Callon Petroleum Co. (NYSE: CPE) said Feb. 13 it completed its acquisition of undeveloped acreage and producing oil and gas properties in the Southern Delaware Basin from the Ameredev family of companies.

The $633 million cash deal gives Callon Petroleum about 16,098 net surface acres centered around a contiguous position in the southern Delaware Basin in Ward County, Texas. In addition, the company is picking up an incremental 590 net acres, for a total of 16,700 net surface acres in Ward and Pecos counties, Texas.

The acquired contiguous acreage position resides within a deep, over-pressured region and includes multiple, oil-weighted target intervals, said Fred Callon, the Natchez, Miss.-based company's chairman and CEO.

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"This new development unit, our fourth core operating area in the Permian which we have named Spur, will be an important component of our growing portfolio of investment opportunities that we believe will drive attractive returns on total capital employed as our Permian drilling activity increases," Callon said in a statement.

The company plans to add a dedicated horizontal drilling rig to the Spur operating area by mid-year 2017, which will be its fourth operated rig in the Permian, he said.

Callon estimates the company added 480 gross horizontal locations on the acquired Ward acreage in the Wolfcamp C and various Bone Spring intervals alone.

After closing of this transaction, Callon Petroleum's position in the Permian Basin now totals more than 56,000 net surface acres.

Total cash consideration included the incremental acreage and the purchase of the midstream assets of Ameredev Midstream Development LLC. A Callon subsidiary made the purchase from American Resource Development LLC, American Resource Development Upstream LLC and American Resource Development Midstream LLC.