Callon Petroleum has signed agreements with three private companies to acquire certain assets operated by Big Star Oil and Gas in the US for $220m.
Big Star operates about 17,298 gross surface acres in Howard County, Texas, with additional acreage in Martin, Borden and Dawson counties, Texas.
Other assets include 178 gross identified horizontal drilling locations, five currently producing horizontal wells, 124 gross additional potential horizontal drilling locations and about 4.1 million barrel of oil equivalent (boe) of net proved developed producing reserves.
Callon is set to assume operatorship of more than 80% of the acquired acreage in addition to owning an estimated 81% average working interest, upon closing of the Big Star transaction.
The company also signed agreements for the formation of an area of mutual interest with TRP Energy in western Reagan County, Texas, through the joint acquisition of 4,745 net acres north of the Garrison Draw field from a private party.
As part of the deal, Callon will also sell a 27.5% interest in the Garrison Draw field to TRP.
Upon closing of the transaction, the company’s acreage position in western Reagan County is expected to be increased by 1,759 net acres.
Callon Petroleum chairman and CEO Fred Callon said: "While we expect any near-term increase in operational activity following the acquisitions to be limited in 2016, we anticipate the horizontal development of the Big Star properties to be an important part of an expanded 2017 operational programme, incorporating a total of two to three horizontal drilling rigs."
Both the transactions are subject to the completion of customary due diligence and are expected to close in the second quarter of 2016.
