Callon Reports Increased Deepwater Drilling Activity.

NATCHEZ, Miss.--(BUSINESS WIRE)--Dec. 16, 1999--

Callon Petroleum Company (NYSE:CPE) (NYSE:CPE.PrA) reported today on its near-term deepwater drilling activity.

Medusa Discovery, Mississippi Canyon Block 582 - A delineation well, testing the extent of the company's Medusa deepwater discovery, encountered 110 true vertical feet of pay in the T1 objective sand in Fault Block B. The original test well had encountered 59 true vertical feet of pay in the T1 objective in Fault Block A and 61 true vertical feet of pay in the T4 sand. Diamond Offshore's Ocean Concord drilled both wells.

The company currently is drilling an additional sidetrack well to test the downdip limits of the T1 pay sand in Fault Block B. This sidetrack well should reach total depth by year-end.

Medusa is the company's third consecutive deepwater discovery. Callon owns a 15 percent working interest. Murphy Oil Corporation (NYSE:MUR) is the operator and owns 60 percent; British-Borneo Petroleum, Inc. owns the remaining 25 percent.

Anvil Prospect, Mississippi Canyon Blocks 815/816 - Diamond Offshore's Ocean Victory spudded the initial exploratory well on December 9, 1999. The well should reach its primary objectives in February. Callon owns a 10 percent working interest. Vastar Resources, Inc. (NYSE:VRI) is the operator and owns a 60 percent working interest; Murphy owns the remaining 30 percent.

Chin Music Prospect, Mississippi Canyon Blocks 378/379 - The Amos Runner (Noble Drilling Company) is scheduled to spud the initial exploratory well during January 2000. Callon owns a 21.4 percent working interest. Murphy is the operator and owns 53.6 percent; Spinnaker Exploration Company (Nasdaq NMS:SPNX) owns the remaining 25 percent.

Boomslang Discovery, Ewing Bank Block 994 - The company recently completed an acquisition of an additional 20 percent working interest. Callon now owns 55 percent; the remaining 45 percent is owned by Murphy, which is the operator. A delineation well to extend this discovery is planned for late 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.

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.