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
August 7, 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))

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 August 7, 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 six months ended June 30, 2006.

     As disclosed in a press release dated July 25, 2006 attached as Exhibit 99.2, Callon Petroleum Company announced that its conference call reporting second quarter 2006 results would be held on August 8, 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 August 7, 2006, Callon Petroleum Company issued the press release attached as Exhibit 99.3 announcing guidance for the third 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 August 7, 2006 providing information regarding Callon Petroleum Company’s operating results for the quarter and six months ended June 30, 2006.
99.2	Press release dated July 25, 2006 announcing Callon Petroleum Company’s conference call reporting second quarter 2006 results.
99.3	Press release dated August 7, 2006 announcing guidance for third quarter and full year of 2006.

1

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
August 8, 2006	By:	/s/ Fred L. Callon
		Fred L. Callon
		President and Chief Executive Officer

2

Exhibit Index

Exhibit Number	Title of Document
99.1	Press release dated August 7, 2006 providing information regarding Callon Petroleum Company’s operating results for the quarter and six months ended June 30, 2006.
99.2	Press release dated July 25, 2006 announcing Callon Petroleum Company’s conference call reporting second quarter 2006 results.
99.3	Press release dated August 7, 2006 announcing guidance for the third quarter and full year of 2006.

3

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 Second Quarter, First Six Months of 2006

     Natchez, MS (August 7, 2006)—Callon Petroleum Company (NYSE: CPE) today reported results of operations for both the quarter and the six-month period ended June 30, 2006.

     Second Quarter 2006 Net Income. Net income for the quarter was $12.3 million, or $0.57 per diluted share. The company reported net income of $9.3 million, or $0.46 per share on a diluted basis, for the same period in 2005.

     Second Quarter 2006 Operating Results. Oil and gas sales totaled $47.1 million from average production of 58 million cubic feet of natural gas equivalent per day (MMcfe/d). This corresponds to sales of $41.7 million from average daily production of 64 MMcfe/d during the same period in 2005. During the second quarter of 2006, crude oil represented approximately 51% of the company’s total production. The average price realized per barrel of oil in the second quarter of 2006 increased to $59.99 compared to $41.53 during the same period in 2005, while the average price realized per thousand cubic feet of natural gas in the second quarter of 2006 increased to $7.93 compared to $7.43 during the same period a year earlier.

     Six Months 2006 Net Income. Net income increased to $25.1 million, or $1.17 per diluted share, compared to net income of $18.8 million, or $0.92 per share on a diluted basis, for the same period in 2005.

     Six Months 2006 Operating Results. Oil and gas sales totaled $92.6 million from average production of 57 MMcfe/d. This corresponds to sales of $84.7 million from average daily production of 69 MMcfe/d during the same period in 2005. Crude oil represented 56% of total production. The average price realized per barrel of oil increased to $56.74 compared to $39.41 during the same period in 2005, while the average price realized per thousand cubic feet of natural gas for the six-month period ended June 30, 2006 increased to $8.44 compared to $7.15 during the same period a year earlier.

     Second Quarter 2006 Discretionary Cash Flow. Discretionary cash flow increased by 15% to $35.1 million during the three-month period ended June 30, 2006 compared to $30.4 million for the same period in 2005. Net cash flow provided by operating activities, as defined by GAAP, totaled $34.3 million and $32.2 million during the three-month periods ended June 30, 2006 and 2005, respectively. (See “Non-GAAP Financial Measure” that follows and the accompanying reconciliation of discretionary cash flow to net cash flow provided by operating activities.)

     Six Months 2006 Discretionary Cash Flow. Discretionary cash flow totaled $68.9 million during the six-month period ended June 30, 2006 compared to $61.8 million for the same period in 2005. Net cash flow provided by operating activities, as defined by GAAP, totaled $75.3 million and $53.6 million during the six-month periods ended June 30, 2006 and 2005, respectively. (See “Non-GAAP Financial Measure” that follows and the accompanying reconciliation of discretionary cash flow 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.

Reconciliation of Non-GAAP Financial Measure:
(In thousands)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2006			2005		2006		2005
Discretionary cash flow	$	35,100		$	30,424	$	68,880	$	61,838
Net working capital changes and other changes		(774	)		1,798		6,462		(8,285	)
Net cash flow provided by operating activities	$	34,326		$	32,222	$	75,342	$	53,553

Consolidated Condensed Balance Sheets:
(In thousands)
(Unaudited)

	June 30,		December 31,
	2006		2005
Cash and cash equivalents	$	1,046	$	2,565
Oil and gas properties, net		501,924		447,364
All other assets		66,335		83,847
Total assets	$	569,305	$	533,776
Long-term debt excluding current maturities	$	196,641	$	188,813
All other liabilities		115,921		116,915
Stockholders’ equity		256,743		228,048
Total liabilities and stockholders’ equity	$	569,305	$	533,776

Production and Price Information:

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2006			2005			2006			2005
Production:
Oil (MBbls)		443			590			958			1,230
Gas (MMcf)		2,581			2,313			4,530			5,060
Gas equivalent (MMcfe)		5,239			5,850			10,281			12,443
Average daily (MMcfe)		57.6			64.3			56.8			68.7
Average realized prices:
Oil ($/Bbl) (a)	$	59.99		$	41.53		$	56.74		$	39.41
Gas ($/Mcf)	$	7.93		$	7.43		$	8.44		$	7.15
Gas equivalent ($/Mcfe)	$	8.98		$	7.12		$	9.01		$	6.81
(a) Below is a reconciliation of the average NYMEX price to the Average realized sales price per barrel of oil:
Average NYMEX oil price	$	70.70		$	53.17		$	67.09		$	51.51
Basis differentials and quality adjustments		( 7.83	)		( 7.37	)		( 7.93	)		( 6.89	)
Transportation		(1.29	)		( 1.28	)		( 1.28	)		( 1.30	)
Hedging		(1.59	)		( 2.99	)		( 1.14	)		( 3.91	)
Averaged realized oil price	$	59.99		$	41.53		$	56.74		$	39.41

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006			2005			2006			2005
Operating revenues:
Oil and gas sales	$	47,057		$	41,668		$	92,638		$	84,680
Operating expenses:
Lease operating expenses		7,365			6,197			13,270			12,733
Depreciation, depletion and amortization		14,791			13,671			28,627			29,079
General and administrative		1,924			2,801			3,650			4,495
Accretion expense		1,331			770			2,750			1,631
Derivative expense		30			533			120			912
Total operating expenses		25,441			23,972			48,417			48,850
Income from operations		21,616			17,696			44,221			35,830
Other (income) expenses:
Interest expense		4,128			4,265			8,276			8,834
Other (income)		(670	)		(96	)		(1,000	)		(298	)
Total other (income) expenses		3,458			4,169			7,276			8,536
Income before income taxes		18,158			13,527			36,945			27,294
Income tax expense		6,294			4,735			12,844			9,553
Income before Medusa Spar LLC		11,864			8,792			24,101			17,741
Income from Medusa Spar LLC net of tax		439			519			969			1,045
Net income		12,303			9,311			25,070			18,786
Preferred stock dividends		—			—			—			318
Net income available to common shares	$	12,303		$	9,311		$	25,070		$	18,468
Net income per common share:
Basic	$	0.61		$	0.52		$	1.26		$	1.04
Diluted	$	0.57		$	0.46		$	1.17		$	0.92
Shares used in computing net income:
Basic		20,314			17,736			19,855			17,703
Diluted		21,448			20,345			21,388			20,511

     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.

EX-99.2

EXHIBIT 99.2

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

FOR IMMEDIATE RELEASE

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

     Natchez, MS (July 25, 2006)—Callon Petroleum Company (NYSE: CPE) today announced its second quarter 2006 results of operations will be released on Monday afternoon, August 7, 2006. A conference call discussing the results and current operational activity is scheduled for 10:00 a.m. Central Daylight Time Tuesday, August 8, 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 August 8 until noon August 9 Central Daylight Time, and may be accessed by dialing 1-800-633-8284 and entering Reservation Number 21300446.

     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.

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 Third Quarter, Full-Year 2006

     Natchez, MS (August 7, 2006)—Callon Petroleum Company (NYSE: CPE) is issuing guidance for the third quarter and full-year 2006. The guidance, found in the table below, is expressed in ranges for the detailed components.

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

	Guidance for			Guidance for
	3rd Quarter 2006			Full-Year 2006
Estimated production volumes:
Natural gas (Bcf)	2.6 - 2.8			11.5 - 12.5
Crude oil (Mbo)	350 - 375			1,600 - 1,700
MMcfe/d	51 - 55			58 - 62
Lease operating expenses:
Cash	$7,500 - $8,500			$28,000 - $31,700
Non-cash		-			-
Total	$7,500 - $8,500			$28,000 - $31,700
General and administrative expenses:
Cash	$1,500 - $1,700			$6,100 - $6,400
Non-cash	500 - 600			1,700 - 1,900
Total	$2,000 - $2,300			$7,800 - $8,300
Interest expense:
Cash	$3,300 - $3,600			$14,000 - $14,700
Non-cash	500 - 600			2,100 - 2,300
Total	$3,800 - $4,200			$16,100 - $17,000
Medusa Spar LLC, net of tax	$300 - $400			$1,500 - $1,700
DD & A — Oil and gas properties	$13,400 - $14,800			$61,000 - $65,000
Accretion expense	$1,400 - $1,600			$5,600 - $5,900
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.

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

		For the Quarter Ended
		9/30/06		12/31/06
Natural Gas
Collars	Volume (Mmcf)		300	—
	Ceiling	$	10.30	—
	Floor	$	8.00	—
Collars	Volume (Mmcf)		1,800		1,800
	Ceiling	$	9.30	$	9.30
	Floor	$	8.00	$	8.00
Collars	Volume (Mmcf)	—			900
	Ceiling		—	$	13.10
	Floor		—	$	7.00
Crude Oil
Collars	Volume (Mbo)		90		90
	Ceiling	$	77.10	$	77.10
	Floor	$	60.00	$	60.00
Collars	Volume (Mbo)		90		90
	Ceiling	$	81.75	$	81.75
	Floor	$	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.