Environmental

Callon is committed to safeguarding the environment and conducting our business in a manner designed to comply with applicable environmental laws and regulations and apply responsible standards where such laws or regulations do not exist. We have adopted a Safety and Environmental Policy that sets forth our operating principles and our expectations of Callon employees and contractors to operate safely, responsibly and in an environmentally sound manner.

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Callon Petroleum

Responsibility

The safety of our employees, contractors and communities is of utmost importance – this is not negotiable. We recognize that we earn the right to operate every day by developing our assets responsibly and with respect for the environment. We focus on safety and protection of the environment in every operation, and all Callon representatives are authorized to “stop work” if these are at risk.

Protecting local water supplies and minimizing our use of fresh water resources are high priorities in our operations.

  • Water recycling program fully operational. Water is a necessary component of our drilling and completion activities and is also produced along with hydrocarbons once a well is brought online. To optimize our “full cycle” water usage and impact, Callon has made meaningful investments in long-term water recycling infrastructure. In 2018, we implemented a dual-basin recycling program that handled over 4.2 million barrels of produced water during the year, reducing environmental impact to the communities in which we operate by significantly lowering fresh water usage and lessening the need to dispose of produced water. We are expanding these facilities to continue growing our recycled water volumes over time.
  • Optimizing water transportation. We have also invested in water transportation infrastructure directly and with midstream partners in order to minimize the costs and environmental impact of water hauling trucks on the road. In 2018, over 90% of our produced water was transported by pipeline.
  • Highest standards for drilling operations. In order to protect groundwater sources for drinking and other community needs, Callon has adopted best practices in drilling operations and well designs to promote long-term well integrity.
2019 Forecast: 80% of water to be recycled

Forecasting more than 80% of the water we use in
Delaware Basin operations will be recycled at YE19.

As part of our environmental program, Callon monitors and seeks to reduce greenhouse gas (GHG) and other emissions from our operations. Our efforts include:

  • EPA Reporting. We report total emissions to the EPA consistent with regulatory requirements. In 2018, our total reported emissions were 430,019 mtCO2e.  2018 was the first year we were required to report emissions under the Onshore Gathering and Boosting Segment. Emissions for that segment were significantly impacted by an extended outage at a third party gas processing facility that necessitated irregular flaring during the second half of the year.
  • Utilizing dual-fuel rigs. As of 2019, all of the drilling rigs operating on Callon assets are dual-fuel rigs. These rigs reduce greenhouse gas emissions in our operations by using clean-burning compressed natural gas (CNG) to power the rigs, when possible. This change is expected to reduce emissions in 2019 and beyond.
  • Investments in power substations. In recent years, Callon has invested over $10 million to build and connect power substations near our operations. By providing a more consistent electricity supply, we have eliminated diesel-powered generators as a primary source of power and in doing so lowered our emissions and operating costs.
  • Installation of vapor recovery units (VRUs). Callon has installed VRUs on all new facilities to capture potential facility emissions and recover high-value gases for processing and sales.
  • Reduction in truck traffic. Our investments in, and third-party contractual commitments for capacity on, pipelines for the transport of crude oil and water over the past several years have meaningfully reduced our use of trucks—and the resultant emissions—in the transport of fluids in our operations. In 2018, over 90%of our crude oil and water were transported on pipelines.

At Callon we strive to be good stewards of the environment and minimize our impact in the areas where we operate.

  • Focused spill prevention efforts. In 2018, we decreased the number of spills in our operations by more than 40% and spill volumes by more than 65% through focused tracking to identify and mitigate trends and by reinforcing prevention with employees and contractors. In recent years, we have also:
    • Enhanced facility design to mitigate leaks and enhance spill capture mechanisms at new facilities.
    • Installed state-of-the-art automatic remote tank monitoring and alarm systems to shut down operations in the event of a spill.
    • Upgraded lightening detection equipment to reduce the risk of weather-induced spills and leaks in light of the weather conditions in the Permian Basin.
  • Developing acreage to minimize surface impact. Callon looks to minimize surface impact in our development activities. Where possible, Callon employs multi-well, multi-interval project development and extends the lateral lengths of wells to minimize our above-ground footprint.
  • Accountability. To ensure accountability and drive continual improvement, spill occurrences and volumes are critical elements considered by our Compensation Committee in determining the discretionary component of the annual bonus payouts for each of our officers.
40%+ spill reduction in 2018
65%+ spill volume reduction in 2018

The Environmental Partnership

Callon is proud to support partnerships and initiatives promoting transparency and innovation in best environmental practices. In 2018, we joined the Environmental Partnership, a collaborative effort of the U.S. oil and natural gas industry. Through this partnership, we are working with industry peers to share best practices and continuously improve environmental performance while responsibly developing our nation’s essential oil and natural gas reserves.

Frac Focus Chemical Disclosure Registry

To provide transparency into our operations, we disclose the fluids used in our hydraulic fracturing operations via the Frac Focus public registry. FracFocus is the national hydraulic fracturing chemical registry that is managed by the Ground Water Protection Council and Interstate Oil and Gas Compact Commission, two organizations whose missions both revolve around conservation and environmental protection.