Callon Petroleum completes acquisition of assets in Delaware Basin, Texas

Callon Petroleum Company has completed its previously announced acquisition of oil and natural gas assets located in the southern Delaware Basin from American Resource Development.

In this latest acquisition, the company purchased nearly 16,700 net surface acres situated in Ward and Pecos Counties, Texas.

Callon Petroleum acquired a further 590 net acres from the initial announcement of acquiring 16,098 net acres.

The additional area lies within or is contiguous to the Ward County footprint.

Callon Petroleum paid $633m for this deal, which includes the incremental acreage and the purchase of the midstream assets of Ameredev Midstream Development.

Callon Petroleum Company chairman and CEO Fred Callon said: “Our initial entry into the Delaware Basin represents another important strategic step for Callon in the Permian Basin.

"The contiguous acreage position resides within a deep, over-pressured region and includes multiple, oil-weighted target intervals.

“We currently estimate more than 480 gross horizontal locations on the acquired Ward County acreage in just the Wolfcamp A and B zones that have been well-delineated in the area, with potential upside locations in the Wolfcamp C and various Bone Spring intervals, in addition to emerging development opportunities in Pecos County.

“This new development unit, our fourth core operating area in the Permian which we have named Spur, will be an important component of our growing portfolio of investment opportunities that we believe will drive attractive returns on total capital employed as our Permian drilling activity increases.

“We are preparing to add a dedicated horizontal drilling rig to the Spur operating area by mid-year 2017, which will be our fourth operated rig in the Permian, with the potential for incremental drilling activity in the Delaware Basin in 2018.”

The Corbets 34-149 2WA well has a 10,000ft drilled lateral targeting the Lower Wolfcamp A and is currently flowing back in Ward County.

Furthermore, a second 10,000ft drilled lateral targeting the Wolfcamp B will soon be completed in an offsetting drilling unit.

After the completion of this transaction, Callon Petroleum now holds more than 56,000 net surface acres in the Permian Basin.