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Iran’s deputy foreign minister, Mahdi Safari, said on 3 January that Tehran is interested in forming a unified currency with member states of the BRICS group of emerging economies.

“We are interested in creating a unified currency in the BRICS group, and this could be very effective,” Mahdi Safari said in an interview with Sputnik.

“By using national currencies, the process of eliminating the use of the dollar in commercial exchanges begins, and we are interested in continuing this process,” Safari added.

The minister added that Tehran hopes to serve as a banking center for BRICS nations. He also praised the role of the New Development Bank established by BRICS nations in 2014 to support joint projects and international cooperation.

Safari highlighted the positive role BRICS can play in terms of energy.

“The most important problem is represented by three issues: the first is energy production, the second is energy transfer, and the third is energy consumption. I can say that these three issues are being solved by BRICS.”

The annual BRICS summit was held in August last year. During the summit, Iran was one of six countries officially invited to join the group of nations, alongside Argentina, Egypt, Ethiopia, Saudi Arabia, and the UAE.

During the summit, discussions were held regarding the establishment of a joint currency. These plans have been underway for some time, and have now accelerated with the aim of countering the hegemony of the US dollar.

BRICS countries have recently stepped up trade in local currencies in order to strengthen their economies and counter the greenback.

Safari’s comments come just two days after the chairmanship of BRICS was officially handed over from South Africa to Russia.

Over recent months, both Russia and China have sought to expand the BRICS group, in an attempt to forge closer ties with South America and West Asia.

BRICS member states comprise 40 percent of the global population and nearly a third of the world’s economy. Last year, BRICS outpaced the gross domestic product (GDP) of the US-led G7 in terms of purchasing power parity.

During the BRICS summit on 24 August 2023, Iranian President Ebrahim Raisi described the 11-member BRICS as a symbol of change. He then underscored what he called were the historic advantages that Iran’s inclusion in the economic bloc would bring, noting that it marks “a new step towards establishing justice, ethics, and sustainable peace in the world.”

Source: New.thecradle.co

Source: Investor.apacorp.com

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Washington is discussing scenarios that could potentially draw it into a war in the Middle East, officials told the outlet

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Spot charter rates for the global liquefied natural gas (LNG) carrier fleet continued to decline this week, while European prices also decreased compared to the previous week.

Last week, spot LNG freight rates continued their downward trend.

LNG freight rates continued to decline despite delays at the Panama Canal, and constraints at the Suez Canal due to attacks in the Red Sea, prompting some owners to divert their LNG carriers towards the Cape of Good Hope.

“LNG freight rates have fallen for the fifth consecutive week, with a 7 percent week-on-week decrease for Atlantic rates and a 16 percent w-o-w decrease for Pacific rates,” Qasim Afghan, Spark’s commercial analyst told LNG Prime on Friday.

Image: Spark

Afghan said that the Spark30S Atlantic decreased by $7,750 to $108,500 per day, whilst the Spark25S Pacific decreased by $15,250 to $80,250 per day.

According to Afghan, Spark30S and Spark25S rates now assess rates for larger, more efficient 174,000-cbm 2 stroke vessels after a specification change to evolve in line with the evolution of the global fleet.

In Europe, the SparkNWE DES LNG front month also dropped from the last week.

The NWE DES LNG for February delivery was assessed last week at $9.925/MMBtu and at a $0.850/MMBtu discount to the TTF.

“The SparkNWE DES LNG price for February delivery is assessed at $9.872/MMBtu and at a $0.855/MMBtu discount to the TTF,” Afghan said on Friday.

He said this is a $0.185/MMBtu decrease in DES LNG price, and the discount to the TTF widened by $0.035/MMBtu, when compared to last week’s February prices.

Image: Spark

Levels of gas in storages in Europe remain high due to a mild winter. Currently, some parts of Europe such as the Nordic countries are experiencing a cold snap.

Data by Gas Infrastructure Europe (GIE) shows that gas storages in the EU were 85.86 percent full on January 3.

In Asia, South Korea and Japan’s demand for spot LNG cargoes remained tepid in December as comfortable inventories weighed on buying interest, according to Platts, part of S&P Global Commodity Insights.

Despite stable consumption of LNG in China, buying interest emerged in the week ended December 22 as China’s second-tier companies came out of the sidelines to purchase spot cargo as the Platts JKM, the benchmark price for LNG delivered to Northeast Asia, became more competitive than the domestic gas prices in China, it said.

JKM ranged between $11-$15/MMBtu price levels in December, compared to the higher price range recorded in November at $15-$17/MMBtu.

This week, JKM dropped when compared to the last week.

JKM for February settled at $11.555/MMBtu on Thursday.

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India’s largest gas utility GAIL has signed a long-term deal to buy liquefied natural gas (LNG) from energy trader Vitol.

Under the deal, Vitol Asia will deliver 1 million metric tons of LNG to GAIL for a period of about 10 years starting in 2026, according to a statement by GAIL.

GAIL said that Vitol would deliver the LNG supplies from its global portfolio on a pan-India basis.

The state-owned firm said this deal “will contribute to bridging India’s demand and supply gap of natural gas.”

GAIL signed this deal as “demand for natural gas in India is getting consolidated and this LNG tie up is part of the multiple negotiations which GAIL has been carrying on with various LNG suppliers for long-term deals,” it said.

The company owns and operates a network of over 16,000 km of natural gas pipelines in India.

GAIL holds a stake in India’s largest LNG importer, Petronet LNG, and buys volumes under long-term LNG deals, including from Qatar and the US.

It also charters LNG carriers and operates the 5 mtpa Dabhol LNG terminal in India.

On the other hand, Vitol has a global LNG portfolio with long-term LNG supply from North America, Africa, Middle East, and Asia, and charters a fleet of LNG carriers.

In 2022, Vitol physically delivered about 14 mtpa of LNG, according to the statement.

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The embargo will come into force in 2025, Finnish Climate Minister Kai Mykkanen says

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After a renovation project next year, the primates at St. Paul’s Como Park Zoo will reside in one of the first net-zero city-owned buildings.

Retrofitting several buildings at the zoo and the adjacent St. Paul Conservatory is part of a decarbonization initiative by the city to reach carbon neutrality for civic buildings by 2030.

That goal is one of many in St. Paul’s 2019 climate action and resilience plan, which outlines strategies and goals for carbon reduction in private and city-owned buildings and transportation, combined with the promotion of green infrastructure, water conservation and improved waste management.

St. Paul owns more than 150 buildings containing over 2.3 million square feet of space. The building portfolio includes police stations, community and recreation centers, libraries, public works and operations facilities. 

Buildings represent around 40% of carbon emissions nationally. Many cities, like St. Paul, have had programs for years dedicated to improving energy efficiency and adding solar to their buildings. As cities have begun to encourage, require and incentivize private building owners to become more efficient, civic leaders believe they need to serve as an example. St. Paul’s climate action plan suggests the city “inspire through municipal leadership.” 

According to Abby Finis, a consultant who has written several climate action plans for Minnesota cities, cities have great opportunities to reduce greenhouse gases from their buildings. 

“I think from an operations standpoint, cities are now in control of their facilities and their fleets, and there’s low-hanging fruit in both, but that’s not to say either is easy,” said Finis, who consults with St. Paul as well as Fresh Energy, publisher of the Energy News Network. “Building benchmarking, efficiency measures and decarbonization plans are good strategies.”

Should St. Paul decarbonize all city-owned buildings, it will have achieved perhaps the easiest part of its climate action plan, with city properties representing just 2% of emissions. By 2050, the plan calls for decarbonizing all buildings.

St. Paul’s climate action plan provides a game plan of sorts for the city’s built infrastructure, with 11 recommendations guiding everything from cost analysis to building materials. In many ways, the city is simply building on its legacy of sustainability. 

St. Paul energy coordinator Cecilia Govrik said from 2009 to 2018, the city’s Green Revolving Loan Fund saw 629 projects completed, saving the city $1.6 million in energy costs. 

Employing efficiency measures in existing and new buildings has been St. Paul’s chief strategy for carbon reduction, but that will not get the city to net zero. St. Paul chief resilience officer Russ Stark said new and under-consctruction city buildings focus on combining efficiency with heating electrification to move the city away from natural gas.

An 25,000-square-foot community center under construction in the North End features ground-source heating and cooling combined with rooftop solar. A new fire station features an electric truck, Stark said. Lighting projects at recreation centers and the central library, along with a new HVAC at the police department’s headquarters, will also drive down emissions. 

A rendering of the North End community center Credit: Courtesy / City of St, Paul

Stark suggested efficiency projects may continue, but will likely focus on LEDs and building automation rather than insulation because of the cost. Meanwhile, a decarbonization strategy could involve installing geothermal heating and cooling in larger buildings and air source heat pumps in smaller ones.

Heat pump technology could be one approach to heating electrification. However, Stark wonders whether city buildings will still need backup heating sources for subzero temperature days, a requirement adding equipment and cost. 

Next year, St. Paul will take another step toward electrification by spending $4.4 million on installing a geothermal system in the zoo’s Primates Building. He said the zoo and conservatory account for roughly 20% of the city’s energy consumption, making them obvious targets for efficiency investments.

“We’re certainly really focused on the Como campus right now because so much of our building portfolio energy use is out there,” Stark said. “It’s a campus, so theoretically, there’s a way to tackle a lot in one in one spot. There’s the opportunity to use less energy and electrify those buildings.”

Como Park Zoo and Conservatory Director Michelle Furrer said the campus has an inefficient central plant built in the 1940s that produces steam heat for hot water. A feasibility study found geothermal heating and cooling systems to be a good option, with an approach of installing them in one building at a time. After completing the primate center, Furrer and the city hope to raise nearly $8 million for installing geothermal in the visitors center and the main zoo building.

Retrofitting all the zoo and conservatory’s 19 buildings will take years. Other efficiency projects involving LEDs and building management systems will help with decarbonization efforts.

“We have a unique opportunity at Como Park Zoo and Conservatory to not only talk the talk but walk the walk in what we can do,” Furrer said. “We get almost two million visitors a year. We have a great opportunity not only to do the work but also to showcase it.”

Until last year, St. Paul had carbon emissions data for the entire city, but not specifically from city-owned buildings. Govrik, who started her job with the city in November 2022, spent part of her first year gathering building emission data to determine the city’s impact.

Since St. Paul passed the climate change plan, carbon emissions have declined significantly, from 21,257 metric tons of CO in 2019 to 15,800 metric tons in 2022, Govrik said. That’s a nearly 26% decrease. Emissions have been coming down for years, and she said the city should be on track to decarbonize all its buildings by 2030.

“This is really the first time we’ve had actual statistics to show how much progress we’ve made so far,” she said. “We can say we’re getting close to halfway to our goal, knowing that our end date for that carbon neutrality goal is 2030. We’re making good progress, but we still have a long way to go.”

An example of the St. Paul’s decarbonization work came in 2022, when the city decreased electricity use in  buildings by 519,000 kilowatt hours and by 3,100 therms of natural gas through efficiency and LEDs projects. A year later, St. Paul used Xcel Energy’s One-Stop Efficiency Shop, managed by the Center for Energy and Environment, to upgrade lighting at seven community and recreation centers, saving 254,000 kWh.

Although St. Paul has made great strides in reducing energy use in buildings through lighting retrofits, most of St. Paul’s carbon reduction can be attributed to Xcel Energy’s transition to clean energy. More than 60% of the utility’s electricity comes from carbon-free resources, primarily nuclear and wind energy.

Since 2015, the city’s efficiency measures have decreased electricity consumption by 47%, but only reduced natural gas consumption by 5%.

That’s in part because city-owned buildings have a wide range of ages, sizes and uses, making a one-size-fits-all approach unworkable. “There’s so much of this that has to be done at the building level because of the unique aspects of each building,” Govrik said.

Another issue is that the city hall and annex and the central police station receive heat and cooling from District Energy, which primarily serves downtown. District Energy burns waste wood for electricity in a process involving fossil fuels.

“We’ll need improvements from District Energy,” Govrik said.

Getting the city out of the habit of buying familiar replacements when HVAC systems break down will also require a cultural shift.

The city needs to break “the business as usual of just replacing equipment with the same equipment in a more efficient version,” Govrik said. ‘If we’re replacing gas boilers with more efficient gas boilers, we still have emissions from gas boilers going forward for 15 to 20 years.”

Finally, paying for electrification will not be cheap or easy. The Legislature passed 45 energy bills in 2023 that present funding opportunities for cities, as do the Inflation Reduction Act and other federal legislation. The IRA’s direct pay allows government agencies and nonprofits to receive a 30% to 40% project reimbursement, making clean energy investment for St. Paul more affordable.

“Figuring out the best funding source, grant opportunities and rebates and incentives for every project will be a challenge,” she said. 

Next year, the city plans to hire a consultant to write a decarbonization plan using a $317,000 federal grant. Govrik said the Municipal Buildings Decarbonization Plan will guide St. Paul’s clean energy initiatives for the next few years. 

Since “it isn’t realistic” yet to electrify every city-owned building, staff will identify electrification projects that have the greatest impact on the city’s emissions and can take the greatest advantage of federal funding, she said.

“That plan will identify the most cost-effective pathways for achieving further energy efficiency, electrifying municipal buildings, and integrating more renewable energy into the city’s portfolio,” Govrik said.

Fresh Energy staff, board members and funders do not have access to or oversight of the Energy News Network’s editorial process. More about our relationship with Fresh Energy can be found in our code of ethics.

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Yahoo Finance

(Reuters) -Oil prices fell 2% on Thursday, largely unwinding an earlier rally, as massive weekly gasoline and distillate stock builds overshadowed a larger-than-expected crude stock draw.

Brent crude fell by $1.57, or 2%, to $79.01 a barrel by 11:23 a.m. EDT, after earlier rising over $1. U.S. West Texas Intermediate crude futures fell $1.47, or 2%, to $73.57.

Low fuel demand and large inventory increases in data from the U.S. Energy Information Administration weighed on prices.

Gasoline stocks rose by 10.9 million barrels to 237 million barrels, their highest week-on-week rise in more than 30 years.

Distillate stocks rose last week by 10.1 million barrels to 125.9 million barrels. Distillate product supplied, a proxy for demand, fell to its lowest level since 1999, EIA data showed.

While crude inventories drew by 5.5 million barrels in the week, EIA data showed, much of that reflects shipping disruptions in the Red Sea, said Bob Yawger, director of energy futures at Mizuho.

“The situation in the Red Sea has forced a lot of refiners and buyers of crude oil to go to the United States rather than sail their boat around the Horn of Africa,” Yawger said.

Shipping concerns lingered after Yemen’s Iran-backed Houthis on Wednesday said they had “targeted” a container ship bound for Israel. U.S. Central Command said the militant group had fired two anti-ship ballistic missiles in the southern Red Sea the previous day.

Downbeat economic data sent prices lower earlier in the session. Euro zone business activity shrank in December. German inflation rose, possibly offering the European Central Bank an argument in favour of keeping interest rates steady for some time.

Both oil benchmarks gained about 3% on Wednesday to settle higher for the first time in five days. Oil also found support from American Petroleum Institute data showing crude stocks fell by 7.4 million barrels, double the expected drawdown.

On Wednesday two explosions killed nearly 100 people and wounded scores at a ceremony in Iran to commemorate commander Qassem Soleimani, who was killed by a U.S. drone in 2020. Iran has vowed revenge.

(Reporting by Laura Sanicola;Editing by Elaine Hardcastle)

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Complements and enhances APA’s asset base in the Permian Basin; expected to be accretive to key financial metrics;
Adds to APA’s high-quality, short-cycle development inventory and increases oil mix; and
Strengthens 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.*

HOUSTON, Jan. 04, 2024 (GLOBE NEWSWIRE) —  APA Corporation (“APA” or the “Company”) (NASDAQ: APA) and Callon Petroleum Company (“Callon”) (NYSE: CPE) have entered into a definitive agreement under which APA will acquire Callon in an all-stock transaction valued at approximately $4.5 billion, inclusive of Callon’s net debt. Under the terms of the transaction, each share of Callon common stock will be exchanged for a fixed ratio of 1.0425 shares of APA common stock. The transaction is expected to be accretive to all key financial metrics and add to APA’s inventory of high quality, short-cycle opportunities. Callon’s assets provide additional scale to APA’s operations across the Permian Basin, most notably in the Delaware Basin, where Callon has nearly 120,000 acres. On a pro forma basis, total company production exceeds 500,000 BOE per day and enterprise value increases to more than $21 billion.*

Key Highlights

Combination of Callon’s Delaware-focused footprint with APA’s Midland-focused footprint provides scale and balance in the Permian Basin;
APA’s oil-prone acreage in the Midland and Delaware Basin combined will increase by more than 50% following the transaction;
Expected to be accretive on key financial and value metrics;
Estimated overhead, operational and cost-of-capital synergies to exceed $150 million annually; and
Additional scale anticipated to improve credit profile; pro forma balance sheet will remain strong with leverage at 1.1x net debt / adjusted EBITDAX.**

Management Commentary

“This transaction is aligned with APA’s overall portfolio strategy and fits all the criteria of our disciplined approach to evaluating external growth opportunities. Callon has built a strong portfolio in the Permian Basin that is complementary to our existing Permian assets and rounds out our opportunity set in the Delaware,” said John J. Christmann IV, APA’s CEO and president. “The acquisition is accretive and unlocks value for both shareholder bases, as increased scale will enable us 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.”

“We are very proud of the significant steps we have taken to enhance Callon’s asset base, operational performance and balance sheet over the past several years,” said Joe Gatto, Callon’s president and CEO. “This combination with APA now provides for an enhanced value proposition for our shareholders built on their depth of experience and strong execution in the Permian Basin, flexibility for increased capital allocation, and ongoing delineation and optimization efforts. Importantly, I would like to personally thank each and every Callon employee for their role in building this company. I am very proud of this team and what we have achieved together.”

Combined Permian Asset Position and Preliminary 2024 Planned Activity

Pro forma average daily Permian Basin production was 311 Mboe/d in 3Q 2023, which represents a 48% increase from APA’s Permian Basin production on a standalone basis. APA’s oil production as a percentage of BOE’s in the Permian increases from approximately 37% to 43% in 3Q 2023, on a pro forma basis.

APA will provide additional activity plans and details post closing.

Transaction Details

In this all-stock transaction, each outstanding share of Callon common stock will be exchanged for 1.0425 shares of APA common stock, representing an implied value to each Callon share of $38.31 per share based on the closing price of APA common stock on Jan. 3, 2024. APA is expected to issue approximately 70 million shares of common stock in the transaction. After closing, existing APA shareholders are expected to own approximately 81% of the combined company and existing Callon shareholders are expected to own approximately 19% of the combined company. APA expects to retire the existing debt at Callon and replace it with APA term loan facilities totaling $2.0 billion. The term loan facilities are expected to offer improved optionality for near-term debt reduction. JPMorgan Chase Bank, N.A., Citigroup Global Markets Inc. and Wells Fargo Bank, National Association have jointly provided $2.0 billion of committed financing for the deal.

The transaction has been unanimously approved by the Boards of Directors of both APA and Callon and 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 shareholders of both APA and Callon. Upon the closing of the transaction, a representative from Callon will join the APA board. APA’s executive management team will lead the combined company with the headquarters remaining in Houston, Texas.

Pro Forma APA Positioning

“APA has a proven ability to deliver strong results from its unconventional assets in the Permian Basin, and we look forward to building on the progress that the team at Callon has made within its asset base. This transaction is aligned with our strategy of maintaining and growing a diversified portfolio, underpinned by large-scale core areas of operation while continuing to build a portfolio of medium and longer-term exploration-driven development opportunities,” Christmann said.

Following the closing, the company’s worldwide pro forma production mix will be approximately 64% U.S. / 36% international.

APA’s global portfolio includes ongoing development on large-scale legacy assets in the U.S. and Egypt. The company is also advancing a FEED process for a large-scale FPSO development offshore Suriname. In addition to current production and development activities across the globe, APA maintains a differentiated exploration portfolio, which includes newly acquired large-scale blocks offshore Uruguay and onshore state-land leases in Alaska.

Advisors

Citi and Wells Fargo Securities LLC are acting as financial advisors to APA, and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to APA. Morgan Stanley & Co. LLC is acting as lead advisor to Callon, and RBC Capital Markets, LLC is also acting as financial advisor to Callon. Kirkland & Ellis LLP is serving as legal advisor to Callon.

Conference Call

APA and Callon will host a joint conference call on Thursday Jan. 4, 2024, to discuss the transaction at 7:30 a.m. Central (8:30 a.m. Eastern). The conference call will be webcast from APA’s website at www.apacorp.com.

About APA

APA Corporation owns consolidated subsidiaries that explore for and produce oil and natural gas in the United States, Egypt and the United Kingdom and that explore for oil and natural gas offshore Suriname. APA posts announcements, operational updates, investor information and press releases on its website, www.apacorp.com. Additional details regarding Suriname, ESG performance and other investor-related topics are posted at investor.apacorp.com.

About Callon Petroleum

Callon Petroleum Company is an independent oil and natural gas company focused on the acquisition, exploration and sustainable development of high-quality assets in the Permian Basin in West Texas.

* Pro forma enterprise value is derived from the addition of each company’s market capitalization based on closing stock prices on 1/3/24, plus the net debt of each company as of 9/30/23.

** Net debt is as of 9/30/23, and adjusted EBITDAX is measured over the four quarters ended 9/30/23.

Forward-Looking Statements

This press release relates to a proposed business combination transaction between APA and Callon and contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to future events and anticipated results of operations, business strategies, the anticipated benefits of the proposed transaction, the anticipated impact of the proposed transaction on the combined company’s business and future financial and operating results, the expected amount and timing of synergies from the proposed transaction, the anticipated closing date for the proposed transaction, and other aspects of our operations or operating results. Words and phrases such as “anticipate,” “estimate,” “believe,” “budget,” “continue,” “could,” “intend,” “may,” “might,” “plan,” “potential,” “possibly,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “prospect,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” and other similar words can be used to identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. All such forward-looking statements are based upon current plans, estimates, expectations, and ambitions that are subject to risks, uncertainties, and assumptions, many of which are beyond the control of APA and Callon, that could cause actual results to differ materially from those expressed or forecast in such forward-looking statements.

The following important factors and uncertainties, among others, could cause actual results or events to differ materially from those described in these forward-looking statements: the risk that the approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 is not obtained or is obtained subject to conditions that are not anticipated by APA and Callon; uncertainties as to whether the potential transaction will be consummated on the expected time period or at all, or if consummated, will achieve its anticipated benefits and projected synergies within the expected time period or at all; APA’s ability to integrate Callon’s operations in a successful manner and in the expected time period; the occurrence of any event, change, or other circumstance that could give rise to the termination of the transaction, including receipt a competing acquisition proposal; risks that the anticipated tax treatment of the potential transaction is not obtained; unforeseen or unknown liabilities; customer, shareholder, regulatory, and other stakeholder approvals and support; unexpected future capital expenditures; potential litigation relating to the potential transaction that could be instituted against APA and Callon or their respective directors; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the effect of the announcement, pendency, or completion of the potential transaction on the parties’ business relationships and business generally; risks that the potential transaction disrupts current plans and operations of APA or Callon and their respective management teams and potential difficulties in Callon’s ability to retain employees as a result of the transaction; negative effects of this announcement and the pendency or completion of the proposed acquisition on the market price of APA’s or Callon’s common stock and/or operating results; rating agency actions and APA’s and Callon’s ability to access short- and long-term debt markets on a timely and affordable basis; various events that could disrupt operations, including severe weather, such as droughts, floods, avalanches, and earthquakes, and cybersecurity attacks, as well as security threats and governmental response to them, and technological changes; labor disputes; changes in labor costs and labor difficulties; the effects of industry, market, economic, political, or regulatory conditions outside of APA’s or Callon’s control; legislative, regulatory, and economic developments targeting public companies in the oil and gas industry; and the risks described in APA’s and Callon’s respective periodic and other filings with the U.S. Securities and Exchange Commission (“SEC”), including their most recent Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.

Forward-looking statements represent management’s current expectations and are inherently uncertain and are made only as of the date hereof. Except as required by law, neither APA nor Callon undertakes or assumes any obligation to update any forward-looking statements, whether as a result of new information or to reflect subsequent events or circumstances or otherwise.

Cautionary note to investors

The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SEC’s definitions for such terms. This press release may use certain terms, such as “resources,” “potential resources,” “resource potential,” “estimated net reserves,” “recoverable reserves,” and other similar terms that the SEC guidelines strictly prohibit oil and gas companies from including in filings with the SEC. Such terms do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality, and other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in APA’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and Callon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. A copy of APA’s Annual Report on Form 10-K is available free of charge on APA’s website at https://investor.apacorp.com. A copy of Callon’s Annual Report on Form 10-K is available free of charge on Callon’s website at https://callon.com/investors. You may also obtain these reports from the SEC by calling 1-800-SEC-0330 or from the SEC’s website at www.sec.gov.

Non-GAAP Financial Measures
This press release includes information not prepared in conformity with generally accepted accounting principles (GAAP). Net debt and adjusted EBITDAX are non-GAAP measures. The non-GAAP information should be considered by the reader in addition to, but not instead of, financial information prepared in accordance with GAAP. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures can be found in the companies’ quarterly results posted on APA’s website at https://investor.apacorp.com and on Callon’s website at https://callon.com/investors.

No Offer or Solicitation
This communication is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Additional Information about the Merger and Where to Find It
In connection with the proposed transaction, APA intends to file with the SEC a registration statement on Form S-4 that will include a joint proxy statement of APA and Callon and that also constitutes a prospectus of APA common stock. Each of APA and Callon may also file other relevant documents with the SEC regarding the proposed transaction. This document is not a substitute for the joint proxy statement/prospectus or registration statement or any other document that APA or Callon may file with the SEC. The definitive joint proxy statement/prospectus (if and when available) will be mailed to shareholders of APA and Callon. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, JOINT PROXY STATEMENT/PROSPECTUS, AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of the registration statement and joint proxy statement/prospectus (if and when available) and other documents containing important information about APA, Callon, and the proposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by APA will be available free of charge on APA’s website at https://investor.apacorp.com. Copies of the documents filed with the SEC by Callon will be available free of charge on Callon’s website at https://callon.com/investors.

Participants in the Solicitation
APA, Callon, and certain of their respective directors, executive officers, and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of APA, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in APA’s proxy statement for its 2023 Annual Meeting of Shareholders, which was filed with the SEC on April 11, 2023, and APA’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 23, 2023. Information about the directors and executive officers of Callon, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in Callon’s proxy statement for its 2023 Annual Meeting of Shareholders, which was filed with the SEC on March 13, 2023, and Callon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 23, 2023. Other information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the proposed transaction when such materials become available. Investors should read the joint proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from APA or Callon using the sources indicated above.

Source: Investor.apacorp.com

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It will take some time until the official figures are available, but last year the German economy likely shrank. Looking back, economists and industry associations have rarely been so unanimous in their views: 2023 was a year of stagnation.

The signs for 2024 don’t look encouraging either.

Or as Moritz Kraemer, the chief economist at Landesbank Baden-Württemberg, put it more pointedly in a recent TV interview about quarterly figures: “I don’t want to argue about whether it’s plus 0.2% or minus 0.2%. The fact is, we are stagnating.”

Kraemer compared the ongoing sluggish growth of the German economy to the waves of a corrugated sheet of metal. “We are moving in a kind of ‘corrugated economy.’ It goes up and down a little bit, but actually we are lying flat on the ground.”

How did Germany get here?

The reasons why Germany is suffering are well known. Consumers are holding back due to inflation and rising prices. Plus the sluggish global economy is putting a strain on exporters, which used to be a driving force of the economy.

In addition, due to unstable energy prices, numerous international corporations are putting their investment plans on hold. Or worse, they are building new production capacities abroad — in the United States or China, far away from the European Union.

Finally, the ambitious green transformation of Europe’s largest economy, driven by economy and climate minister, Robert Habeck, is costing a lot of money.

Germany’s climate and industrial projects are in jeopardy after a major court decision about the federal budget cut fundingImage: Sebastian Gollnow/dpa/picture alliance

A balanced budget and a big hole

Last year in mid-November, just when it seemed things couldn’t get worse, the Constitutional Court rejected the government’s reallocation of €60 billion ($65 billion) in COVID-19 loans for climate protection and the modernization of the economy.

The government’s plans relied heavily on using this money in the coming years, and the court’s decision created a giant hole in the budget.

You’d think that parliament could simply approve new loans — this time not for COVID measures, but for the energy transition and other purposes.

But Germany’s “debt brake” won’t allow this. The fiscal rule, added to the constitution in 2009, forces the government to keep its books balanced and strictly limits new borrowing. Approving additional debt of €60 billion had only been allowed by declaring the pandemic an emergency, which in turn made it possible to temporarily suspend the debt brake.

Less spending, less growth

The ruling threw the government’s budget calculations out of the window and caused major uncertainty among businesses and consumers. And it forced the government to look for savings options.

At the end of November, after rounds of hard negotiations, the government agreed on a supplementary budget for 2023 and suspended the debt brake for that year.

The budget for 2024 was slashed considerably. Some fear that the planned cost cutting, fewer subsidies and higher energy prices could slow the economy further, and even rekindle inflation.

As a result of the ruling, Habeck’s climate and industrial policy projects are in jeopardy, too. His ministry estimated that this could result in up to half a percentage point less economic growth.

According to ING chief economist Carsten Brzeski, the ruling has revealed two new risk factors for the German economy: fiscal austerity and political uncertainty.

“Things are going really bad for Germany right now,” said Thomas Gitzel, chief economist at VP Bank. The government must act urgently. “But the Constitutional Court’s ruling could force austerity measures on the government that could lead to an additional dampening of growth.”

Looking at the numbers from different sides

Even before the court ruling, the European Commission had seen Germany as bringing up the rear in terms of growth in the eurozone next year, with an expected increase of 0.8%.

The German government’s current economic forecast still assumes an increase in gross domestic product (GDP) of 1.3% for 2024.

But nearly all of the most respected economic researchers expect German GDP growth of well below 1% for 2024.

The Organization for Economic Cooperation and Development (OECD) predicts an increase of 0.6%. In contrast, the average growth of all the 38 OECD member countries is estimated at 1.4% according to numbers released on November 29.

Crisis in seemingly every direction

“The energy crisis hit Germany more than other countries because industry plays a more important role in this country and dependence on Russian gas was much higher than in other countries,” said OECD economist Isabell Koske, summarizing the reasons for the economic weakness.

High inflation reduced the purchasing power of households and thus affected consumption. “The government budget crisis is also unsettling companies and consumers,” she said.

It’s crucial to “solve the budget crisis as quickly as possible in order to give companies and households planning security and confidence in the future,” said Koske. A solution should include cuts in expenditure, increases in revenue and a reform of the debt brake.

No growth at all in the end?

The experts at Deutsche Bank are even more pessimistic. Stefan Schneider from DB Research thinks Germany’s economy will shrink in 2024.

Moritz Schularick, president of the Kiel Institute for the World Economy, summed up the stress factors for the German economy in a speech at a Bundesbank reception in Berlin in mid-October. Germany has made three big bets in the past decades that are currently causing problems for the country.

“A bet on Russian gas as a cheap energy source for industry. A bet on the Chinese economic miracle as a driver for German exports. And a bet on Pax Americana, on the outsourcing of national security to America,” he said. On all three points, the country has come to the end of the road.

Source: Dw.com

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