Callon plans to produce Entrada by 2009
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 of Mexico by 2009.
By OGJ editors
HOUSTON, Mar. 13 -- 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 of Mexico by 2009.
The planned $190 million purchase of BP Exploration & Production Co.'s 80% interest, to close within 45 days, is the largest transaction in Callon's history, said Fred Callon, chairman and chief executive officer (OGJ Online, Mar. 9, 2007).
Callon has been a partner in the field, a 2003 discovery in 4,690 ft of water on Garden Banks Block 782. The company has a good technical and operational understanding of the field, which has compelling economics, Callon said.
Callon, which at closing will own a 100% working interest and become operator, is well along in negotiations with ConocoPhillips, operator of the Magnolia tension leg platform on adjacent Block 783, to produce Entrada through the Magnolia facilities.
Callon's initial development plan is to drill and equip two wells as subsea tiebacks to Magnolia and make provision for similar linkups of future wells. Expected capability is 15,000 b/d/well of oil and 50 MMcfd/well of gas, subject to capacity on Magnolia. Callon expects to have some level of firm capacity at Magnolia and anticipates some rate limitation initially.
The first two wells should begin producing in 2009.
Callon is seeking a deepwater rig to drill the wells in 2008. Despite rig market tightness, a rig could become available from another operator whose plans changed or from a potential Entrada partner that has a rig under contract, Callon said.
Total additional development cost is $200 million, bringing Entrada's fully developed cost to $15.60/bbl, Callon said.
The company also intends to explore other potential it sees on the five blocks being acquired, he said.