Natchez, MS (February 20, 2001) --Callon Petroleum Company ( NYSE: CPE / CPE.PrA) reported today on its recent production and drilling activities.
Production -- The company's production has increased during the first quarter to a current rate exceeding 47 million cubic feet of natural gas equivalent a day (MMcfe/d), with natural gas representing 90 percent of the production stream. In addition, Callon anticipates that its Mobile Block 908 #4 discovery well will be placed online prior to the end of February. The Mobile Block 864 #A-3 unit well currently is being drilled from a location adjacent to existing production facilities and should be completed and put on production in early March.
Gulf of Mexico Shelf Drilling -- The company previously announced that the rig Pride Wyoming is being utilized to drill six wells with an option to drill a seventh. Currently, it is drilling the Mobile Block 864 #A-3, the fourth in this series of wells. Subsequently, the rig will be moved to Callon's South Marsh Island Block 261 field to drill up to three wells, the first of which will be a sidetrack out of an existing wellbore.
In addition, the company today announced that it has contracted for the R&B Falcon Rig 251 to drill a series of up to five shelf wells on four prospects. These prospects consist of:
West Cameron Block 455 -Callon holds a 100 percent working interest in this prospect. The test well, located in 110 feet of water, will be drilled to a depth of 7,200 feet.
Matagorda Island Block 710 - The company holds a 50 percent working interest in this prospect. The test well, located in 150 feet of water, will be drilled to a depth of 10,500 feet.
Mustang Island Block 872 -Callon holds a 100 percent working interest in this prospect. The test well, located in 170 feet of water, will be drilled to a depth of 7,500 feet.
North Padre Island Block 913 - The company holds a 100 percent working interest in this prospect. The test well, located in 160 feet of water, will be drilled to a depth of 7,200 feet.
Callon anticipates participating in a total of 16 wells to be spud on the Gulf of Mexico shelf area prior to mid-year. This will represent a record number of Gulf of Mexico shelf wells drilled by Callon-a 78 percent increase when compared with any complete prior year.
Gulf of Mexico Deepwater Drilling --Callon announced today that the Moccasin prospect test well at Garden Banks Block 297, operated by Shell Deepwater Development, Inc., has been abandoned without encountering commercial quantities of hydrocarbons. The company had a 12.5 percent working interest in the well. Drilling costs net to Callon are estimated to be $5.0 million and under full cost accounting rules will not be a direct charge to first quarter 2001 results.
Callon Petroleum Company has been engaged in the exploration, development, acquisition and operation of oil and gas properties in the Gulf Coast region since 1950.
This news release contains projections and other forward- looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These projections and statements reflect the company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors.
For further information contact: Terry Trovato P.O. Box 1287 Natchez, MS 39121 (601) 442-1601terryt@callon.com