Permian Basin

Callon's entry into the oil prone Permian Basin was accomplished in October 2009 with the acquisition of various assets from ExL Petroleum. In early 2010 we began an aggressive development of those assets, concentrating on Wolfberry potential in three core areas at Kayleigh, Carpe Diem and East Bloxom. The Wolfberry play is characterized by low permeability reservoir, which requires multi-stage fracture stimulation of vertical wells, which ultimately produce oil for decades.

• Approximately 33% of our 2010 proved reserves were attributable to our properties in the Wolfberry play of the Permian Basin located in Crockett, Ector, Midland and Upton Counties, Texas.
• At June 30, 2011, production from our Wolfberry acreage increased to a net 1,200 Boe per day, an increase of 118% over year-end 2010.
• During 2010, the through a number of small acquisitions and farm-ins, we increased our working interest in the East Bloxom development area of the Permian Basin from an average of 47% to a 100% working interest, which allows us to control the development activity in all of our Permian Basin properties.
• Continuous 3-rig drilling program in 2011—36 gross wells planned.
• Approximately 80% of our 8,800 net acre leasehold in the Permian Basin in prospective for the Wolfberry play, and provides a remaining multi-year inventory of approximately 300 net potential well locations, 132 of which are based upon 40-acre spacing.
• We are the operator of the Wolfberry acreage with an average 95% working interest, which is primarily held by production, giving us operational flexibility and control over the pace of development.