8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report

November 2, 2011

 (Date of earliest event reported)

Callon Petroleum Company

(Exact name of registrant as specified in its charter)

Delaware	001-14039	64-0844345
(State or other jurisdiction of	(Commission File Number)	(I.R.S. Employer
incorporation or organization)		Identification Number)

200 North Canal St.

Natchez, Mississippi  39120

(Address of principal executive offices, including zip code)

(601) 442-1601

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 — Financial Information

Item 2.02.  Results of Operations and Financial Condition

The following information, including Exhibits 99.1 and 99.2, is being furnished pursuant to Item 2.02 “Results of Operations and Financial Condition,” not filed, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  This information shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities  Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

On November 2, 2011, Callon Petroleum Company issued the press release attached as Exhibit 99.1 providing information regarding the company’s operating results for the quarter and nine-month period ended September 30, 2011.

As disclosed in a press release dated October 24, 2011 attached as Exhibit 99.2, Callon Petroleum Company announced that its conference call reporting third quarter 2011 results would be held on November 3, 2011 beginning at 10:00 a.m. Central Standard Time.

Section 7 — Regulation FD

Item 7.01.  Regulation FD Disclosure

The following information, including Exhibit 99.3, is being furnished pursuant to Item 7.01 “Regulation FD Disclosure,” not filed, for purposes of Section 18 of the Exchange Act.  This information shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

On November 2, 2011, Callon Petroleum Company issued the press release attached as Exhibit 99.3 announcing guidance for the full year of 2011.

Section 9 — Financial Statements and Exhibits

Item 9.01.  Financial Statements and Exhibits

(c)  Exhibits

Exhibit Number                                       Title of Document                                           

99.1 Press release dated November 2, 2011 providing information regarding Callon Petroleum Company’s operating results for the quarter and nine-month period ended September 30, 2011.

99.2 Press release dated October 24, 2011 announcing Callon Petroleum Company’s conference call reporting third quarter 2011 results.

99.3 Press release dated November 2, 2011 announcing guidance for the full year of 2011.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Callon Petroleum Company

November 3, 2011                                                                           By:    /s/ B. F. Weatherly

B. F. Weatherly

        Executive Vice President and

Chief Financial Officer

Exhibit Index

Exhibit Number                                       Title of Document                                           

99.1 Press release dated November 2, 2011 providing information regarding Callon Petroleum Company’s operating results for the quarter and nine-month period ended September 30, 2011.

99.2 Press release dated October 24, 2011 announcing Callon Petroleum Company’s conference call reporting third quarter 2011 results.

99.3 Press release dated August 8, 2011 announcing guidance for the third quarter and full year of 2011.

EX-99.1

EXHIBIT 99.1

For further information contact

Rodger W. Smith, 1-800-451-1294

FOR IMMEDIATE RELEASE

Callon Petroleum Company Reports Results

For Third Quarter, First Nine Months of 2011

Third Quarter Discretionary Cash Flow Rises 150% to $20 Million

Natchez, MS (November 2, 2011)—Callon Petroleum Company (NYSE: CPE) today reported net income of $8.4 million, or $0.21 per fully diluted share, for the third quarter, and $32.4 million, or $0.85 per fully diluted share, for the nine-month period ended September 30, 2011.  This compares with net income of $1.6 million, or $0.05 per fully diluted share, during the third quarter, and $7.7 million, or $0.26 per fully diluted share, for the nine-month period ended September 30, 2010.

Third Quarter and Nine-Month Highlights

· Increased crude oil revenues by 75%, or $11.4 million, to $26.5 million for the three months ended September 30, 2011, compared to revenues of $15.1 million for the same period of 2010.

· Increased natural gas revenues to $7.0 million for the three months ended September 30, 2011 which is an increase of 31%, or $1.6 million, as compared to gas revenues of $5.4 million for the same period of 2010.

· Increased average total production to 5,261 barrels of oil equivalent per day in the third quarter of 2011, representing an increase of 23% over the same period of 2010.

"We continue to see meaningful results from the successful execution of our onshore initiative which resulted in year-over-year production growth of 23% in the third quarter," Fred Callon, Chairman and Chief Executive Officer, explains. "In particular, our aggressive development program in the Permian Basin continues to pay strong dividends.  Since year-end 2010, we have increased net daily production from our Permian assets by 135% and have a multi-year inventory of potential drilling locations.   Due to the attractive economics of this oil-biased asset, we’ve allocated additional resources and capital to the profitable exploitation of these drilling opportunities and increasing our average daily production of crude oil to 56% of Callon’s total production.

Callon continued: "Our deepwater offshore fields continue to deliver positive results with minimal reinvestment requirements, generating free cash flow for reinvestment into onshore growth opportunities. We remain committed to the transformation of our asset base and believe the robust cash flow from our deepwater properties will continue to provide a strong source of funding for this change.  Planned incremental recompletions and step-out opportunities at our two deepwater assets will leverage existing infrastructure. Importantly, approximately 70% of our offshore production is crude oil and has recently benefited from premium pricing relative to West Texas Intermediate crude oil benchmark pricing.”

Callon Petroleum ended the third quarter with long-term debt approximately 24% lower than at year-end 2010.  Moreover, the company enjoys a strong liquidity position with $48 million in cash and an additional availability of $45 million on its revolving credit facility that is available to pursue growth initiatives.

Third Quarter and Nine Months 2011 Operating Results.  Operating results for the three months ended September 30, 2011 include oil and gas sales of $33.6 million from average production of 5.3 thousand barrels of oil equivalent per day (Mboe/d).  This corresponds to sales of $20.5 million from average production of 4.3 Mboe/d during the comparable 2010 period.The average realized prices per barrel of oil (Bbl) and per thousand cubic feet of natural gas (Mcf) for quarter ended September 30, 2011 were $98.27 and $5.46, respectively, representing an increase over the average realized prices of $72.47 and $4.84, respectively, for the same quarter of 2010.  On an equivalent basis, the average realized price of $69.31 received during the third quarter of 2011 increased approximately 33% over the average realized price of $52.10 for the corresponding quarter of 2010.

Oil and gas sales for the first nine months of 2011 totaled $95.8 million from average production of 5.2 Mboe/d.  This corresponds to sales of $65.4 million from average production of 4.4 Mboe/d during the same period in 2010.  The average realized prices per barrel of oil (Bbl) and per thousand cubic feet of natural gas (Mcf) for nine months ended September 30, 2011 were $99.82 and $5.33, respectively, representing an increase over the average realized prices of $73.78 and $5.29, respectively, for the same quarter of 2010.  On an equivalent basis, the average realized price of $67.75 received year-to-date during 2011 has increased approximately 25% over the average realized price of $54.27 for the corresponding nine months of 2010.

Third Quarter and Nine Months 2011 Discretionary Cash Flow. Discretionary cash flow for the quarter ended September 30, 2011 totaled $20.0 million compared to $8.1 million during the comparable prior year period.  Net cash flow provided by operating activities, as defined by U.S. GAAP, totaled $27.0 million and $8.2 million during the quarters ended September 30, 2011 and 2010, respectively.  Discretionary cash flow for the nine months ended September 30, 2011 and 2010 totaled $57.0 million and $29.9 million, respectively.  Net cash flow provided by operating activities, as defined by U.S. GAAP, totaled $57.9 million and $82.2 million for the nine-month periods ended September 30, 2011 and 2010, respectively. Cash flows from operations in the first nine months of 2010 included a $44.8 million recoupment of royalties paid to the Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEMRE”; formerly the Minerals Management Service), and related interest of $7.9 million.  Excluding this $52.7 million related to the BOEMRE royalty recoupment, cash flow provided by operating activities was $29.5 million.  (See “Non-GAAP Financial Measure” that follows and the accompanying reconciliation of discretionary cash flow, a non-GAAP measure, to net cash flow provided by operating activities.)

Liquidity and Capital Resources. There were no borrowings on the company's revolving credit facility at September 30, 2011. The credit facility has a borrowing base of $45.0 million, which is currently being reviewed consistent with the bi-annual redetermination process. Cash was $48.2 million at September 30, 2011.

Capital expenditures in the first nine months of 2011 were $74.4 million, which included $9.0 million of capitalized interest and general and administrative costs. The company's capital plan calls for investing $107.0 million, with approximately $82.0 million targeted to drilling additional oil wells and associated infrastructure in the onshore Permian Basin.

“Our onshore development program is moving forward as planned,” Callon concludes, “while at the same time, our offshore properties are continuing to deliver positive results.  As we move through the fourth quarter, we’ll continue to exercise a disciplined growth strategy that high-grades projects and determines capital allocation decisions based on their internal rates of return so that we maximize per-share returns for our shareholders.”

Non-GAAP Financial Measure - This news release refers to a non-GAAP financial measure as “discretionary cash flow.” Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and gas exploration and production company’s ability to internally fund exploration and development activities and to service or incur additional debt.  The company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow should not be considered an alternative to net cash provided by operating activities or net income as defined by U.S. GAAP.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011		2010		Change		2011		2010		Change
Discretionary cash flow	$	19,989	$	8,108	$	11,881	$	56,996	$	29,872	$	27,124
Net working capital changes and other changes		6,982		132		6,850		933		52,372		(51,439	)
Net cash flow provided by operating activities	$	26,971	$	8,240	$	18,731	$	57,929	$	82,244	$	(24,315	)

Callon Petroleum Company Consolidated Balance Sheets (in thousands, except share data)
	September 30, 2011			December 31, 2010
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	48,234		$	17,436
Accounts receivable		15,786			10,728
Fair market value of derivatives		8,338			-
Other current assets		1,744			2,180
Total current assets		74,102			30,344
Oil and gas properties, full-cost accounting method:
Evaluated properties		1,388,501			1,316,677
Less accumulated depreciation, depletion and amortization		(1,195,371	)		(1,155,915	)
Net oil and gas properties		193,130			160,762
Unevaluated properties excluded from amortization		7,811			8,106
Total oil and gas properties		200,941			168,868
Other property and equipment, net		10,716			3,370
Restricted investments		3,750			4,044
Investment in Medusa Spar LLC		9,914			10,424
Other assets, net		3,395			1,276
Total assets	$	302,818		$	218,326
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	24,335		$	17,702
Asset retirement obligations		1,372			2,822
Fair market value of derivatives		-			937
Total current liabilities		25,707			21,461
13% Senior Notes due 2016
Principal outstanding		106,961			137,961
Deferred credit, net of accumulated amortization of $12,329 and $3,964, respectively		19,178			27,543
Total 13% Senior Notes		126,139			165,504
Asset retirement obligations		12,565			13,103
Other long-term liabilities		2,910			2,448
Total liabilities		167,321			202,516
Stockholders' equity:
Preferred Stock, $.01 par value, 2,500,000 shares authorized;		-			-
Common Stock, $.01 par value, 60,000,000 shares authorized; 39,381,693 and 28,984,125 shares outstanding at September 30, 2011 and December 31, 2010, respectively		394			290
Capital in excess of par value		323,693			248,160
Other comprehensive income (loss)		3,027			(8,560	)
Retained earnings (deficit)		(191,617	)		(224,080	)
Total stockholders' equity		135,497			15,810
Total liabilities and stockholders' equity	$	302,818		$	218,326

Callon Petroleum Company

Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2011			2010		2011			2010
Operating revenues:
Oil sales	$	26,537		$	15,123	$	74,428		$	47,687
Gas sales		7,013			5,362		21,404			17,752
Total operating revenues		33,550			20,485		95,832			65,439
Operating expenses:
Lease operating expenses		5,980			4,327		16,324			13,006
Depreciation, depletion and amortization		13,013			7,392		35,741			21,247
General and administrative		3,464			3,371		11,487			12,086
Accretion expense		569			601		1,767			1,803
Acquisition expense		-			139		-			139
Total operating expenses		23,026			15,830		65,319			48,281
Income from operations		10,524			4,655		30,513			17,158
Other (income) expenses:
Interest expense		2,722			3,133		8,912			9,925
(Gain) loss on early extinguishment of debt		-			-		(1,942	)		339
Gain on acquired assets (See Note 10)		-			-		(3,688	)		-
Gain on sale of acquired assets		(217	)		-		(217	)		-
Loss on impairment of acquired assets		171			-		171			-
Other (income) expense		(347	)		63		(599	)		(409	)
Total other (income) expenses		2,329			3,196		2,637			9,855
Income before income taxes		8,195			1,459		27,876			7,303
Income tax benefit		-			-		(3,972	)		-
Income before equity in earnings of Medusa Spar LLC		8,195			1,459		31,848			7,303
Equity in earnings of Medusa Spar LLC		211			143		597			352
Net income available to common shares	$	8,406		$	1,602	$	32,445		$	7,655
Net income per common share:
Basic	$	0.21		$	0.06	$	0.87		$	0.27
Diluted	$	0.21		$	0.05	$	0.85		$	0.26

Callon Petroleum Company Consolidated Statements of Cash Flows (Unaudited) (in thousands)
	Nine months Ended September 30,
	2011			2010
Cash flows from operating activities:
Net income	$	32,445		$	7,655
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation, depletion and amortization		36,501			21,860
Accretion expense		1,767			1,803
Gain on acquired assets		(3,688	)		-
Amortization of non-cash debt related items		338			305
Amortization of deferred credit		(2,361	)		(2,723	)
Non-cash (gain) loss on early extinguishment of debt		(1,942	)		179
Equity in earnings of Medusa Spar LLC		(597	)		(352	)
Deferred income tax expense		10,696			2,455
Deferred income tax asset valuation allowance		(14,668	)		(2,455	)
Non-cash derivative income due to hedge ineffectiveness		(189	)		-
Non-cash charge related to compensation plans		1,122			2,356
Payments to settle asset retirement obligations		(2,428	)		(1,211	)
Changes in current assets and liabilities
Accounts receivable		(5,280	)		54,593
Other current assets		37			(1,462	)
Current liabilities		6,334			(134	)
Change in gas balancing receivable		198			370
Change in gas balancing payable		(29	)		(292	)
Change in other long-term liabilities		100			(115	)
Change in other assets, net		(427	)		(588	)
Cash provided by operating activities		57,929			82,244
Cash flows from investing activities:
Capital expenditures		(74,388	)		(39,617	)
Acquisition expenditures		-			(995	)
Investment in restricted assets for plugging and abandonment		(112	)		(337	)
Proceeds from sale of mineral interest and equipment		7,559			-
Distribution from Medusa Spar LLC		1,107			1,224
Cash used in investing activities		(65,834	)		(39,725	)
Cash flows from financing activities:
Payments on senior secured credit facility		-			(10,000	)
Redemption of remaining 9.75% senior notes		-			(16,052	)
Redemption of 13% senior notes		(35,062	)		-
Proceeds from exercise of employee stock options		-			(41	)
Issuance of common stock		73,765			-
Cash provided by (used in) financing activities		38,703			(26,093	)
Net change in cash and cash equivalents		30,798			16,426
Cash and cash equivalents:
Balance, beginning of period		17,436			3,635
Less: Cash held by subsidiary deconsolidated at January 1, 2010		-			(311	)
Balance, end of period	$	48,234		$	19,750

The following tables set forth certain unaudited operating information with respect to the Company's oil and gas operations for the periods indicated:

Callon Petroleum Company Operating Information (Unaudited)
	Three Months Ended September 30,
	2011			2010			Change			% Change
Net production:
Oil (MBbls)		270			209			61			29	%
Gas (MMcf)		1,284			1,107			177			16	%
Total production (Mboe)		484			393			91			23	%
Average daily production (Boe)		5,261			4,274			987			23	%
Average realized sales price (a):
Oil (Bbl)	$	98.27		$	72.47		$	25.80			36	%
Gas (Mcf)		5.46			4.84			0.62			13	%
Total (Boe)		69.31			52.10			17.21			33	%
Oil and gas revenues (in thousands):
Oil revenue	$	26,537		$	15,123		$	11,414			76	%
Gas revenue		7,013			5,362			1,651			31	%
Total	$	33,550		$	20,485		$	13,065			64	%
Additional per Boe data:
Sales price	$	69.31		$	52.10		$	17.21			33	%
Lease operating expense		(12.35	)		(11.00	)		(1.35	)		(12	) %
Operating margin	$	56.96		$	41.10		$	15.86			39	%
Other expenses per Boe:
Depletion, depreciation and amortization	$	26.88		$	18.80		$	8.08			43	%
General and administrative	$	7.16		$	8.57		$	(1.41	)		(16	)%
(a) Below is a reconciliation of the average NYMEX price to the average realized sales price:
Average NYMEX price per barrel of oil	$	89.78		$	76.23		$	13.55			18	%
Basis differential and quality adjustments		9.10			(2.62	)		11.72		nm
Transportation		(0.94	)		(1.14	)		0.20			(18	)%
Hedging		0.33			-			0.33			100	%
Average realized price per barrel of oil	$	98.27		$	72.47		$	25.80			36	%
Average NYMEX price per Mcf of natural gas	$	4.29		$	4.24		$	0.05			1	%
Basis differential and quality adjustments		1.17			0.49			0.68			139	%
Hedging		-			0.11			(0.11	)		100	%
Average realized price per Mcf of natural gas	$	5.46		$	4.84		$	0.62			13	%
nm – Not Meaningful

	Nine Months Ended September 30,
	2011			2010			Change			% Change
Net production:
Oil (MBbls)		746			646			100			15	%
Gas (MMcf)		4,014			3,359			655			19	%
Total production (Mboe)		1,415			1,206			209			17	%
Average daily production (Boe)		5,182			4,417			765			17	%
Average realized sales price (a):
Oil (Bbl)	$	99.82		$	73.78		$	26.04			35	%
Gas (Mcf)		5.33			5.29			0.04			1	%
Total (Boe)		67.75			54.27			13.48			25	%
Oil and gas revenues (in thousands):
Oil revenue	$	74,428		$	47,687		$	26,741			56	%
Gas revenue		21,404			17,752			3,652			21	%
Total	$	95,832		$	65,439		$	30,393			46	%
Additional per Boe data:
Sales price	$	67.75		$	54.27		$	13.48			25	%
Lease operating expense		(11.54	)		(10.79	)		(0.75	)		(7	) %
Operating margin	$	56.21		$	43.48		$	12.73			29	%
Other expenses per Boe:
Depletion, depreciation and amortization	$	25.27		$	17.62		$	7.65			43	%
General and administrative	$	8.12		$	10.02		$	(1.90	)		(19	)%
(a) Below is a reconciliation of the average NYMEX price to the average realized sales price:
Average NYMEX price per barrel of oil	$	95.48		$	77.65		$	17.83			23	%
Basis differential and quality adjustments		5.84			(2.70	)		8.54		nm
Transportation		(1.02	)		(1.18	)		0.16			(14	)%
Hedging		(0.48	)		0.01			(0.49	)	nm
Average realized price per barrel of oil	$	99.82		$	73.78		$	26.04			35	%
Average NYMEX price per Mcf of natural gas	$	4.29		$	4.54		$	(0.25	)		(6	)%
Basis differential and quality adjustments		1.04			0.64			0.40			63	%
Hedging		-			0.11			(0.11	)		(100	)%
Average realized price per Mcf of natural gas	$	5.33		$	5.29		$	0.04			1	%
nm – Not Meaningful

 Callon Petroleum Company is engaged in the acquisition, development, exploration and operation of oil and gas properties in Louisiana, Texas, and the offshore waters of the Gulf of Mexico.

 This news release is posted on the company’s website at www.callon.com and will be archived there for subsequent review.  It can be accessed from the “News Releases” tab at the top of the homepage.

 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 and quarterly reports on Form 10-Q, available on our website or the SEC’s website at www.sec.gov.

#

EX-99.2

EXHIBIT 99.2

For further information contact

Terry Trovato, 1-800-451-1294

FOR IMMEDIATE RELEASE

Callon Petroleum Company Announces Third Quarter 2011

Reporting Date and Conference Call

 Natchez, MS (October 24, 2011)--Callon Petroleum Company (NYSE: CPE) today announced its third quarter 2011 results of operations will be released on Wednesday afternoon, November 2, 2011.  A conference call discussing the results and current activity is scheduled for 10 a.m. Central Daylight Time Thursday, November 3, 2011.

 The conference call may be accessed live over the internet through the Events and Presentations Section of the company’s website at www.callon.com, and will be archived there for subsequent review.

 In addition, a telephone recording of the conference call will be available from noon November 3 until noon November 4 Central Daylight Time, and may be accessed by dialing 1-800-633-8284 and entering Reservation Number 21543788.

 Callon Petroleum Company is engaged in the acquisition, development, exploration and operation of oil and gas properties in Louisiana, Texas, 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.

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EX-99.3

EXHIBIT 99.3

For further information contact

Rodger W. Smith   1-800-451-1294

FOR IMMEDIATE RELEASE

Callon Petroleum Company Issues Guidance

For Full Year 2011

Natchez, MS (November 2, 2011)—Callon Petroleum Company (NYSE: CPE) is issuing guidance for the full year 2011, which includes confirmation of previously issued production guidance for the 12-month period.   The guidance, found in the table below, is expressed in ranges for the detailed components.

Full Year 2011

Guidance Estimates

(In thousands, except per production unit amounts)

	Guidance for Full Year 2011
Estimated production volumes:
Natural gas (Bcf)		5.2 – 5.4
Crude oil (Mbo)		995 – 1,070
Boe/d		5,100 – 5,400
Lease operating expenses:
Cash	$	21,000 -- $23,000
Non-cash		0000 ---00000 0
Total	$	21,000 -- $23,000
General and administrative expenses:
Cash	$	11,200 -- $11,700
Non-cash		4,000 -- 5,000
Total	$	15,200 -- $16,700
Interest expense:
Cash	$	13,600 -- $15,000
Non-cash		(2,600) --   ( 3,000)
Total	$	11,000 -- $12,000
Medusa Spar LLC, net of tax	$	800 -- $ 900
DD & A – Per BOE	$	24.50 -- $ 27.00
Accretion expense	$	2,300 -- $ 2,500
Income tax rate		0%
Cash income tax rate		0%

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.

Listed below are the outstanding hedges for crude oil for the remainder of 2011 shown in volumes.

		12/31/11
Crude Oil Collars	Volume (Mbo)		30
	Ceiling	$	101.85
	Floor	$	75.00
Crude Oil Collars	Volume (Mbo)		15
	Ceiling	$	102.00
	Floor	$	80.00
Crude Oil Collars	Volume (Mbo)		30
	Ceiling	$	94.50
	Floor	$	75.00
Crude Oil Collars	Volume (Mbo)		45
	Ceiling	$	122.00
	Floor	$	90.00

Callon Petroleum Company is engaged in the acquisition, development, exploration and operation of oil and gas properties in Texas, Louisiana and the offshore waters of the Gulf of Mexico.

This news release is posted on the company’s website at www.callon.com and will be archived there for subsequent review.  It can be accessed from the “News Releases” tab at the top of the homepage.

This news release contains projections and other forward-looking statements (including statements about fiscal full-year financial and operating performance) 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 and industry 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;

· our ability to restructure our indebtedness, including the results of our exchange offer; and

· the risk factors discussed in our filings with the Securities and Exchange Commission, including but not limited to those in our Annual Report for the year ended December 31, 2010 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 transactions and may engage in one or more of these types of transactions without prior notice.

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