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 8, 2004
(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):

     [ ] 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

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition
	Item 9.01. Financial Statements and Exhibits
SIGNATURES
Exhibit Index
Press Release dated November 8, 2004
Press Release dated November 2, 2004
Press Release dated November 8, 2004

Item 2.02. Results of Operations and Financial Condition

     The following information 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, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

     On November 8, 2004, 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, 2004.

     As disclosed in a press release dated November 2, 2004 attached as Exhibit 99.2, the company announced that its conference call reporting third quarter 2004 results would be held on November 9, 2004 beginning at 10:00 a.m. Central Standard Time.

     On November 8, 2004, Callon Petroleum Company issued the press release attached as Exhibit 99.3 announcing guidance for the fourth quarter of 2004.

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 8, 2004 providing information regarding Callon Petroleum Company’s operating results for the quarter and nine months ended September 30, 2004.
99.2	Press release dated November 2, 2004 announcing Callon Petroleum Company’s conference call reporting third quarter 2004 results.
99.3	Press release dated November 8, 2004 announcing guidance for fourth quarter of 2004.

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
November 8, 2004	By:	s/s John S. Weatherly
		John S. Weatherly
		Senior Vice President and Chief Financial Officer

2

Exhibit Index

Exhibit Number	Title of Document
99.1	Press release dated November 8, 2004 providing information regarding Callon Petroleum Company’s operating results for the quarter and nine months ended September 30, 2004.
99.2	Press release dated November 2, 2004 announcing Callon Petroleum Company’s conference call reporting third quarter 2004 results.
99.3	Press release dated November 8, 2004 announcing guidance for the fourth quarter of 2004.

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EX-99.1

EXHIBIT 99.1

For further information contact
John S. Weatherly, CFO 1-800-451-1294

FOR IMMEDIATE RELEASE

     Callon Petroleum Company Reports Results
     For Third Quarter, First Nine Months of 2004

     Natchez, MS (November 8, 2004)—Callon Petroleum Company (NYSE: CPE/CPE.PrA) today reported results of operations for both the quarter and the nine-month period ended September 30, 2004.

     For the three-month period ended September 30, 2004, Callon reported net income of $546,000, or $0.01 per diluted share which included charges of $532,000, or $0.03 per diluted share, attributable to early extinguishment of debt and $731,000, or $0.04 per diluted share, for ineffective hedges in accordance with SFAS No. 133 as a result of Hurricane Ivan’s production interruption for the month of October 2004. The company reported a net loss of $2.0 million, or $0.17 per share on a diluted basis, for the same period in 2003.

     Operating results for the three-month period ended September 30, 2004 include a 67% increase in oil and gas sales to $25.1 million from average production of 50.6 million cubic feet of natural gas equivalent per day (MMcfe/d). This corresponds to sales of $15.1 million from average daily production of 33.3 MMcfe/d during the same period in 2003. On September 13, several of our fields were shut-in due to the approach of Hurricane Ivan. As a result of the adverse aftermath of that severe storm, the company had to defer production of approximately 9 million cubic feet of natural gas equivalent per day during the third quarter of 2004.

     The average price, after the impact of hedging, received per thousand cubic feet of natural gas in the third quarter of 2004 increased to $6.11 compared to $4.97 during the third quarter of 2003, while the average price, after the impact of hedging, received per barrel of oil in the third quarter of 2004 increased slightly to $27.83 compared to $26.76 during the same period a year earlier.

     For the nine months ended September 30, 2004, the company reported net income of $12.4 million, or $0.74 per diluted share. This compares to a net loss of $1.3 million, or $0.17 per share on a diluted basis, for the same period in 2003.

     Operating results for the nine-month period ended September 30, 2004 include a 73% increase in oil and gas sales to $94.7 million from average production of 62.2 million cubic feet of natural gas equivalent per day (MMcfe/d). This corresponds to sales of $54.8 million from average daily production of 37.4 MMcfe/d during the same period in 2003. The average price, after the impact of hedging, received per thousand cubic feet of natural gas for the nine-month period ended September 30, 2004 increased to $6.11 compared to $5.43 during the first nine months in 2003, while the average price, after the impact of hedging, received per barrel of oil increased slightly to $29.63 compared to $28.15 during the same period a year earlier.

     For the three months ended September 30, 2004, discretionary cash flow totaled $13.4 million compared to $6.0 million during the same period of the previous year. Net cash flow provided by operating activities, as defined by GAAP, totaled $14.9 million and $7.3 million during the three-month periods ended September 30, 2004 and 2003, respectively. (See “Non-GAAP Financial Measure” that follows and the accompanying reconciliation of discretionary cash flow to net cash flow provided by operating activities.)

     For the nine months ended September 30, 2004, discretionary cash flow totaled $56.9 million compared to $27.3 million during the first nine months of the previous year. Net cash flow provided by operating activities, as defined by GAAP, totaled $54.7 million and $31.2 million during the nine-month periods ended September 30, 2004 and 2003, 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 this measure is a financial indicator of the company’s ability to fund capital expenditures and service debt. Callon also believes this non-GAAP financial measure of cash flow is useful information to investors because it is widely used by professional research analysts in the valuation, comparison, rating and investment recommendations of companies within the oil and gas exploration and production industry. Many investors use the published research of these analysts in making their investment decisions. 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,
	2004		2003		2004			2003
Discretionary cash flow	$	13,407	$	6,007	$	56,931		$	27,278
Net working capital changes and other changes		1,498		1,317		(2,262	)		3,919
Net cash flow provided by operating activities	$	14,905	$	7,324	$	54,669		$	31,197

Consolidated Condensed Balance Sheets:
(In thousands)

	September 30,		December 31,
	2004		2003
	(Unaudited)
Cash and cash equivalents	$	6,821	$	8,700
Restricted cash		—		63,345
Oil and gas properties, net		397,071		390,163
All other assets		37,113		33,824
Total assets	$	441,005	$	496,032
Long-term debt excluding current maturities	$	187,080	$	214,885
All other liabilities		72,377		147,886
Stockholders’ equity		181,548		133,261
Total liabilities and stockholders’ equity	$	441,005	$	496,032

Production and Price Information:	Three Months				Nine Months
	Ended				Ended
	September 30,				September 30,
	2004		2003		2004		2003
Production:
Oil (MBbls)		376		49		1,354		140
Gas (MMcf)		2,405		2,772		8,924		9,365
Gas equivalent (MMcfe)		4,659		3,068		17,050		10,206
Average daily (MMcfe)		50.6		33.3		62.2		37.4
Average prices:
Oil ($/Bbl)	$	27.83	$	26.76	$	29.63	$	28.15
Gas ($/Mcf)	$	6.11	$	4.97	$	6.11	$	5.43
Gas equivalent ($/Mcfe)	$	5.40	$	4.92	$	5.55	$	5.37

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

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2004		2003			2004			2003
Operating revenues:
Oil and gas sales	$	25,138	$	15,082		$	94,663		$	54,759
Total operating revenues		25,138		15,082			94,663			54,759
Operating expenses:
Lease operating expenses		5,771		2,659			17,062			8,003
Depreciation, depletion and amortization		10,147		6,416			36,458			20,769
General and administrative		1,509		1,068			6,839			3,704
Accretion expense		825		772			2,555			2,214
Derivative expense (income)		1,519		(199	)		1,608			335
Total operating expenses		19,771		10,716			64,522			35,025
Income from operations		5,367		4,366			30,141			19,734
Other (income) expenses:
Interest expense		4,511		7,554			15,838			22,225
Other (income) expense		65		(70	)		(311	)		(226	)
Loss on early extinguishment of debt		532		—			3,004			—
Total other (income) expenses		5,108		7,484			18,531			21,999
Income (loss) before income taxes		259		(3,118	)		11,610			(2,265	)
Income tax expense (benefit)		—		(1,092	)		—			(793	)
Income (loss) before Medusa Spar LLC and cumulative effect of change in accounting principle		259		(2,026	)		11,610			(1,472	)
Income from Medusa Spar LLC, net of tax		287		—			768			—
Income (loss) before cumulative effect of change in accounting principle		546		(2,026	)		12,378			(1,472	)
Cumulative effect of change in accounting principle, net of tax		—		—			—			181
Net income (loss)		546		(2,026	)		12,378			(1,291	)
Preferred stock dividends		317		320			955			958
Net income (loss) available to common shares	$	229	$	(2,346	)	$	11,423		$	(2,249	)
Net income (loss) per common share:
Basic
Net income (loss) available to common before cumulative effect of change in accounting principle	$	0.01	$	(0.17	)	$	0.75		$	(0.18	)
Cumulative effect of change in accounting principle, net of tax		—		—			—			0.01
Net income (loss) available to common	$	0.01	$	(0.17	)	$	0.75		$	(0.17	)
Diluted
Net income (loss) available to common before cumulative effect of change in accounting principle	$	0.01	$	(0.17	)	$	0.74		$	(0.18	)
Cumulative effect of change in accounting principle, net of tax		—		—			—			0.01
Net income (loss) available to common	$	0.01	$	(0.17	)	$	0.74		$	(0.17	)
Shares used in computing net income:
Basic		17,552		13,679			15,192			13,640
Diluted		18,815		13,679			16,762			13,640

     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 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 include:

• general economic 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 those in our Annual Report for the year ended December 31, 2003 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 transaction and may engage in one or more of these types of transactions without prior notice.

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EX-99.2

EXHIBIT 99.2

For further information contact
John S. Weatherly, CFO 1-800-451-1294

FOR IMMEDIATE RELEASE

     Callon Petroleum Company to Webcast
     Third Quarter 2004 Results of Operations Conference Call

     Natchez, MS (November 2, 2004) — Callon Petroleum Company (NYSE: CPE/CPE.PrA) today announced that its conference call discussing third quarter 2004 results will be accessible live on the Internet. The call is scheduled for Tuesday, November 9, 2004 at 10 a.m. Central Standard Time. Third quarter 2004 results of operations will be released after market close the previous afternoon.

     To access the call log onto http://www.callon.com, click on the “Presentations” button on the left side of the homepage. Then click on the icon for “Webcast powered by CCBN.” Windows Media Player software is required to hear the call. It may be downloaded free by clicking on the icon “Get Windows Media Player.”

     Those unable to listen to the actual teleconference may access a recording of it at any time between Noon Tuesday and Noon Wednesday Central Standard Time. Dial 1-800-633-8284 and enter Reservation Number 21212492.

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

     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.

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EX-99.3

Exhibit 99.3

For further information contact
John S. Weatherly, CFO 1-800-451-1294

FOR IMMEDIATE RELEASE

     Callon Petroleum Company Issues Guidance
     For Fourth Quarter 2004

     Natchez, MS (November 8, 2004)—Callon Petroleum Company (NYSE: CPE/CPE.PrA) is issuing guidance for the fourth quarter of 2004. The guidance, found in the table below, is expressed in ranges for the detailed components.

	Guidance for
	4th Quarter 2004
Estimated production volumes:
Natural gas (Bcf)		2.5	-	2.7
Crude oil (Mbo)		350	-	390
MMcfe/d		50	-	55
Hedges outstanding:
Natural Gas Volumes Hedged — Thousand mmBtu		1,500
Natural Gas Average Floor — Price per mmBtu		$5.00
Natural Gas Average Ceiling — Price per mmBtu		$6.18
Crude Oil Volumes Hedged — Thousands of Barrels		330
Crude Oil Average Floor — Price per Barrel		$30.08
Crude Oil Average Ceiling — Price per Barrel		$31.35
Lease operating expenses:
Cash		$4,800	-	$5,300
Non-cash		--		--
Total		$4,800	-	$5,300
General and administrative expenses:
Cash		$930	-	$1,030
Non-cash		620	-	690
Total		$1,550	-	$1,720
Interest expense:
Cash		$3,500	-	$3,900
Non-cash		450	-	500
Total		$3,950	-	$4,400
Medusa Spar LLC, net of tax		$250	-	$280
DD & A — Oil and gas properties		$10,000	-	$11,000
Accretion expense		$800	-	$900
Accrual income tax rate		0%
Cash income tax rate		0%

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

     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.

     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 include:

• general economic 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, 2003 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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