is a strategic transaction for APA that aligns with our broader efforts to build and grow a differentiated portfolio of high-quality assets. APA's strategy is to deliver low, single-digit growth on an organic basis while generating strong shareholder returns. We opportunistically use inorganic activities to build scale in core areas. The acquisition of Callon is a stock-for-stock deal, and while absolute share values may be depressed across the entire industry, this is a great transaction on a relative value basis for both APA and Callon shareholders. The deal is accretive on all key metrics and is relatively neutral on a leverage basis. APA has a rigorous process for evaluating potential transactions, and Callon fulfills our key criteria. Specifically, today's transaction will increase APA's scale and deepen its opportunity set in the Permian. The combination of Callon's Delaware-focused footprint with APA's Midland-focused footprint results in a very balanced exposure between two of the world's most important oil-producing basins. Callon's position of 145,000 net Delaware and Midland Basin acres adds high quality, short cycle, oil-weighted development inventory and will increase APA's combined acreage position in these two basins by more than 50%. Further, the transaction is accretive to key financial metrics and will unlock value for both APA and Callon shareholders as we realize synergies and accelerate our ability to return cash to shareholders under our existing capital return framework. With the addition of Callon to the APA portfolio, our pro forma production will be more than 500,000 barrels of oil equivalent per day and pro forma enterprise value in excess of $21 billion. This deal, and its attractiveness to shareholders of both companies, is a testament to Callon's strategy, people, and hard work. Over the last few years, they have built a strong position in one of the world's most important hydrocarbon basins. With that, I would like to turn it over to Joe for his thoughts. Thank you, John. We couldn't be more excited about this transaction, which we believe represents the best path forward for Callon, unlocking significant value for our shareholders and enhancing our ability to succeed across industry cycles. Like Apache, Callon has a long history in the oil and gas business, dating back to the 1950s. We know Apache will be a good steward for the Callon name and the assets that we have built over the last 70-plus years. Over the past several years, we focused on strategically building a leading Permian position across the Delaware and Midland Basins, integrating high-quality assets into our business and extending our runway of high return, long lateral development locations. This position has largely benefited from our life-of-field co-development model, which we believe is a true differentiator from our peers. As we evolved the approach over the last few years, it has allowed our well productivity to trend counter to industry…. In tandem with scaling our position in the Permian, we've prioritized free cash flow, driving down our cost structure, reducing absolute debt, and returning capital to shareholders. Over recent quarters, Callon has materially strengthened its balance sheet and implemented a meaningful cash return program for our shareholder base. Ultimately, in the rapidly consolidating energy industry with competitors of increasing size, we believe this combination with Apache is the natural next step in the evolution of Callon, immediately unlocking significant opportunities for our company that otherwise would not have been possible in the near term. Apache's pro forma footprint in the Permian will create opportunities to capture meaningful operating synergies. The value of the Callon asset base will be enhanced with Apache by their proven Permian expertise and flexibility for increased capital allocation and ongoing delineation and optimization efforts. For our shareholders, they will benefit from an improved cost of capital and an enhanced shareholder return program. Further, they'll now have not only exposure to a high-quality Permian operation, but also exposure to world-class conventional assets and exploration upside. Apache has the leadership, diversity of assets, Permian scope and scale, and financial resources to deliver differentiated value to our shareholders from this transaction. Before I turn the call back to the operator, I'd be remiss to not highlight the dedication of the talented Callon employee base. Our success to date, and this combination, is a testament to their hard work that has allowed us to build such a strong market position, all while doing this in a safe and efficient manner. With that, I'll turn the call over to the operator for Q&A. Before we do that, thank you, Joe. We are looking forward to working with you and your teams in the coming weeks as we move towards close. To recap, I'm very excited about today's announcement. Callon's impressive Permian position will be a great add to the overall APA portfolio. We look forward to assimilating the assets after closing and getting to work to drive value for both APA and Callon shareholders. At this time, I will turn the call back over to the operator for questions. Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone. To withdraw your question, please press star one one again. Please wait for your name to be announced. We ask that you limit yourself to one question and one follow-up. One moment for our first question. Our first question comes from the line of Neal Dingmann with Truist Securities. Your line is now open. Morning, thanks for the time. Congrats on the Good morning, Neal. My question is... Hey, my question, John, you know, you've been running just, I guess, you know, my simple question is kind of is, in your opinion, will one plus one equal three on this? You know, Callon's been running about five rigs. You know, you've been running around 7 rigs. I'm just wondering, post, is it too early to tell, post this deal, how many rigs you think you might be running? Yeah, at this point, Neal, you know, the good news is that their program competes for capital, and so, you know, we envision continuing those right now. We'll continue ours, they'll continue theirs. Obviously, we get past close, we'll look at that, but we like what they're doing, and we like the opportunity set that it brings to the combined company. One last one, if I could, John. Was this a marketed deal, or how did this deal come to be? Won't get into those details. Those will all come out, you know, later. Thank you. You bet. Thank you. One moment for our next question, please. Our next question comes from the line of Doug Leggate with Bank of America. Your line is now open. I can be Neal. Good morning, everyone. Good morning, Doug. Greetings from Scotland, John. I am finishing off- Yes. my New Year's vacation here, so Happy New Year, everybody. Well, Happy New Year! John, I got two questions. First of all, two related questions, I guess. Inventory depth that you see in the combined portfolio, if you could give us some idea. I know you haven't defined activity levels, but how do you see the running room or the inventory depth in the combined portfolio? And my related question is, let's assume, I'm just gonna throw a number out there, that you thought it was 10 years. How do we think about synergies? You seem to have come up with a number of $150 million. I'm assuming there's some risking to that. What I'm really trying to figure out is, if I put a 10-year number on that on an after-tax basis, you could make a case that it's a third of the value or the equity value of the deal is just synergies. So I'm trying to reconcile those two things, inventory depth and the value of the synergies. Well, Doug, first of all, you know, thanks for the question. And you know, we don't typically talk about location counts and, you know, when we talk about our inventory. But I think the important thing here is we're adding scale in two ways, both, you know, in the inventory and with the activity. And, you know, the important thing, too, is we'll be maintaining the inventory duration that we see on our existing. So it is additive. We see a lot of future potential, and, I think what you're getting at in terms of when you look at the synergies and you look at the overall transaction, I think you're getting at the relative value we see. So, we do see great value in this transaction. But would it be wrong to talk about a decade of running room? I think that's what, what Steve has typically referred to when we asked that question about the overall Apache portfolio. Yeah, we've always said, you know, comfortably to the end of this decade, with the types of the wells we're drilling, we see similar duration in the Callon assets. Great stuff. Thanks again, guys, and congrats on getting a deal done in this market. Thank you. Thank you. One moment for our next question, please.... Our next question comes from the line of Charles Meade with Johnson Rice. Your line is now open. Good morning, John. Good morning, Charles. I want to follow up on— Oh, yeah, I thank you. I'd like to follow up on Doug's question about inventory, but go in a slightly different direction. Can you give us a sense of how many, you know, how many undeveloped locations you think you're acquiring in the Delaware here, and how they slot in with your existing, or, you know, how they slot in versus your existing Delaware inventory? Oh, I would just say, Charles, we, we take a conservative view on inventory as always. And, you know, when we look at this, we think there's similar duration at the pace they're at to what we currently have. I'll also say there's, there's a lot of potential in both their asset base and our asset base, you know, for future location adds, as we typically do every year. So we see a lot of potential there. Got it. And then a follow-up: Can you give us some color on how... You know, one of the challenges with, or not a challenge, it's a good thing with Apache right now, but you guys have a big asset in Suriname that's not producing near-term cash flows, but there's no question it's worth a lot of money. How did you and the board weigh that, on, you know, when you're considering trading your shares, which have, you know, using your shares, which have all this upside, that's not contributing in the next, you know, call it 24, 25, to acquire, you know, these near-term, short-cycle Permian assets? Yeah, I mean, I think you just gotta step back and look at, you know, the true valuation of the, of the companies. And, we see really, really good relative value here. We know we've got long-term value as well, but, you know, we see very attractive relative value in the Callon shares. Got it. Thank you. You bet. Thank you. One moment for our next question, please. Our next question comes from the line of Bob Brackett with Bernstein Research. Your line is now open. Good morning, all. I had a question that I think I know the answer to in terms of, is this deal additive or is it substitutive? i.e., was part of the strategic goal to have less international barrels as a percent? Yeah. Bob, when we look at this clearly, you know, if you step back, we, you know, we've always said a good solid E&P, you know, should grow at low single digit rates, organically. And we, we look to use, you know, inorganic activity from time to time to, to build scale in key core areas. I think this is an opportunity to add an asset base that, you know, attracts the capital within a, within a, you know, the APA portfolio. It builds scale in our, in our Permian. It really builds out the Delaware, which, you know, we've got strong presence in the Midland Basin. It's gonna let us leverage our technology, and it's value accretive on all metrics. So, no design there in terms of mix. We're, you know, we believe in a diversified portfolio, but you don't have many opportunities to add something of this quality in a core area like this, and so it's very attractive. Yep, very clear. Thanks. Mm-hmm. Thank you. One moment for our next question, please. Our next question comes from the line of David Deckelbaum with TD Cowen. Your line is now open. Congrats, John and Joe. Thanks for taking the questions this morning. You bet. I was just curious. It sounds like obviously leverage neutral here, accretive to free cash per share. Curious that, you know, you guys talked about using term loans to assume some of Callon's debt. Is there an intention to run a sales process on any non-core assets to try to pay down this debt faster? You know, I'd say we always look, you know, for opportunities to accelerate value. You know, should we sell any assets, those proceeds would obviously probably go to debt reduction, but, you know, nothing defined at this point or set out and... I appreciate that. And then just a follow-up and maybe a little bit more on Bob's question. You know, it sounds like this deal was really just a one-off opportunity to be accretive across the board, not necessarily an intention to enhance the scale in the Delaware or the Permian longer term through a variety of other deals or other methods, I guess, relative to the rest of your portfolio. All the criteria, I mean, you know, you always look for areas where we have scale to add more scale. I think we see a lot of potential in the synergies, and we do like adding, you know, adding inventory in the Permian, specifically the Delaware. So it's, you know, it just kind of fit all the criteria and checks all the boxes. And when you look at that and you look at the relative valuation, you know, I think it's gonna be very beneficial for both sets of shareholders. Absolutely. Congrats again. Thanks. You bet. Thank you. One moment for our next question, please. Our next question comes from the line of Arun Jayaram with JP Morgan. Your line is now open. Yeah, good morning, John. I want to talk a little bit about the Delaware. We did some analysis, and it shows that APA's well productivity has trended quite a bit better than CPE over the last couple of years. I was wondering if you think that reflects overall acreage quality, or do you see opportunities for self-help on the CPE properties to move them towards the productivity we see in APA's overall program in the Delaware? Arun, it's a great question. I would say, you know, number one, Callon's been making great progress, but, when we look at the acreage, we see good, really, really good quality rock. And, you know, we think we can bring something to the table there. I think they've been on a good path, and I think we, you know, we will see really good results with, you know, with this inventory. Understood. And maybe one for Steve. Any thoughts, Steve, on pro forma free cash flow if we assumed a pro forma for 2024, assuming synergy capture? Yeah, Arun, I think, let's leave that for a future conversation. We'll talk about APA's 2024 outlook in February, and I think that, as John alluded to earlier, we'll talk a little bit more about this as we get to closing. Fair enough. Thanks a lot, gentlemen. Great. Thanks a lot, Steve. Thanks, Arun. Thank you. One moment for our next question, please. Our next question comes from the line of Kevin MacCurdy with Pickering Energy Partners. Your line is now open. Hey, good morning. I wanted to ask a little bit about the synergies. The presentation mentions $55 million of operational synergies. I wonder if you can expand on the plan for that and what the split is between OpEx and well costs. Yeah, we'll, we'll get into more details, you know, at post-close on some of that. We'll come back with some timelines. But, you know, I think just scale in general with the fit of the, you know, our footprint and their footprint, there will be a lot we can do. And, and we put those, you know, in the synergies in three buckets. One's overhead and, you know, which is driven by larger company and scale. Two's cost of capital, and then three is gonna be on the operational side. But there's, there's a lot of stuff we see there, as we'll be able to integrate the assets. Great. And, any planned asset sales that could result from this deal? At this point, nothing planned or factored in, but, you know, as I said a few minutes ago, we're always open to accelerating value or creating value. Thank you. Thank you. One moment for our next question, please. Next question comes from Leo Mariani with Roth MKM. Your line is now open. Hi, just wanted to kind of ask quickly about the CPE asset base. Looks like the production's around 101-102 thousand barrels a day. How do you see that production trending with kind of the 5 rigs there? Is 5 rigs enough to kind of keep that asset base flat? You guys have sort of said that you want to grow the overall APA, you know, low single digits. Do you see growth on the CPE side, or is that gonna kind of more flattish? Just any help you could give on the trajectory of that production. No, Leo, we see good quality inventory, you know, good, you know, quality uplifts. I mean, I think you can see what we've been doing with, you know, 6-7 rigs on our Permian portfolio. It's, you know, we kind of see continued trajectory, as we look across this. So obviously, post-close, you'll integrate everything and come back with a plan. But, we, you know, they're very attractive, you know, lots of locations and, and good duration, so we see lots of benefit. Okay. And then, just a question here on the synergies. You guys have obviously detailed these in a handful of buckets. Just trying to get a sense, I mean, do you see some of these synergies happening in the second half of 2024, perhaps on the G&A side, you know, or on kind of the operational LOE workover side? And then it made it sound like in the slide deck that the debt replacement might take a little bit longer. Just trying to get any high-level thoughts on sort of some of the timeline for synergy realization. Yeah, I mean, it takes time, right? Some of them, you know, start happening pretty quickly after close, and then some of them take, you know, several quarters to kind of work in as you integrate. So, but we'll, we'll map out a timeline, you know, post-close on those things, and make sure we hit those, you know, those marks. Thank you. Leo, to be clear, the debt replacement should occur at or certainly shortly after closing. Yeah. Okay, that's helpful. Thank you. Thank you. At this time, I'd like to hand the conference back over to Mr. Christmann for closing remarks Well, thank you. As I said, we're very excited about this transaction. I want to give a lot of credit to Joe and the Callon employees for really putting together a great portfolio, and we look forward to getting closed and then integrating these assets and driving value for both the APA and Callon shareholders. So thank you very much for dialing in and listening in this morning. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.