Callon Petroleum Company Announces Haynesville Shale Development, 2010 Capital Budget and Provides Strategy and Operational Update
February 3rd, 2010 - Posted in Energy CompaniesNATCHEZ, Miss.–(BUSINESS WIRE)–Callon Petroleum Company (NYSE: CPE - News) today announced details regarding its strategy shift to diversify its asset base to onshore in order to increase visible growth potential, including a 2010 capital budget of $61.7 million and its first acquisition in the North Louisiana Haynesville Shale play.
“We’ve been working on this strategy shift over the past 18 months, developing the plan, working to find the right assets and building the right team to set the foundation for our plan to diversify our asset base,” Fred Callon, Chairman and CEO points out. “The cash flow generated from our two deepwater fields with quality, long-lived reserves will be reinvested into onshore conventional oil and shale gas properties.” He adds that the company made two transformational acquisitions in the fourth quarter of 2009 extending its operations onshore into the Wolfberry oil play in the Permian Basin and the Haynesville Shale natural gas play. As a result, the company now has a multi-year drilling inventory of opportunities for growing reserves and production.
“Even though it is early in 2010, we have already made significant progress towards improving our liquidity position, securing the financial resources needed to fund our growth plan and to create visible growth potential for our shareholders,” he concludes.
Onshore – Shale Gas
Callon has acquired a 70% operating interest in a 577-acre Haynesville Shale Unit in Bossier Parish, Louisiana, at a cost of $3 million. The Unit is in the core of the play offset by wells having demonstrated initial production rates of approximately 20 million cubic feet of natural gas per day (MMcf/d). In 2010 Callon plans to drill and complete two horizontal wells. The first well is planned to spud by mid-year. The Unit will be developed with up to seven horizontal wells. The company estimates the gross ultimate gas recovery to be 6.4 billion cubic feet of natural gas per well at an estimated cost of $9.0 million to drill and complete. (more)
