Houston-based Callon Petroleum said recently that 85 percent of its capital expense budget of $725 million for 2022 will be allocated to Permian Basin. Callon said the increase of $216 million from last year reflects an increase in the number of drilled wells and the impact of inflation on the cost of such items as fuel, steel and labor. Joe Gatto, president and CEO, said the budget “reflects both our continued commitment to capital discipline and a greater focus on Callon’s high-rate-of-return Permian assets… We expect to generate oil production growth in excess of 10 percent over the course of the year.”
Permian activity in 2022 will feature co-development of Wolfcamp A and B in Delaware Basin and lower Spraberry and Wolfcamp A and B in Midland Basin. Callon has seven active rigs – four in Delaware, two in Midland and one in Eagle Ford (with plans to release a Delaware rig in April).
Production in 2021 was 95,600 boed (64 percent oil) – decrease of six percent from 2020. Production in 2021Q4 was 112,400 boed – up 18 percent from 2020Q4. Callon brought online 16 wells in Delaware in 2021Q4. More than half of Callon’s 2022 Delaware program will focus on its new Delaware south area.