Callon Petroleum Company
We are an independent oil and natural gas company focused on growing reserves and production through efficient operations and low finding and development costs. We have been operating successfully since 1950, both offshore and onshore in several oil and natural gas basins.
In 2009 we initiated a focused strategy to reinvest the significant cash flow generated by our offshore producing properties into lower risk, longer life onshore oil and natural gas fields. In response to this shift in strategy we have added new team members with extensive experience in our new areas of operations to lead our technical and operational efforts. We have initiated the first steps in this strategy with acquisitions in the Permian Basin of West Texas and the Haynesville Shale of northern Louisiana. These acquisitions have added acreage for the drilling of over 300 wells in the Permian Basin Wolfberry Trend and seven wells in the Haynesville Shale. We view these acquisitions as initial entry positions into two of the most attractive oil and gas plays in the onshore U.S.
We replaced 127% of our production in 2009 and our current proved, probable and possible un-risked reserves are estimated to be 27.8 million barrels of oil equivalent. Over 70% of our anticipated revenue for 2010 will be from oil and natural gas liquids.
Highlights from the first nine months of 2010 include:
•Drilled and placed on production nine wells in the Permian Basin, increasing our net production in the play by 43% to 500 barrels of oil equivalent per day (Boe/d) and our proved reserves by 2.1 million of barrels of oil equivalent (MMboe). As of September 30, 2010, we were drilling two wells and had two wells awaiting fracture stimulation. With two rigs running in the Permian Basin, the company expects to drill a total of 23 wells in 2010, increasing net production of oil to approximately 750 Boe/d by year-end.
•Completed and placed on production our first operated Haynesville Shale well, which began producing at a restricted flow rate of 10.5 million cubic feet of natural gas equivalent per day (MMcfe/d). This is the first of seven planned Haynesville wells. Through September 30, 2010, a total of 2.3 MMboe have been converted from probable reserves to proved status.
•Total proved reserves based on internal engineering estimates have increased to 13 MMboe as of September 30, 2010, a 34% increase year-to-date.
•The borrowing base on the company's credit facility was increased 50% to $30 million based on the growth of the company's proved reserves.
"With the third quarter, we delivered another period of positive execution of our strategic growth plan that we implemented a little more than a year ago," Fred Callon, Chairman and CEO, points out. "This time last year, we had no onshore oil production. Today we are reporting onshore oil production of 500 net barrels per day, and we have our Haynesville Shale acreage held by production. Our diversification strategy for reinvesting cash flow generated from our offshore deepwater fields into lower-risk onshore oil and shale gas plays has enabled us to increase our long-term visible growth prospects, strengthen our balance sheet and continue growing per-share value."
Shares of Callon Petroleum Company common stock are traded on the New York Stock Exchange under the symbol “CPE.” The Company's objective is to enhance stockholder value through sustained growth in its reserve base, production levels and resulting cash flows from operations.
Callon Home Page: http://www.callon.com/index.html
Operations overview with interactive map like the one pictured below: http://www.callon.com/ops_overview.html