Callon Petroleum Company Reports First Quarter Results.

Business Editors

NATCHEZ, Miss.--(BUSINESS WIRE)--April 20, 2001

Callon Petroleum Company (NYSE:CPE) (NYSE:CPE.PrA) today reported the results of its operations for the quarter ending March 31, 2001.

For the first quarter of 2001 the company reported net income of $6,174,000 or $0.41 per diluted share. This compares to the 2000 first quarter net income of $1,164,000 or $0.05 per share on a diluted basis.

Operating results for the three-month period ended March 31, 2001 include oil and gas sales of $20.2 million from average production of 41.7 million cubic feet of natural gas equivalent per day (MMcfe/d). This corresponds to sales of $9.4 million from average daily production of 38.2 MMcfe/d during the same period of 2000. The average price per thousand cubic feet of natural gas increased by 117 percent to $5.46 compared to $2.52 during the same period a year earlier, while the average price per barrel of oil increased slightly to $26.62 compared to $26.42 during the first quarter of 2000.

Callon Petroleum Company is engaged in the acquisition, development, exploration and operation of oil and gas properties primarily in the Gulf Coast region.

                       Callon Petroleum Company
                     Summary Financial Information
               (In thousands, except per share amounts)

                                        Three Months Ended
Consolidated Statements of                   March 31,
  Operations Data:                       2001        2000
                                         ----        ----
Revenues:
   Oil & gas sales                      $20,177    $9,448
   Interest and other                       635       670
                                        -------   -------
       Total revenues                    20,812    10,118
                                        -------   -------

Costs and Expenses:
   Lease operating expenses               2,673     1,820
   Depreciation, depletion
      and amortization                    4,897     3,717
   General and administrative, net        1,123     1,042
   Interest expense                       2,621     1,775
                                        -------   -------
      Total costs and expenses           11,314     8,354
                                        -------   -------

Income from operations                    9,498     1,764
Income tax expense                        3,324       600
                                        -------   -------
Net income                                6,174     1,164
Preferred stock dividends                   319       553
                                        -------   -------


Net income available to common shares    $5,855      $611
                                        =======   =======


Net income per common share:
  Basic                                   $0.44     $0.05
  Diluted                                 $0.41     $0.05


Shares used in computing net income
  per common share:
  Basic                                  13,253    12,156
  Diluted (1)                            14,908    12,354

      (1) Diluted shares for 2001 includes 1,366,000 shares of common
        stock because of the dilutive impact of the convertible
        preferred stock in the first quarter of 2001. The conversion
        of the preferred stock was not included in the 2000 diluted
        calculation due to its antidilutive impact on earnings per
        share.


Consolidated Condensed Balance Sheet Data:
                                                March 31,  Dec. 31,
                                                  2001       2000
                                                  ----       ----
Cash and cash equivalents                         $6,456    $11,876
Oil and gas properties                           277,221    258,613
All other assets                                  28,423     31,080
                                                --------   --------
   Total assets                                 $312,100   $301,569
                                                ========   ========

Long-term debt                                  $140,000   $134,000
All other liabilities                             30,063     31,241
Stockholders' equity                             142,037    136,328
                                                --------   --------
   Total liabilities and stockholders' equity   $312,100   $301,569
                                                ========   ========



                                          Three Months Ended
                                               March 31,
                                               --------
                                            2001      2000
                                            ----      ----
                               ($ in thousands except per share amounts)
Other Financial Information:

Net cashflow from operations before
   changes in current assets
   and liabilities                        $14,891    $5,878

Net cashflow per share                      $1.00     $0.43

Weighted average shares outstanding        14,908    12,354

EBITDA                                    $17,512    $7,653

Production and price information:

Production:
   Oil (MBbls)                                 51        61
   Gas (Mcf)                                3,444     3,107
   Gas equivalent (Mcfe)                    3,751     3,471
   Average daily (MMcfe)                     41.7      38.2

Average prices:
   Oil ($/Bbl)                             $26.62    $26.42
   Gas ($/Mcf)                              $5.46     $2.52
   Gas equivalent ($/Mcfe)                  $5.38     $2.72



                       Callon Petroleum Company
                   Second Quarter and Full Year 2001
                          Guidance Estimates
          (In thousands, except per production unit amounts)

                                          Guidance        Guidance
                                         for Second       for Full
Description                             Quarter 2001      Year 2001
-----------                             ------------      ---------

Production volumes (MMcfe/d)              43 - 45         50 - 52

Percent Gas                                  90%            90%

Average costs (per Mcfe):
 Lease operating expense               $0.67 - $0.70   $0.61 - $0.64
 General and administrative expense    $0.28 - $0.29   $0.24 - $0.26
 Interest expense                      $0.70 - $0.74   $0.65 - $0.67
   DD&A                                $1.28 - $1.30   $1.28 - $1.30

Volumetric production payment:
 Committed volume (MMcf)                    580             2,237
 Effective price (per Mcf)                 $2.08            $2.08

Natural gas hedges (collars):
 Volume (MMcf)                             1,300            4,400
 Average floor (per Mcf)                   $4.39            $4.73
 Average ceiling (per Mcf)                 $5.50            $5.91

Effective tax rate                          35%              35%

Basic weighted average shares             13,253           13,253

Diluted computation:
 Basic weighted average shares            13,253           13,253
 Dilutive impact of stock options           290              290
 Dilutive impact of conv.
  preferred stock                          1,365            1,365
                                           -----            -----
Diluted weighted average shares           14,908           14,908

The preceding guidance estimates contain assumptions that we believe are reasonable. These estimates are based on information that is available as of the date of this news release. We are not undertaking any obligation to update these estimates as conditions change or as additional information becomes available.

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 include:

-- general economic conditions;

-- volatility of oil and natural gas prices;

-- uncertainty of estimates of oil and natural gas reserves;

-- impact of competition;

-- availability and cost of seismic, drilling and other equipment;

-- operating hazards inherent in the exploration for and production of oil and
natural gas;

-- difficulties encountered during the exploration for and production of oil
and natural gas;

-- difficulties encountered in delivering oil and natural gas to commercial
markets;

-- changes in customer demand and producers' supply;

-- uncertainty of our ability to attract capital;

-- compliance with, or the effect of changes in, the extensive governmental
regulations regarding the oil and natural gas business;

-- actions of operators of our oil and gas properties;

-- weather conditions; and

-- the risk factors discussed in our filings with the Securities and Exchange
Commission, including those in our Annual Report for the year ended December
31, 2000 on Form 10-K.

The preceding estimates reflect our review of continuing operations only. These estimates do not take into account any material transactions such as sales of debt and equity securities, acquisitions or divestitures of assets, and formations of joint ventures. We continually review these types of transaction and may engage in one or more of these types of transactions without prior notice.