* Cash from GoM to be invested in onshore projects
* Reaffirms Q2, FY 2010 production outlook
* Sets aside 94 pct of capital budget for onshore plays
* Embarks $2 mln for maintenance in GoM deepwater region
* Shares up as much as 6 pct
June 8 Callon Petroleum Co (CPE.N) said it added a second rig in the Wolfberry oil play and plans to reinvest the cash flow from deepwater Gulf of Mexico (GoM) in onshore projects.
The company whose new rig will be operational from July 1, reaffirmed its production outlook for the second quarter and the full year.
The oil and gas company said it was "reinvesting the cash flow" from its deepwater GoM fields "into onshore conventional oil and shale gas projects".
Callon said its assets in the deepwater region of GoM were not impacted by the oil spill, but earmarked $2.7 million for maintenance operations in the region.
"Our current acreage position provides the company with an estimated five-year drilling program in the Wolfberry oil play," Callon said in a statement.
Last week, the company commenced drilling operations at its first Haynesville Shale well in northern Louisiana. The company plans to invest $42.9 million, or 94 percent of the total capital budget, to drill new onshore wells.
Callon will drill 26 gross wells in the Wolfberry oil play as part of its 2010 drilling program.
Shares of the company were up 1 percent at $5.45 Tuesday morning on the New York Stock Exchange. (Reporting by Vinay Sarawagi in Bangalore; Editing by Vyas Mohan) ((firstname.lastname@example.org; within U.S. +646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: email@example.com)