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
May 8, 2006
(Date of earliest event reported)

Callon Petroleum Company

(Exact name of registrant as specified in its charter)

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

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

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

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

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

TABLE OF CONTENTS

Section 2 — Financial Information
	Item 2.02. Results of Operations and Financial Condition
Section 7 — Regulation FD
	Item 7.01. Regulation FD Disclosure
Section 9 — Financial Statements and Exhibits
	Item 9.01. Financial Statements and Exhibits
SIGNATURES
Exhibit Index
Press Release dated May 8, 2006
Press Release dated May 3, 2006
Press Release dated May 8, 2006

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 May 8, 2006, Callon Petroleum Company issued the press release attached as Exhibit 99.1 providing information regarding the company’s operating results for the quarter and three months ended March 31, 2006.

     As disclosed in a press release dated May 3, 2006 attached as Exhibit 99.2, Callon Petroleum Company announced that its conference call reporting first quarter 2006 results would be held on May 9, 2006 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 May 8, 2006, Callon Petroleum Company issued the press release attached as Exhibit 99.3 announcing guidance for the second quarter and full year of 2006.

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 May 8, 2006 providing information regarding Callon Petroleum Company’s operating results for the quarter and three months ended March 31, 2006.
99.2	Press release dated May 3, 2006 announcing Callon Petroleum Company’s conference call reporting first quarter 2006 results.
99.3	Press release dated May 8, 2006 announcing guidance for second quarter and full year of 2006.

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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
May 9, 2006	By:	/s/ Fred L. Callon
		Fred L. Callon
		President and Chief Executive Officer

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Exhibit Index

Exhibit Number	Title of Document
99.1	Press release dated May 8, 2006 providing information regarding Callon Petroleum Company’s operating results for the quarter and three months ended March 31, 2006.
99.2	Press release dated May 3, 2006 announcing Callon Petroleum Company’s conference call reporting first quarter 2006 results.
99.3	Press release dated May 8, 2006 announcing guidance for the second quarter and full year of 2006.

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EX-99.1

EXHIBIT 99.1

For further information contact
Rodger W. Smith 1-800-451-1294

FOR IMMEDIATE RELEASE

     Callon Petroleum Company Reports
     First Quarter 2006 Results of Operations

     Natchez, MS (May 8, 2006)—Callon Petroleum Company (NYSE: CPE) today reported its results of operations for the three-month period ended March 31, 2006, including record net income.

     First Quarter 2006 Net Income. For the three-month period ended March 31, 2006, Callon reported net income of $12.7 million, or $0.60 per diluted share. For the first quarter of 2005, the company reported net income of $9.5 million, or $0.46 per diluted share.

     First Quarter 2006 Operating Results. Oil and gas sales totaled $45.6 million from average production of 56.0 million cubic feet of natural gas equivalent per day (MMcfe/d). This corresponds to sales of $43.0 million from average production of 73.3 MMcfe/d during the same period in 2005. During the first quarter of 2006, natural gas represented approximately 39 percent of the company’s total production. The average price realized per thousand cubic feet of natural gas in the first quarter of 2006 increased by 32 percent to $9.12 compared to $6.92 during the first quarter of 2005, while the average price realized per barrel of oil in the first quarter of 2005 increased by 44 percent to $53.95 compared to $37.46 during the same period in 2005.

     First Quarter 2006 Discretionary Cash Flow. For the quarter ended March 31, 2006, discretionary cash flow increased by 8 percent to $33.8 million compared to $31.4 million during the same three months of the previous year. Net cash flow provided by operating activities, as defined by GAAP, totaled $41.0 million and $21.3 million during the quarter ended March 31, 2006 and 2005, respectively. (See “Non-GAAP Financial Measure” that follows and the accompanying financial information for a reconciliation of discretionary cash flow, a non-GAAP measure, to net cash flow provided by operating activities.)

     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 GAAP.

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Reconciliation Of Non-GAAP Financial Measure:	Three Months Ended
(In thousands)	March 31,
	2006		2005
Discretionary cash flow	$	33,780	$	31,414
Net working capital changes and other changes		7,236		(10,083	)
Net cash flow provided by operating activities	$	41,016	$	21,331

Consolidated Condensed Balance Sheets:	March 31,		December 31,
(In thousands)	2006		2005
	(Unaudited)
Cash and cash equivalents	$	5,139	$	2,565
Oil and gas properties, net		487,392		447,364
All other assets		93,433		83,847
Total assets	$	585,964	$	533,776
Long-term debt excluding current maturities	$	194,218	$	188,813
All other liabilities		148,677		116,915
Stockholders’ equity		243,069		228,048
Total liabilities and stockholders’ equity	$	585,964	$	533,776

Production and Price Information:	Three Months Ended
	March 31,
	2006			2005
Production:
Oil (MBbls)		515			641
Gas (MMcf)		1,950			2,748
Total Production (MMcfe)		5,042			6,593
Average daily (MMcfe)		56.0			73.3
Average prices:
Oil ($/Bbl) (a)	$	53.95		$	37.46
Gas ($/Mcf)	$	9.12		$	6.92
Gas equivalent ($/Mcfe)	$	9.04		$	6.52
(a) Below is a reconciliation of the average NYMEX price to the average realized sales price per barrel of oil:
Average NYMEX oil price	$	63.48		$	49.85
Basis differentials and quality adjustments		(7.52	)		(6.33	)
Transportation		(1.27	)		(1.31	)
Hedging		(0.74	)		(4.75	)
Average realized oil price	$	53.95		$	37.46

Callon Petroleum Company
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share amounts)

	Three Months Ended
	March 31,
	2006			2005
Operating revenues:
Oil and gas sales	$	45,581		$	43,012
Operating expenses:
Lease operating expenses		5,905			6,536
Depreciation, depletion and amortization		13,836			15,408
General and administrative		1,726			1,694
Accretion expense		1,419			861
Derivative expense		90			379
Total operating expenses		22,976			24,878
Income from operations		22,605			18,134
Other (income) expenses:
Interest expense		4,148			4,569
Other income		(330	)		(202	)
Total other (income) expenses		3,818			4,367
Income before income taxes		18,787			13,767
Income tax expense		6,550			4,818
Income before Medusa Spar LLC		12,237			8,949
Income from Medusa Spar LLC, net of tax		530			526
Net income		12,767			9,475
Preferred stock dividends		—			318
Net income available to common shares	$	12,767		$	9,157
Net income per common share:
Basic	$	0.66		$	0.52
Diluted	$	0.60		$	0.46
Shares used in computing net income:
Basic		19,396			17,671
Diluted		21,329			20,678

     Callon Petroleum Company is engaged in the exploration, development, acquisition and operation of oil and gas properties primarily in the Gulf Coast region. Callon’s properties and operations are geographically concentrated in 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” link on the left side 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, available on our website or the SEC’s website at www.sec.gov.

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EX-99.2

EXHIBIT 99.2

For further information contact
Terry Trovato, 1-800-451-1294

FOR IMMEDIATE RELEASE

     Callon Petroleum Company Announces First Quarter 2006
     Reporting Date and Conference Call

     Natchez, MS (May 3, 2006)—Callon Petroleum Company (NYSE: CPE) today announced its first quarter 2006 results of operations will be released on Monday afternoon, May 8, 2006. A conference call discussing the results and current operational activity is scheduled for 10:00 a.m. Central Daylight Time Tuesday, May 9, 2006.

     The conference call may be accessed live over the internet through the 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 May 9 until noon May 10 Central Daylight Time, and may be accessed by dialing 1-800-633-8284 and entering Reservation Number 21291557.

     Callon Petroleum Company has been engaged in the exploration, development, acquisition and production of oil and gas in the Gulf Coast region since 1950. Callon’s properties and operations are geographically concentrated in the offshore waters of the Gulf of Mexico.

     This news release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The opinions, forecasts, projections or other statements, other than statements of historical fact, are forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Certain risks and uncertainties inherent in our businesses are set forth in our filings with the SEC. These risks and uncertainties include general economic conditions; the volatility of oil and natural gas prices; the uncertainty of estimates of oil and natural gas reserves; the 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; weather conditions; and other factors listed in the reports filed by us with the SEC. For additional information with respect to these and other factors, see our reports filed with the SEC. Our forward-looking statements speak only as of the date made, and we have no obligation to update these forward-looking statements.

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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 Second Quarter, Full-Year 2006

     Natchez, MS (May 8, 2006)—Callon Petroleum Company (NYSE: CPE) is issuing guidance for the second quarter and full-year 2006. The guidance, found in the table below, is expressed in ranges for the detailed components.

Second Quarter and Full-Year 2006
Guidance Estimates
(In thousands, except per production unit amounts)

	Guidance for	Guidance for
	2nd Quarter 2006	Full-Year 2006
Estimated production volumes:
Natural gas (Bcf)	3.2 - 3.3	16.0 - 17.0
Crude oil (Mbo)	415 - 435	1,625 - 1,750
MMcfe/d	62 - 65	70 - 75
Lease operating expenses:
Cash	$6,400 - $7,100	$28,700 - $31,700
Non-cash	—	—
Total	$6,400 - $7,100	$28,700 - $31,700
General and administrative expenses:
Cash	$1,600 - $1,800	$6,500 - $7,000
Non-cash	500 - 600	2,200 - 2,500
Total	$2,100 - $2,400	$8,700 - $9,500
Interest expense:
Cash	$3,100 - $3,450	$13,200 - $14,100
Non-cash	500 - 550	2,000 - 2,300
Total	$3,600 - $4,000	$15,200 - $16,400
Medusa Spar LLC, net of tax	$480 - $540	$1,750 - $1,900
DD & A — Oil and gas properties	$15,500 - $16,500	$70,000 - $75,000
Accretion expense	$1,400 - $1,600	$5,700 - $6,100
Amortization of premiums on derivative contracts	$30 - $35	$140 - $160
Accrual income tax rate	35%	35%
Cash income tax rate	0%	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.

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Listed below are the outstanding hedges for natural gas and crude oil by quarter for 2006.

		For the Quarter Ended
		6/30/06		9/30/06		12/31/06
Natural Gas
Collars	Volume (Mmcf)		—		—		—
	Ceiling		—		—		—
	Floor		—		—		—
Collars	Volume (Mmcf)		300		300		—
	Ceiling	$	10.40	$	10.30		—
	Floor	$	8.00	$	8.00		—
Collars	Volume (Mmcf)		1,800		1,800		1,800
	Ceiling	$	9.30	$	9.30	$	9.30
	Floor	$	8.00	$	8.00	$	8.00
Crude Oil
Swaps	Volume (Mbo)		45		—		—
	Strike Price	$	55.00		—		—
Collars	Volume (Mbo)		90		90		90
	Ceiling	$	77.10	$	77.10	$	77.10
	Floor	$	60.00	$	60.00	$	60.00
Collars	Volume (Mbo)		90		90		90
	Ceiling	$	81.75	$	81.75	$	81.75
	Floor	$	60.00	$	60.00	$	60.00

     Callon Petroleum Company is engaged in the exploration, development, acquisition and operation of oil and gas properties primarily in the Gulf Coast region. Callon’s properties and operations are geographically concentrated in 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” link on the left side of the homepage.

     This news release contains projections and other forward-looking statements (including statements about fiscal second-quarter and year-end 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; 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, 2005 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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