Callon Petroleum Co. has agreed to purchase more than 6,000 gross acres of both undeveloped and producing property, spread across four Texas counties in the Midland Basin, from undisclosed private sellers for $212.6 million in cash.

Callon, an independent exploration and production (E&P) company based in Natchez, MS, said the 6,230 gross (3,862 net) acres are in Andrews, Ector, Martin and Midland counties, but that 95% of the acreage is in Andrews and Midland, near the company’s existing Carpe Diem and Pecan Acres fields in Midland.

According to Callon, the acquired acreage also includes:

Callon added that no proved undeveloped reserves were estimated, given legacy vertical development and the company’s plan to develop the field with horizontal wells. It added that 100% of the targeted horizontal zones in the acquired acreage is held by production.

“The acquisition of these properties represents another significant step in the execution of our strategic plan in the Midland Basin,” said CEO Fred Callon. “The horizontal development of these fields will be immediately integrated into our recently announced capital plan to accelerate our drilling activity, and will also benefit from the knowledge base we have built from operations on our adjacent acreage.

“The fields are located in the core of the industry’s multiple-zone development activity, and will add substantially to our existing inventory of potential well locations. As a result, we believe that this new development unit will be a catalyst for incremental increases in our drilling activity in the near future.”

The deal calls for Callon to assume the role as operator after closing, upon which it will also own an estimated 62% working interest (46.5% net revenue interest). The company said one horizontal well on the property targeting the Wolfcamp B has been drilled to date, with two additional wells targeting the same formation in various stages of drilling and completion. Callon said a fourth well, targeting the Lower Spraberry, has been permitted and is scheduled to be drilled in 4Q2014.

Callon said the deal is subject to customary price adjustments, due diligence and closing conditions, and would have an effective date of May 1. The company secured a commitment for a term loan facility for an amount up to $275 million and an amended revolving credit facility with an initial borrowing base of $250 million. Callon said it hopes to close on the deal in early October.

Pro forma for the acquisition, coupled with a separate pending acquisition of 577 net acres in Reagan County, TX, Callon will have had 6,745 boe/d of estimated average net daily production during 2Q2014, with 80% of production weighted toward oil.

According to Callon’s website, the company entered the Permian Basin in 2009 when it acquired approximately 8,800 net acres in the play for $16 million. The company now holds more than 30,000 net acres in the play.