Note 2 – Oil and Natural Gas Properties

Acquisitions

In the first quarter of 2014, the Company acquired 1,527 net acres in Upton and Reagan Counties, Texas, which are located in the southern portion of the Midland Basin near our existing core development fields, for an aggregate cash purchase price of $8,200. The properties bear a working interest of 100% and an average net revenue interest of 78%.

Acreage Expiration

During the first quarter of 2014, the Company transferred $9,855 from unevaluated properties to the full cost pool related to 5,924 net acres in the Northern Midland Basin  that expired or are scheduled to expire in the near future and are no longer included in the Company’s exploration and development plans. The Company continues to narrow its focus acreage for continued exploration and delineation efforts, which remains focused on horizontal development drilling in the Southern and Central portions of the Midland Basin. As of March 31, 2014, Callon has a remaining net acreage position in the Northern Midland Basin of 11,857 acres for which the Company is still evaluating potential future exploration activities.