Callon Petroleum has entered into a definitive agreement to acquire certain undeveloped acreage and producing oil and gas properties, for a total consideration of $615 million, from American Resource Development LLC, American Resource Development Upstream LLC, and American Resource Development Midstream LLC.

The acquisition includes 27,552 gross (16,098 net) surface acres, centered around a contiguous position in Ward County, Texas, with additional acreage in Pecos and Reeves counties, Texas. It also includes net production, as of October, of 1,945 boed (71% oil).

The agreement also give Callon the opportunity to acquire an additional 1,006 net acres in Ward County, mutually identified by the parties, if such leasehold acquisitions are consummated prior to the closing of the acquisition.

On a pro forma basis, assuming the closing of the acquisition, Callon’s aggregate Permian basin position will include approximately 55,500 net surface acres concentrated in four core operating areas within both the Midland and Delaware sub-basins.

Fred Callon, chairman and CEO, said, “The position is well-suited for long lateral development and offers the potential for the development of multiple shale and sand intervals in the core of the Southern Delaware basin’s over-pressured oil window. We are looking forward to adding a fourth core operating area to our Permian portfolio and are currently planning to deploy an operated horizontal drilling rig to this acreage by mid-2017, in addition to our plans to be running four horizontal rigs in the Midland basin by the end of 2017.”

The acquisition is expected to close on or before Feb. 13, 2017.

Source: www.worldoil.com