Struggling Houston firm to search for oil, gas in Eagle Ford

Houston-based Callon Petroleum Co. seeks to drill four new wells in South Texas last week as it looks to reorganize its business to avoid delisting.

Callon (NYSE: CPE) came out ahead on this week’s drilling permit roundup, filling more new permit applications between April 20 and 26 than any other company besides ConocoPhillips, which also filed four. Callon wants to drill for oil and gas in the Eagleville Field on a lease in La Salle County. So far this year, the company has asked the Railroad Commission of Texas for permission to drill 11 new wells in the Eagle Ford Shale, all in La Salle County.

Callon is one of at least 10 Houston-based oil producers facing delisting as the oil market flounders with an oversupply and lack of demand. On April 16, the company was informed that it had six months to get its 30-day average stock price to $1 per share or it would be booted from the New York Stock Exchange. The company’s stock opened at 58 cents per share on Tuesday.

The company has already cut its 2020 budget by at least $250 million and plans to take further steps to reduce spending, including reducing the size of the crews and the number of drilling rigs on its leases. Only one of its three rigs will be placed in the Eagle Ford somewhere on the 91,000 gross acres it acquired when it bought Carrizo Oil & Gas Inc. last year.

South Texas Drilling Permit Roundup

The South Texas Drilling Permit Roundup is a weekly review of new drilling permit applications filed with the Railroad Commission of Texas for a 67-county area of South Texas. For the full drilling data table, see below.

Date Range: April 20 to 26

New Permit Applications: 18

Companies Filing: 12

Most Active Company: ConocoPhillips (Burlington Resources) and Callon Petroleum Co. with four applications each

Most Active County: La Salle County with five applications

New and Noteworthy:

The U.S. arm of British chemical and gas company Ineos filed its second-ever Texas permit to drill for oil in the Austin Chalk last week. Ineos USA Oil & Gas LLC, which is based just south of Houston in League City, plans to drill for oil in the Giddings Field of Fayette County. The well would only be Ineos’ second in the U.S. if it drills on an earlier permitted site also in Fayette County. In the U.K., Ineos is both a petrochemical manufacturer and the biggest player in the U.K. onshore gas sector with access to over a million acres for drilling in England and Scotland, according to its website.

Helotes-based Verdisys LLC submitted an application to drill an oil and gas well in the border county of Val Verde. Though the well will sit within the same Railroad Commission district as San Antonio, it will lie within the Permian Basin. The permit is the first filed in 2020 for Verdisys and the third overall. It filed to drill its first Texas well in 2018.