Callon Petroleum Company Summarizes Increased Earnings, Successful Drilling Results.

Business Editors

NATCHEZ, Miss.--(BUSINESS WIRE)--Aug. 10, 2001

During the first half of this year Callon Petroleum Company (NYSE: CPE / CPE.PrA) more than doubled its earnings over the same period of the prior year and successfully drilled seven new wells in the Outer Continental Shelf. As these wells come online, the Company's daily production should increase significantly.

Fred L. Callon, president and chief executive officer, and John S. Weatherly, senior vice president and chief financial officer, provided comments regarding 2001 second quarter activities and guidance for the remainder of the year to the investment community during a conference call yesterday. The archived teleconference may be heard in its entirety until Friday, August 17 via a link on the company's website at www.callon.com.

Highlights of the discussion included:

-- Earnings for the first half of 2001 were more than double those of the first
half of last year. For the first half of 2001, net income was $9.6 million, or
$0.65 per diluted share. For last year, first half earnings totaled $4.3
million, or $0.26 per share.

-- In July, Callon announced the closing of $95 million of senior notes placed
with Duke Capital Partners. Both the size and term of this placement were
matched to the company's current needs. This financing, when combined with
projected cash flow, should be sufficient to fund the company's base capital
budgets for this year and next.

-- During 2001 to date the company has drilled a total of 12 wells on the Outer
Continental Shelf and seven were discoveries for a success rate of 58%.

-- At East Cameron Block 294 a discovery well encountered approximately 80 feet
of pay. Completion activities are underway and first production is anticipated
by November with an initial production rate of 15 million cubic feet of natural
gas equivalent per day (MMcfe/d). The company owns a 50% working interest.

-- At East Cameron Block 374 an initial test well encountered approximately 180
feet of natural gas pay in three intervals. The well will be tied back to an
offset platform with a sub-sea completion. The discovery set up an offset
prospect, which will be drilled during the fourth quarter. Production is
expected to begin in the first quarter of next year. The company owns a 50%
working interest in this block.

-- A test well at the Guadalupe Peak Prospect at East Cameron Block 257 came in
75 feet higher than anticipated with over 100 feet of pay. First production is
planned for October with initial production rates expected to be approximately
20 MMcfe/d. Callon owns a 50% working interest.

-- The company recently sidetracked its producing well at High Island Block
A-494. The sidetrack was successful and a second well was drilled to test the
same zone in an adjacent fault block. The second well had over 100 feet of pay.
Callon expects both wells to be online within 30-45 days at a combined rate of
approximately 15 MMcfe/d. The company owns a 50% working interest.

-- The construction of the SPAR floating production system for Callon's Medusa
discovery is proceeding according to schedule. Drilling of the development
wells began in June and will continue into next year. Upon completion, it is
estimated the facility will have the capacity to handle 40,000 barrels of crude
oil and 110 million cubic feet of natural gas (MMcf) per day, or approximately
50 MMcfe/d net to Callon's 15% working interest.

-- At the Company's Habanero discovery, Shell (the operator) has recently
announced that it should have a rig onsite within the next few weeks to begin
drilling a development well to test the updip limits of the reservoir.

-- Between now and the end of the year Callon anticipates drilling a total of
nine additional Shelf wells, eight of which will be operated by the company.

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 within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include those related to our future capital needs, future capital availability, and the timing and success of future development operations. These forward-looking 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. Such factors include prices of oil and gas, inaccuracies in predicting the timing of future operations, possible cost overruns, operational risks and other risks. These factors are discussed at length in Callon's annual report on Form 10-K for fiscal year 2000 filed with the SEC.