Callon Petroleum Company has decided to suspend operations under way to develop the Entrada Field located on the Garden Banks 782 Block in the deepwater of the Gulf of Mexico. The Entrada Field is owned 50% by a subsidiary of Callon, which is the operator.
The Company drilled the GB 782 # 3 well to a total depth of 21,100 feet and the well needs to be sidetracked back toward the original GB 782 #2 discovery well. The significantly higher than expected costs incurred to date and commodity prices which have declined to less than half of their levels when development operations began in mid-2008, has resulted in a serious decline in project economics. After reviewing all of these factors, the Company has decided to suspend development efforts. Under current economic conditions the Company does not anticipate returning to the project.
"We are extremely disappointed that we have been forced to make this difficult decision as we had high hopes for the Entrada Field," said Fred Callon, Chairman and CEO. "The current financial climate is extremely difficult and presents a significant challenge for a company of Callon’s size to absorb continuing cost increases of this magnitude while commodity prices continue to fall. We will continue to be an active participant in the Gulf of Mexico Region as we seek to build the company."
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