Callon Petroleum Company Announces Natural Gas and Crude Oil Hedges.Business Editors NATCHEZ Natchez, city, United States Natchez, city (1990 pop. 19,460), seat of Adams co., SW Miss., on bluffs above the Mississippi River; settled 1716, inc. 1803. , Miss.--(BUSINESS WIRE)--Feb. 5, 2004 Callon Petroleum Company (NYSE NYSE See: New York Stock Exchange : CPE (Customer Premises Equipment) Communications equipment that resides on the customer's premises. CPE - Customer Premises Equipment )(NYSE: CPE.PrA) today announced it has hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. a total of 5.4 million mmBtu (million British thermal units British thermal unit, abbr. Btu, unit for measuring heat quantity in the customary system of English units of measurement, equal to the amount of heat required to raise the temperature of one pound of water at its maximum density [which occurs at a temperature of 39. ) of natural gas production during the 15-month period from January January: see month. 2004 through March 2005. The hedges were implemented through derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. transactions in the form of no-cost collars. The company's natural gas hedges, by calendar quarter, consist of:
Volume Average Average
Hedged Floor Ceiling
Quarter (Thousand Price Price
Ended mmBtu) (mmBtu) (mmBtu)
-------- ---------- -------- -------
3/31/04 600 $5.13 $7.23
6/30/04 1,500 $5.00 $6.08
9/30/04 1,500 $5.00 $6.08
12/31/04 1,200 $5.00 $6.25
3/31/05 600 $5.00 $7.11
----------
5,400
==========
The company also announced it has hedged approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. one million barrels of crude oil production during the 12-month period from February February: see month. 2004 through January 2005. The hedges were implemented through derivative transactions in a combination of swaps and no-cost collars. The company's crude oil hedges, by calendar quarter, consist of:
Volume Average Average
Hedged Floor Ceiling
Quarter (Thousand Price Price
Ended Barrels) (per bbl) (per bbl)
-------- ---------- -------- --------
3/31/04 180 $30.10 $31.93
6/30/04 270 $30.10 $31.93
9/30/04 270 $30.10 $31.93
12/31/04 240 $30.11 $31.86
3/31/05 75 $30.12 $31.82
----------
1,035
==========
Callon Petroleum Company has been engaged in the exploration, development, acquisition and operation of oil and gas properties in the Gulf Coast region since 1950. This news release contains projections and other forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including statements regarding the company's ability to fund its future obligations, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These projections and statements reflect the company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors.
Monthly Detail of Hedges
------------------------
Natural Gas Crude Oil Crude Oil
---------------------- ---------------------- --------------
Collars (a) Collars (b) Swaps (b)
Delivery mmBtu/ Bbls/ Bbls/ Fixed
Month day Floor Ceiling day Floor Ceiling day Price
--------- ------- ------ ------- ------ ------- ------- ------ -------
Jan-04 6,667 $5.13 $7.23 - $ - $ - - $ -
Feb-04 6,667 $5.13 $7.23 2,000 $29.50 $32.25 1,000 $31.29
Mar-04 6,667 $5.13 $7.23 2,000 $29.50 $32.25 1,000 $31.29
Apr-04 16,667 $5.00 $6.08 2,000 $29.50 $32.25 1,000 $31.29
May-04 16,667 $5.00 $6.08 2,000 $29.50 $32.25 1,000 $31.29
Jun-04 16,667 $5.00 $6.08 2,000 $29.50 $32.25 1,000 $31.29
Jul-04 16,667 $5.00 $6.08 2,000 $29.50 $32.25 1,000 $31.29
Aug-04 16,667 $5.00 $6.08 2,000 $29.50 $32.25 1,000 $31.29
Sep-04 16,667 $5.00 $6.08 2,000 $29.50 $32.25 1,000 $31.29
Oct-04 16,667 $5.00 $6.08 2,000 $29.50 $32.25 1,000 $31.29
Nov-04 16,667 $5.00 $6.08 1,500 $29.33 $32.17 1,000 $31.29
Dec-04 6,667 $5.00 $7.11 1,500 $29.33 $32.17 1,000 $31.29
Jan-05 6,667 $5.00 $7.11 1,500 $29.33 $32.17 1,000 $31.29
Feb-05 6,667 $5.00 $7.11
Mar-05 6,667 $5.00 $7.11
(a) European style options settled at the close of the final trading
day for options as to contracts for the specified delivery months.
(b) Asian style options settled based on the average daily closing
price of prompt month contracts within the specified delivery
month.
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