Callon Petroleum Co., Natchez, Miss., (NYSE: CPE) reports a strategy shift to diversify its asset base to onshore in order to increase visible growth potential, including establishing a presence in the North Louisiana Haynesville play.

Callon has recently acquired a 70% operating interest in a 577-acre Haynesville shale unit in Bossier Parish, Louisiana, at a cost of $3 million. The unit is in the core of the play offset by wells having demonstrated initial production rates of approximately 20 million cubic feet of natural gas per day. In 2010, Callon plans to drill and complete two horizontal wells. The first well is planned to spud by mid-year. The unit will be developed with up to seven horizontal wells. The company estimates the gross ultimate gas recovery to be 6.4 billion cubic feet of gas per well at an estimated cost of $9 million to drill and complete.

In the Permian Basin, the company’s primary target in the Permian Basin is the Wolfberry trend, which is a proven, low-permeability oil play. There are 22 producing wells and 148 drilling locations based on a 40-acre spacing development. Callon plans to commence drilling in February and drill up to 16 Wolfberry wells in 2010 and add additional rigs in 2011 and 2012. The estimated gross ultimate recovery is between 80,000 and 100,000 barrels of oil per well at an estimated cost to drill and complete of $1.5 million. The company believes additional upside exists from the potential to reduce drilling spacing to 20 acres, providing an additional 160 drilling locations. Callon has controlling interest and will operate.

Callon chairman and chief executive Fred Callon says, “We’ve been working on this strategy shift over the past 18 months, developing the plan, working to find the right assets and building the right team to set the foundation for our plan to diversify our asset base. The cash flow generated from our two deepwater fields with quality, long-lived reserves will be reinvested into onshore conventional oil and shale gas properties.”

He adds adds, “Even though it is early in 2010, we have already made significant progress towards improving our liquidity position, securing the financial resources needed to fund our growth plan and to create visible growth potential for our shareholders,” he concludes.

Callon Petroleum has oil and gas properties primarily offshore the Gulf of Mexico.