Callon Petroleum Company (NYSE:CPE) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 09:00 am ET

Previous

Callon Petroleum Company (NYSE:CPE) Q3 2019 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Q & A
Operator
Operator

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Neal Dingmann with SunTrust. Please go ahead.

Analyst
Neal Dingmann

Good morning, all. Good color. Joe, I was looking at Slide 6, particularly the bottom right there that shows the Midland large pad outperformance. Given the continued outperformance you're seeing, I see that Wolfcamp seven-well pad, as well as the five. Really what's interesting is the outperformance versus the parent-child offset.

Could you talk about maybe multi-zone pads and kind of what size pads you're targeting there?

Executive
Joe Gatto

Sure. Actually, I'll let Jeff start off on that.

Executive
Jeff Balmer

Yes. One of the nice things about that is that was a multi-zone pad. So there was a three-well development kind of on the left hand side of the section, with a four-well development on the right hand of the section. Each bucket of those, the three and the four, had an existing well drilled back in 2015, if memory serves me correctly. And those parent wells are in the primary zone of the Wolfcamp A. So we offset two wells off of that primary zone and then also went above it to the Lower Spraberry. And so, you see a multi-zone stack development program that's more efficient. It eliminates the use -- or the creation of future child wells.

We did do a little bit of a different completion design on them, where the interior wells were a little softer in their design, a little bit less water, so we wouldn't negatively affect the existing parent well, and then kind of got after the wells on the outside. So that's a good example of a thoughtful application of design changes and acknowledging that some depletion would have occurred on the existing wells. And it's a modest blueprint for what we plan on doing going forward anytime that we do have a situation where we want to do stack development in an area that has existing parent wells.

Analyst
Neal Dingmann

Great details. And just one last follow-up. Could you just talk what you're thinking sort of early next year for just further cost reductions? Particularly, I'm curious on LOE as you get more in development mode. Thank you, all.

Executive
Jeff Balmer

Sure. The main thing that we're trying to do is just maintain focus. I really do like the progress that the team has made throughout 2019. There's a whole number of things that have contributed to our performance, and I think these are -- without going into specific detail on any of them, the things that we've done very well, we can continue to do better. So whether it is -- we mentioned the chemical program, with getting improvements on the ESP runtime. So our submersible pumps, the longer that they're in the wells and the better that they perform, the lower the cost is from having to go in and pull those.

We've had pure workovers on our historic vertical wells, which tend to be the lower producers, but are still reasonably costly to go in