Local oil companies watching gulf

Published 12:00 am Tuesday, June 8, 2010

NATCHEZ — The local company with deep-water wells in the Gulf of Mexico does not have immediate plans that will be affected by the six-month moratorium on offshore drilling that President Obama recently announced.

Callon Petroleum Investor Relations Contact Terry Trovato said the company has not drilled any offshore wells in the Gulf of Mexico in the last 18 months and does not have plans to do so for the remainder of the year.

Meanwhile, the company has remained in close contact with the operators of its two major deep water producing properties, Medusa and Habanero, and Trovato said the operations at those wells have not been affected by the continuing BP oil spill.

Ninety-four percent of Callon’s budget for capital expenditure for 2010 is being spent in the onshore Permain Basin of west Texas and in the Haynesville Shale in northern Louisiana, Trovato said.

The acquisition of properties in those areas was part of a concerted effort on Callon’s part in the last year and a half to move production onshore, he said.

The moratorium allows wells already in operation to continue producing, but does not allow for new drilling.

Even though other companies in the area may not have offshore assets, W.T. Drilling President Leo Joseph said the impact of the offshore blowout is being felt.

“I am sure everybody in this area will be impacted somewhat because they are looking at their practices as far as drilling procedures are concerned, looking and checking what they do to make sure they are not the next ones in the news,” he said.

While the concerns onshore operations face are usually mechanical in nature rather than blowouts, Joseph said W.T. Drilling is tightening up their onshore procedures.

“It sure doesn’t hurt to look at yourself, analyze and make sure you are doing things right,” he said.