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 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 November 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 nine months ended September 30, 2006.

     As disclosed in a press release dated November 1, 2006 attached as Exhibit 99.2, Callon Petroleum Company announced that its conference call reporting third quarter 2006 results would be held on November 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 November 7, 2006, Callon Petroleum Company issued the press release attached as Exhibit 99.3 announcing guidance for the fourth 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 November 7, 2006 providing information regarding Callon Petroleum Company’s operating results for the quarter and nine months ended September 30, 2006.
99.2	Press release dated November 1, 2006 announcing Callon Petroleum Company’s conference call reporting third quarter 2006 results.
99.3	Press release dated November 7, 2006 announcing guidance for the fourth 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
November 8, 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 November 7, 2006 providing information regarding Callon Petroleum Company’s operating results for the quarter and nine months ended September 30, 2006.
99.2	Press release dated November 1, 2006 announcing Callon Petroleum Company’s conference call reporting third quarter 2006 results.
99.3	Press release dated November 7, 2006 announcing guidance for the fourth 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 Results
      For Third Quarter, First Nine Months of 2006

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

     Third Quarter 2006 Net Income. For the three months ended September 30, 2006, Callon reported net income of $9.6 million, or $0.45 per diluted share. This compares with net income of $3.7 million, or $0.17 per diluted share during the same period of last year, which included charges of $3.8 million, or $0.11 per diluted share, for ineffective derivatives in accordance with SFAS No.133, related to production downtime because of tropical storm and hurricane activity.

     Third Quarter 2006 Operating Results. Oil and gas sales totaled $44.9 million from production of 54.3 million cubic feet of natural gas equivalent per day (MMcfe/d). This corresponds to sales of $31.7 million from production of 41.3 MMcfe/d during the same period in 2005 which was negatively impacted by tropical storm and hurricane activity. The average price, after the impact of hedging, received per thousand cubic feet of natural gas in the third quarter of 2006 decreased to $7.79 compared to $9.32 during the third quarter of 2005, while the average price, after the impact of hedging, received per barrel of oil in the third quarter of 2006 increased to $62.31 compared to $46.16 during the same period a year earlier.

     Nine Months 2006 Net Income. For the nine months ended September 30, 2006, the company reported net income of $34.7 million, or $1.64 per diluted share. This compares to net income of $22.5 million, or $1.09 per share on a diluted basis, for the same period in 2005.

     Nine Months 2006 Operating Results. Operating results for the nine-month period ended September 30, 2006 include oil and gas sales of $137.5 million from average production of 56.0 MMcfe/d. This corresponds to sales of $116.4 million from average daily production of 59.5 MMcfe/d during the same period in 2005. The average price, after the impact of hedging, received per thousand cubic feet of natural gas for the nine-month period ended September 30, 2006 increased to $8.20 compared to $7.65 during the first nine months in 2005, while the average price, after the impact of hedging, received per barrel of oil increased to $58.33 compared to $41.01 during the same period a year earlier.

     Third Quarter 2006 Discretionary Cash Flow. Discretionary cash flow totaled $31.2 million compared to $20.0 million during the same period of the previous year. Net cash flow provided by operating activities, as defined by GAAP, totaled $31.4 million and $32.5 million during the three-month periods ended September 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.)

     Nine Months 2006 Discretionary Cash Flow. Discretionary cash flow totaled $100.1 million compared to $81.9 million during the first nine months of the previous year. Net cash flow provided by operating activities, as defined by GAAP, totaled $106.7 million and $86.1 million during the nine-month periods ended September 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:	Three Months Ended				Nine Months Ended
(In thousands)	September 30,				September 30,
	2006		2005		2006		2005
Discretionary cash flow	$	31,230	$	20,035	$	100,110	$	81,873
Net working capital changes and other changes		151		12,503		6,613		4,218
Net cash flow provided by operating activities	$	31,381	$	32,538	$	106,723	$	86,091

Consolidated Condensed Balance Sheets:
(In thousands)

(Unaudited)	September 30,		December 31,
	2006		2005
Current assets	$	50,607	$	69,527
Oil and gas properties, net		521,368		447,364
All other assets		26,903		16,885
Total assets	$	598,878	$	533,776
Current liabilities	$	50,936	$	63,214
Long-term debt		202,075	$	188,813
All other liabilities		69,041		53,701
Stockholders’ equity		276,826		228,048
Total liabilities and stockholders’ equity	$	598,878	$	533,776

Production and Price Information:	Three Months						Nine Months
	Ended						Ended
	September 30,						September 30,
	2006			2005			2006			2005
Production:
Oil (MBbls)		381			382			1,340			1,613
Gas (MMcf)		2,710			1,510			7,241			6,570
Gas equivalent (MMcfe)		4,998			3,804			15,278			16,246
Average daily (MMcfe)		54.3			41.3			56.0			59.5
Average prices:
Oil ($/Bbl) (a)	$	62.31		$	46.16		$	58.33		$	41.01
Gas ($/Mcf)	$	7.79		$	9.32		$	8.20		$	7.65
Gas equivalent ($/Mcfe)	$	8.98		$	8.34		$	9.00		$	7.16
(a) Below is a reconciliation of the average NYMEX price to the average realized sales price per barrel of oil:
Average NYMEX oil price	$	70.51		$	63.19		$	68.23		$	55.40
Basis differentials and quality adjustments		( 6.91	)		( 6.98	)		( 7.81	)		( 8.04	)
Transportation		( 1.29	)		( 1.25	)		( 1.28	)		( 1.28	)
Hedging		—			( 8.80	)		( 0.81	)		( 5.07	)
Averaged realized oil price	$	62.31		$	46.16		$	58.33		$	41.01

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
Operating revenues:
Oil and gas sales	$	44,878		$	31,722		$	137,516		$	116,402
Operating expenses:
Lease operating expenses		8,070			5,649			21,340			18,382
Depreciation, depletion and amortization		14,973			9,313			43,600			38,392
General and administrative		2,908			1,598			6,558			6,093
Accretion expense		1,082			864			3,832			2,495
Derivative expense		30			5,606			150			6,518
Total operating expenses		27,063			23,030			75,480			71,880
Income from operations		17,815			8,692			62,036			44,522
Other (income) expenses:
Interest expense		4,027			4,050			12,303			12,884
Other (income)		(354	)		(352	)		(1,354	)		(650	)
Total other (income) expenses		3,673			3,698			10,949			12,234
Income before income taxes		14,142			4,994			51,087			32,288
Income tax expense		4,856			1,558			17,700			11,111
Income before Medusa Spar LLC		9,286			3,436			33,387			21,177
Income from Medusa Spar LLC net of tax		344			247			1,313			1,292
Net income		9,630			3,683			34,700			22,469
Preferred stock dividends		—			—			—			318
Net income available to common shares	$	9,630		$	3,683		$	34,700		$	22,151
Net income per common share:
Basic	$	0.47		$	0.19		$	1.74		$	1.23
Diluted	$	0.45		$	0.17		$	1.64		$	1.09
Shares used in computing net income:
Basic		20,650			19,132			19,919			17,998
Diluted		21,326			21,235			21,154			20,545

     Callon Petroleum Company is engaged in the exploration, development, acquisition and operation of oil and gas properties in the Gulf Coast region. The majority of Callon’s properties and operations are 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 Third Quarter 2006
      Reporting Date and Conference Call

     Natchez, MS (November 1, 2006)—Callon Petroleum Company (NYSE: CPE) today announced its third quarter 2006 results of operations will be released on Tuesday afternoon, November 7, 2006. A conference call discussing the results and current operational activity is scheduled for 10:00 a.m. Central Standard Time Wednesday, November 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 November 8 until noon November 9 Central Standard Time, and may be accessed by dialing 1-800-633-8284 and entering Reservation Number 21308521.

     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 Smith 1-800-451-1294

FOR IMMEDIATE RELEASE

      Callon Petroleum Company Issues Guidance
      For Fourth Quarter, Full-Year 2006

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

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

	Guidance for	Guidance for
	4th Quarter 2006	Full-Year 2006
Estimated production volumes:
Natural gas (Bcf)	3.3 -- 3.5	10.4 -- 10.7
Crude oil (Mbo)	230 -- 255	1,565 -- 1,595
MMcfe/d	51 -- 55	54 -- 56
Lease operating expenses:
Cash	$7,000 -- $8,000	$28,300 -- $29,300
Non-cash	--	--
Total	$7,000 -- $8,000	$28,300 -- $29,300
General and administrative expenses:
Cash	$1,900 -- $2,100	$6,500 -- $6,700
Non-cash	400 -- 500	2,400 -- 2,500
Total	$2,300 -- $2 ,600	$8,900 -- $9,200
Interest expense:
Cash	$3,300 -- $3,700	$14,000 -- $14,400
Non-cash	500 -- 600	2,200 -- 2,300
Total	$3,800 -- $4,300	$16,200 -- $16,700
Medusa Spar LLC, net of tax	$150 -- $200	$1,400 -- $1,500
DD & A — Oil and gas properties	$14,000 -- $15,700	$57,500 -- $59,500
Accretion expense	$1,100 -- $1,200	$4,900 -- $5,000
Derivative expense (income)	—	$150
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 for the remainder of 2006.

		12/31/06
Natural Gas
Collars	Volume (Mmcf)	—
	Ceiling	—
	Floor	—
Collars	Volume (Mmcf)		1,800
	Ceiling	$	9.30
	Floor	$	8.00
Collars	Volume (Mmcf)		900
	Ceiling	$	13.10
	Floor	$	7.00
Crude Oil
Collars	Volume (Mbo)		90
	Ceiling	$	77.10
	Floor	$	60.00
Collars	Volume (Mbo)		90
	Ceiling	$	81.75
	Floor	$	60.00

     Callon Petroleum Company is engaged in the exploration, development, acquisition and operation of oil and gas properties in the Gulf Coast region. The majority of Callon’s properties and operations are 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 fourth quarter and 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; 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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