Callon Petroleum Company Announces Entry Into the Core Southern Delaware Basin

NATCHEZ, Miss., Dec. 13, 2016

Key attributes of the Ameredev acquisition include:

• Approximately 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;
• Current net production of approximately 1,945 barrels of oil equivalent per day (71% oil) for the month of October 2016 based on information provided by the seller, including production from 20 gross operated horizontal wells currently producing from the Wolfcamp and Bone Spring formations;
• Estimated delineated base inventory of 481 gross (206 net) identified horizontal drilling locations targeting the Wolfcamp A and B zones with an average lateral length of approximately 7,500 feet, including 36% of the inventory comprised of 10,000 foot laterals;
• Additional potential horizontal drilling locations from both delineated and emerging prospective zones in the Wolfcamp and Bone Spring formations;                  
• Established infrastructure ownership, including five salt water disposal wells and over 13 miles of gathering lines and gas lift return lines; and
• An agreement to acquire up to an additional 1,006 net acres in Ward County, mutually identified by Callon and Ameredev, if such leasehold acquisitions are consummated prior to closing of the Ameredev acquisition.

Ameredev currently operates approximately 80% of net surface acreage and has an average working interest in operated properties of approximately 82%. 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 Chief Executive Officer commented, "Our initial entry into the Delaware Basin caps a transformative year for Callon. The Ameredev acquisition is the result of a patient, concentrated effort to identify the appropriate de-risked, oily acreage position in the Delaware Basin that provides the opportunity to leverage our Permian Basin technical expertise while complementing our deep inventory of high-return well locations and capital efficient operations in the Midland Basin. 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. Overall, we believe that this position is an excellent fit with our broader Permian portfolio and organizational capabilities, and, importantly, accretive to the value proposition for our shareholders."

The pending acquisition is expected to close on or before February 13, 2017, subject to the completion of customary closing conditions.

Investor conference call

Callon will host a conference call on Wednesday, December 14, 2016, to discuss the Ameredev acquisition.