W&T Offshore acquires Callon Petroleum GOM assets


W&T Offshore acquires Callon Petroleum GOM assets

HOUSTON -- W&T Offshore has entered into an agreement with Callon Petroleum Operating Company to acquire substantially all of Callon's E&P properties in the GOM. The transaction includes a 15% working interest in the Medusa field (deepwater Mississippi Canyon blocks 538 and 582), a 10% membership interest in Medusa Spar LLC (which owns a 75% interest in the Medusa field's production facilities), and various interests in 12 non-operated GOM fields.

The purchase price is $100 million (subject to customary post-effective date adjustments) and the assumption of $6.4 million of future asset retirement obligations.  The effective date is July 1, , and the transaction is expected to close on or about November 30.  The acquisition will be funded from W&T's available cash on hand and revolving credit facility.

Total net proved reserves to be acquired are 2.4 million boe, all of which are classified as proved developed reserves; probable reserves of 2.3 million boe; and possible reserves of 2 million boe.  These reserves were determined by Netherland, Sewell and Associates, as of July 1, based on SEC reserves definitions and recent NYMEX pricing. During September, average gross daily production from the interests being acquired in the Medusa field was approximately 7,000 boe (1,050 boe net), of which 88% is oil; and the average net daily production from the remaining properties being acquired was approximately 5.1 million Cfge, of which 98% is natural gas.

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