NATCHEZ — Callon Petroleum announced Monday it will acquire Houston energy company Carrizo Oil & Gas in an all-stock transaction valued at $3.2 billion.

Carrizo Oil & Gas is a Houston-based energy company focused on Texas shale oil and gas. The company is an industry leader in horizontal drilling in South Texas and West Texas.

The all-stock deal will leave Callon stockholders with a 54% stake and Carrizon investors with a 46% stake.

Carrizo shareholders will receive 2.05 Callon shares for each share of Carrizo common stock, valuing the stock at $13.12 per share.

The merger will allow the company to focus on the rapidly growing Delaware Basin and give Callon extensive holdings in the Permian Basin and Eagle Ford shale production areas, a news release from Callon said.

Callon will have an approximate 200,000 acre footprint in those locations, including 2,500 total gross horizontal drilling locations, a Callon news release said.

“As a larger company, Callon will be well-positioned to benefit from an expanded infrastructure footprint and critical mass for our production marketing and supply chain functions,” Callon President and CEO Joe Gatto said.

Callon Petroleum recently moved its headquarters from Natchez to Houston. More than three-dozen employees continue to operate from the company’s building on Canal Street.

The combined company will remain in Houston.

The deal is expected to close in the fourth quarter of 2019.