OilVoice - Callon Petroleum Announces Purchase of West Texas Properties

Callon Petroleum Announces Purchase of West Texas Properties

Sunday, September 13, 2009

Callon Petroleum Company has signed a purchase and sale agreement with Ambrose Energy I, Ltd., a subsidiary of ExL Petroleum, LP, to acquire their interests in 22 producing wells located in Crockett, Ector, Midland and Upton Counties, Texas, for $16.25 million.

The company estimates the total proved reserves being acquired to be approximately 1.5 million barrels of oil equivalent. The assets include 4 uphole recompletion targets, 11 proved undeveloped locations and 61 non-proven locations to fully develop the acreage. The properties are on approximately 15,908 gross acres (8,202 net acres), of which 2,087 net acres are held by production. The current production rate is approximately 475 barrels of oil equivalent per day, primarily from the Wolfberry interval.

Subject to examination of title and environmental issues, and termination of preferential purchase rights, Callon expects to close on or before October 31, 2009. Upon closing, Callon will operate substantially all of the production and development.

“This is a first step in rebalancing Callon’s assets between offshore and onshore properties,” Fred Callon, Chairman and CEO, points out. “The Permian Basin Wolfberry play provides our company with repeatable, oil-focused growth opportunities that can be further improved over time and forms a competitive foundation for Callon’s presence in the region.”

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