American Oil and Gas Reporter - June 2014 - 127

SpecialReport: Hot Spots: Permian Basin
Permian Basin was the best fit for a small
operating company with a low to medium
risk profile."
So Callon began selling its Gulf assets
and investing in the Permian Basin. The
company sold its last Gulf property in the
fourth quarter of last year.
Its initial Permian Basin acquisition was
in Midland and Upton Counties, Tx.,
where the company began drilling more
than 100 vertical Wolfberry wells. But in
February 2012, it began a horizontal
Wolfcamp program, according to Callon.
In addition to its organic horizontal development program, the company focused on Upton, Midland and Reagan
counties for small acquisitions, eventually
increasing its initial acreage position by more
than 50 percent, he says. Callon Petroleum
added a second horizontal rig last August,
and has drilled 30 horizontal wells.
"We are focused on pad drilling, drilling
two to three wells per pad," Callon details.
"We are using our two rigs across four core
development areas: two fields in Reagan
County, one field in Upton County, and one
in Midland County. We have been focused
primarily on developing the Wolfcamp B.
In the Southern Midland Basin, the Wolfcamp is such a large interval that we are
drilling both an Upper and Lower Wolfcamp B zone. In addition, we have started drilling Wolfcamp A wells in Upton and
Reagan Counties, and have plans to drill
a Lower Spraberry well in Midland County later this year."
Currently, Callon Petroleum is focused on 13,500 total acres in the heart of
the Midland Basin. Callon says his company has identified 250 locations from just
the three Wolfcamp Shale zones that are
producing on its acreage. Throw in emerging targets such as the Jo-Mill and Spraberry zones, and he calculates Callon Petroleum has approximately 575 potential locations on its acreage.
"We plan to drill 27 wells this year as
part of our two horizontal rig program.
However, we are beginning to plan for the
addition of a third rig on our derisked
acreage," Callon outlines, adding, "We are
in development mode now and it is all
about execution, so we are focused on accelerating activity only after we have
firmly established infrastructure for repeatable growth. This is a very busy time in

the Permian. If you are not focused every
single day, you can lose a well, or worse,
get someone hurt."
He says Callon Petroleum is drilling to
vertical depths of up to 10,000 feet, depending on location, and then laterals with
average lengths of more than 7,000 feet.
He also notes the company continues to optimize its completion designs and has
found more success by pumping as much

as 280,000-290,000 pounds of sand per
completion stage.
"We are focused on executing, managing costs, and maximizing EURs," Callon
summarizes. "When we began, our horizontal wells had average EURs of 400,000450,000 barrels of oil equivalent. We now
have EURs of 575,000 boe with 7,500-foot
laterals, and almost 700,000 boe with
9,000-foot laterals. We are pleased with

JUNE 2014 127

American Oil and Gas Reporter - June 2014

Table of Contents for the Digital Edition of American Oil and Gas Reporter - June 2014