Callon Petroleum Company Initiates Search To Identify Partner For Entrada Field Development.

NATCHEZ, Miss. -- Callon Petroleum Company (NYSE: CPE) announced today that with the recent execution of a Production Handling Agreement with the Magnolia Field partners and finalization of the development plan, it is now ready to identify a partner to participate in the Entrada Field development.

Callon owns a 100% working interest and is the operator of the Entrada Field, located in the deepwater region of the Gulf of Mexico, which includes five federal offshore blocks at Garden Banks 738, 782, 785, 826 and 827.

Two discovery wells and seven delineation wells have been drilled to date, and the company's independent petroleum engineers have estimated that proved reserves, net of royalties, attributable to the Entrada Field are approximately 17.5 million barrels of crude oil (MMbo) and 87.1 billion cubic feet of natural gas (Bcf). In addition, associated probable reserves, net of royalties, are estimated to be 17.6 MMbo and 42.2 Bcf, representing a total proved plus probable net reserve base of approximately 56.6 million barrels of oil equivalent.

Callon has retained Merrill Lynch Petrie Divestiture Advisors to assist the company in identifying a partner to participate in the continued development of the Entrada Field.

"We are excited about beginning the search to find the right partner to participate with us in the Entrada field development and feel that now is the time to begin this process with our target of initial production by the first quarter 2009," explains Fred Callon, Chairman and CEO.

For information regarding the partner identification process, please contact Joe Gatto of Merrill Lynch & Co. at 713-759-2526.

Callon Petroleum Company is engaged in the exploration, development, acquisition and operation of oil and gas properties primarily in the Gulf Coast region. Callon's properties and operations are geographically concentrated in Louisiana, Alabama and the offshore waters of the Gulf of Mexico.

It should be noted that this news release contains projections and other forward-looking statements 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. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K, available on our website or the SEC's website at www.sec.gov.

The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We include in this news release an estimate of net probable reserves, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our Form 10-K, available from us at www.callon.com or from the SEC at www.sec.gov. You can also obtain this form from us by calling 601-442-1601 or from the SEC by calling 1-800-SEC-0330.