Callon Petroleum is an independent land-based operator in oil and gas exploration and production industry. The company started repositioning its onshore strategies in 2009 and completed in 2013, shifting its operations from the offshore waters in the Gulf of Mexico to the onshore, Permian Basin region in West Texas. After fully divesting from the Medusa field in the Gulf of Mexico, Callon has turned into a pure-play concentrating 100% of its business at Midland Basin, a sub-basin located within Permian Basin.
Why Permian Basin? The Permian Basin has supported production since the 1940s. It has long been the most important oil and gas producing area in the United States. The producers operating in the Basin benefits from rich oil and gas reserve loaded in the world’s thickest deposits of rocks, well-established infrastructure from historical operations and relatively stable regulatory environment that has been established over the time.
The business strategy of Callon is to establish resource base and acreage position in the core of Permian Basin. Callon expends its asset base through self-development and acquisition of acreage. As of March 2016, Callon holds roughly 17,675 net surface acres in the Southern and Central Midland Basin that are prospective for multiple oil-bearing intervals. Specifically, the company’s production growth potential comes from five currently producing zones, including the Lower Spraberry, Middle Spraberry, Wolfcamp A, the Upper Wolfcamp B and the Lower Wolfcamp B. Callon develops resources exclusively through horizontal drilling technology, both from existing properties and from properties acquired in recent acquisitions.
Callon has operational control to nearly all of their acreage and no drilling obligations within its acreage base. One distinct advantage is that Callon can quickly pivot operations and drill in areas that can offer