Callon adds onshore, shale gas components

By OGJ editors
HOUSTON, Feb. 3
-- Callon Petroleum Co., Natchez, Miss., has added onshore and unconventional assets to its Gulf of Mexico properties and set a $61.7 million capital budget for 2010.

The budget is allocated 33% to Permian basin development drilling, 24% to Haynesville shale gas development, 9% to the gulf, and 13% for more leasehold acquisitions, and 21% is reserved for capitalized costs.

The revised strategy, 18 months in planning, is to reinvest cash flow from Habanero and Medusa deepwater gulf fields into onshore conventional oil and shale gas properties acquired in fourth-quarter 2009.

Callon plans to begin drilling this month and drill as many as 16 wells in 2010 and add more rigs in 2011 and 2012 in a Permian Basin Wolfberry low permeability oil play. It acquired a property with 1.6 million boe of net proved reserves and 350 boe/d of production. The operated property has 22 producing wells and 148 locations on 40 acres.

Estimated gross ultimate recovery is 80,000-100,000 bbl/well at $1.5 million/completed well. Spacing could be halved to 20 acres.

Callon will drill two horizontal wells starting in mid-2010 on a 577-acre Haynesville shale unit in Bossier Parish, La., on which it acquired a 70% operated interest for $3 million. Offset wells have flowed at initial rates of 20 MMcfd. As many as seven horizontal wells are possible. Estimated gross ultimate gas recovery is 6.4 bcf at $9 million/completed well.

Callon has 15% working interest in Murphy Oil Corp.-operated Medusa field, where eight wells averaged 2,000 boe/d net to Callon in 2009. Most wells are producing from their primary completion and have proved reserves behind pipe. Medusa has a proved reserve life of 7 years and is 89% oil.

Callon has an 11.25% working interest in Shell Offshore-operated Habanero field, where two wells averaged 1,000 boe/d net to Callon in 2009. Callon believes important proved reserves will be accessed by sidetracking updip from the existing wells.

Callon’s gulf shelf assets averaged 14 MMcfd of net gas equivalent production in 2009. The company is evaluating options for monetizing the shelf assets and may retain its shelf operations if no viable alternative exists.

The company’s gulf operations will generate the majority of Callon’s operating cash flow in 2010. With minimal offshore capital requirements, this cash flow will be used to fund the onshore transition.

Related Articles

W&T Offshore to buy Callon Petroleum assets for $100 million

10/17/2013 Houston-based independent W&T Offshore Inc. has agreed to purchase Callon Petroleum Operating Co.’s exploration and production assets in the Gu...

SEC charges Louisiana investor with illegally trading Callon stock

09/16/2009 The US Securities and Exchange Commission charged a Louisiana investor with unlawful trading of Callon Petroleum Co. stock before the independent p...

Black Elk appoints new executives

09/29/2008 Black Elk Energy, Houston, has appointed Terrell Clark executive vice-president and chief technology officer and Joe Matthews vice-president, land.

Callon lets contract for Entrada field development

06/22/2008 Callon Petroleum Co. has let a lump-sum installation contract to Technip, Paris, for development of Entrada oil field in the Gulf of Mexico.

Callon plans to produce Entrada by 2009

03/13/2007 Callon Petroleum Co., Natchez, Miss., plans to take a development partner and has set a goal of starting production from Entrada field in the Gulf ...

Callon to acquire BP's interest in Entrada field

03/09/2007 Callon Petroleum Co., Natchez, Miss., has agreed to pay $190 million for BP Exploration & Production Co.'s 80% interest in Entrada oil and gas fiel...

Anadarko chases Garden Banks subsalt Miocene

02/06/2007 Having drilled three noncommercial ultradeep wildcats in the eastern Garden Banks area of the Gulf of Mexico, Anadarko Petroleum Corp. said it will...

Callon Petroleum boosts capital budget 40%

01/23/2006 Callon Petroleum Co., Natchez, Miss., approved a 2006 capital expenditure budget of $125 million, a 40% increase from 2005.

Company News - Halliburton issues payment for alleged overbilling

02/02/2004 Halliburton Co. reported Jan. 23 the issuance of a $6.3 million payment to its customer, Army Materiel Command, to cover "the potential overbilling...
White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST



On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected