Callon Petroleum Company Reports Results For Third Quarter, First Nine Months of 2001.

Business Editors & Energy Writers

NATCHEZ, Miss.--(BUSINESS WIRE)--Nov. 7, 2001

Callon Petroleum Company (NYSE:CPE) (NYSE:CPE.PrA) reported results of its operations today for both the quarter and the nine-month period ended September 30, 2001.

Results for the three-month period ended September 30, 2001 include net income of $262,000, or $0.00 per diluted share. This compares to net income of $4.3 million, or $0.29 per share on a diluted basis, for the same period in 2000. Total revenues for the three-month period ended September 30, 2001 were $12.7 million compared to $16.4 million for the same period in 2000.

Operating results for the three-month period ended September 30, 2001 include oil and gas sales of $12.4 million from average production of 40.4 million cubic feet of natural gas equivalent per day (MMcfe/d). This corresponds to sales of $16.0 million from average daily production of 46.6 MMcfe/d during the same period in 2000. During the third quarter of 2001, natural gas represented approximately 88 percent of the company's total production. The average price received per thousand cubic feet of natural gas in the third quarter of 2001 decreased by 7 percent to $3.38 compared to $3.63 during the same three months in 2000, while the average price received per barrel of oil in the third quarter of 2001 decreased by 17 percent to $24.28 compared to $29.37 during the same period a year earlier.

For the nine months ended September 30, 2001, the company reported net income, before preferred stock dividends, of $9.9 million, or $0.67 per diluted share. This compares to net income of $8.6 million, or $0.56 per share on a diluted basis, for the same period in 2000. Total revenues for the nine-month period ended September 30, 2001 were $51.2 million compared to $41.3 million for the first nine months in 2000.

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.

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

                                Three Months Ended  Nine Months Ended
                                     Sept. 30,          Sept. 30,
                                ------------------  ------------------
                                  2001      2000      2001      2000
                                --------  --------  --------  --------

Consolidated Statements of Operations Data:

Revenues:
  Oil and gas sales             $ 12,404  $ 15,960  $ 49,647  $ 39,720
  Interest and other                 311       462     1,592     1,536
                                --------  --------  --------  --------
    Total revenues                12,715    16,422    51,239    41,256
                                --------  --------  --------  --------
Costs and expenses:
  Lease operating expenses         3,238     2,295     8,963     6,449
  Depreciation, depletion
   and amortization                4,722     4,568    14,773    12,885
  General and administrative, net    843       992     3,545     2,964
  Interest expense                 3,508     2,103     8,742     5,949
                                --------  --------  --------  --------
    Total costs and expenses      12,311     9,958    36,023    28,247
                                --------  --------  --------  --------
Income from operations               404     6,464    15,216    13,009
Income tax expense                   142     2,197     5,326     4,423
                                --------  --------  --------  --------
Net income                           262     4,267     9,890     8,586
Preferred stock dividends            320       553       958     1,658
                                --------  --------  --------  --------

Net income (loss) available
 to common shares               $    (58) $  3,714  $  8,932  $  6,928
                                ========  ========  ========  ========

Net income per common share:
  Basic                         $   0.00  $   0.30  $   0.67  $   0.57
                                ========  ========  ========  ========
  Diluted                       $   0.00  $   0.29  $   0.67  $   0.56
                                ========  ========  ========  ========

Shares used in computing net
 income per common share:
  Basic                           13,284    12,228    13,265    12,185
                                ========  ========  ========  ========
  Diluted                         13,407    14,968    13,412    12,476
                                ========  ========  ========  ========



Consolidated Condensed Balance Sheet Data:

                                Sept. 30, Dec. 31,
                                  2001      2000
                                --------  --------
                                  (In thousands)
Cash and cash equivalents       $  6,883  $ 11,876
Oil and gas properties           324,018   258,613
All other assets                  29,249    31,080
                                --------  --------
    Total assets                $360,150  $301,569
                                ========  ========

Long-term debt                  $137,702  $134,000
All other liabilities             68,029    31,241
Stockholders' equity             154,419   136,328
                                --------  --------
    Total liabilities and
     stockholders' equity       $360,150  $301,569
                                ========  ========



                                Three Months Ended  Nine Months Ended
                                     Sept. 30,           Sept. 30,
                                ------------------  ------------------
                                  2001      2000      2001      2000
                                --------  --------  --------  --------

Other Financial Information:

Cashflow from operations before
 changes in current assets and
 liabilities (000's)            $  6,777  $ 12,030  $ 32,772  $ 27,827

Cashflow per share              $   0.48  $   0.80  $   2.37  $   2.10

EBITDA (000's)                  $  9,489  $ 13,892  $ 39,904  $ 33,072


Production and Price Information:

Production:
  Oil (MBbls)                         76        56       196       186
  Gas (MMcf)                       3,258     3,950    10,238    10,956
  Gas equivalent (MMcfe)           3,713     4,285    11,414    12,072
  Average daily (MMcfe)             40.4      46.6      41.8      44.1

Average prices:
  Oil ($/Bbl)                   $  24.28  $  29.37  $  25.04  $  27.42
  Gas ($/Mcf)                   $   3.38  $   3.63  $   4.41  $   3.16
  Gas equivalent ($/Mcfe)       $   3.46  $   3.72  $   4.39  $   3.29



                       Callon Petroleum Company
                          Guidance Estimates
          (In thousands, except per production unit amounts)

                                                          Guidance
Description                                                4Q 2001
                                                      ---------------

Production volumes (MMcfe/d)                                  39 - 42

Percent Gas                                                        89%

Average costs (per Mcfe):
  Lease operating expense                             $ 0.83 - $ 0.88
  General and administrative expense                  $ 0.27 - $ 0.29
  Interest expense                                    $ 1.07 - $ 1.15
  DD&A                                                         $ 1.25

Volumetric production payment:
  Committed volume (MMcf)                                       586.5
  Effective price (per Mcf)                                    $ 2.08

Natural gas hedges (collars):
  Volume (MMcf)                                                   400
  Average floor (per Mcf)                                      $ 4.44
  Average ceiling (per Mcf)                                     $5.50

Effective tax rate                                                 35%

Diluted computation :
  Basic weighted average shares                                13,300
  Dilutive impact of stock options and warrants                   300
  Dilutive impact of conv. preferred stock                      1,366
                                                              -------
Diluted weighted average shares                                14,966

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.