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

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

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Available Webcasts



The Future of US Refining

When 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


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

When Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST



On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

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