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Callon Petroleum Company Provides Operations Update

Callon Petroleum Company (NYSE: CPE) today provided an update on its onshore drilling activity, increase in reserves and management changes.

OPERATIONAL HIGHLIGHTS

  • Proved reserves increased to 13.0 million net barrels of oil equivalent (MMBoe) at September 1, 2010, representing a 34% increase from December 31, 2009. Reserve additions were primarily driven by Callon’s successful development drilling activity in the Permian Basin and Haynesville Shale plays.
  • Production from the Wolfberry oil play in the Permian Basin is currently 500 net barrels of oil equivalent per day (Boe/d) up 43% since year end 2009. The company has added a second rig in the play and forecasts production to approach a 1,000 net Boe/d exit rate by year-end.
  • First production from the George R. Mills Well No. 1H in the Haynesville Shale commenced on September 3, 2010. The well is currently producing at a restricted rate of 10-12 million gross cubic feet of natural gas equivalent per day (MMcfe/d).
  • Gary Newberry has been promoted to Senior Vice President – Operations, as Steve Hinchman leaves to become Chief Executive Officer of another E&P company.

“We have made significant progress in growing onshore production and converting probable reserves into proved reserves, which is consistent with our strategic growth plan to reinvest cash flow generated from our offshore assets into onshore plays offering long-term growth potential with a balance between oil and natural gas production,” comments Fred Callon, Chairman and Chief Executive Officer. “Our development drilling program in the onshore Wolfberry oil play of the Permian Basin has resulted in a 43% increase in onshore oil production to date. With a drilling inventory of 125 remaining locations in the Wolfberry oil play, based on a 40-acre development plan, we have strong visible growth potential and we are actively pursuing complementary bolt-on acquisitions to build and solidify our position.” He notes further that “We successfully drilled and completed our first Haynesville shale well, which now holds our leasehold position in that play.”

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