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 6, 2010

 (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 incorporation or organization)	(Commission File Number)	(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

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 6, 2010, Callon Petroleum Company issued the press release attached as Exhibit 99.1 providing information regarding the company’s operating results for the quarter ended March 31, 2010.

As disclosed in a press release dated April 28, 2010 attached as Exhibit 99.2, Callon Petroleum Company announced that its conference call reporting first quarter 2010 results would be held on May 7, 2010 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 6, 2010, Callon Petroleum Company issued the press release attached as Exhibit 99.3 announcing guidance for the second quarter and full year of 2010.

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 6, 2010 providing information regarding Callon Petroleum Company’s operating results for the quarter ended March 31, 2010.
99.2	Press release dated April 29, 2010 announcing Callon Petroleum Company’s conference call reporting first quarter 2010 results.
99.3	Press release dated May 6, 2010 announcing guidance for the second quarter and full year of 2010.

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
May 6, 2010	By:	/s/ B. F. Weatherly
		B. F. Weatherly
		Executive Vice President and
		Chief Financial Officer

2

Exhibit Index

Exhibit Number	Title of Document
99.1	Press release dated May 6, 2010 providing information regarding Callon Petroleum Company’s operating results for the quarter ended March 31, 2010.
99.2	Press release dated April 28, 2010 announcing Callon Petroleum Company’s conference call reporting first quarter 2010 results.
99.3	Press release dated May 6, 2010 announcing guidance for the second quarter and full year of 2010.

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 Improved Results of Operations

For First Quarter 2010

Natchez, MS (May 6, 2010)—Callon Petroleum Company (NYSE: CPE) today reported net income of $3.9 million, or $0.13 per diluted share, for the quarter ended March 31, 2010, which exceeds  analysts’ consensus estimate of $0.09 per diluted share, and compares to $2.4 million or $0.11 per diluted share for the same quarter in 2009.

Highlights of meaningful events thus far in 2010 include:

· Completed the redemption of the remaining $16.1 million of our 9.75% Senior Notes due December 2010 on April 30, 2010, resulting in approximately $889,000 of cash interest cost savings in 2010.

· Deconsolidated our special purpose subsidiary, Callon Entrada Company, on January 1, 2010, resulting in an approximate $85 million reduction in current liabilities and a corresponding $85 million increase to shareholders’ equity.

· Received $44.8 million in January 2010 from the Minerals Management Service (MMS) in a recoupment of royalties paid on our Medusa Field; an additional $7.9 million of interest is due to the company and we have been advised by the MMS that it has been processed for payment.

· Commenced Permian Basin Wolfberry development program.

· Completed an amended $100 million credit agreement with Regions Bank in January 2010 with an initial borrowing base of $20 million; no borrowings are currently outstanding.

· Added experienced key staff to implement and enhance our operational and financial objectives related to our new onshore strategy.

· On April 23, 2010, regained full compliance with the New York Stock Exchange’s continued listing standards five months ahead of the plan.

First Quarter 2010 Operating Results.  Operating results for the three months ended March 31, 2010 include oil and gas sales of $23.4 million from average production of 27.8 million cubic feet of natural gas equivalent per day (MMcfe/d), which was within the company’s published guidance range of 27 MMcfe/d to 29 MMcfe/d. For the same period of 2009, sales were $24.8 million from average production of 33.6 MMcfe/d.For the quarter ended March 31, 2010, the average price received per barrel of oil (Bbl), after the impact of hedging, increased 23% to $74.78, compared to $60.59 during the same period of 2009.  Partially offsetting the increases in oil prices, during the first quarter of 2010, the average price received per thousand cubic feet of natural gas (Mcf), after the impact of hedging, decreased 6% to $5.76 from $6.13 for the same period

of  2009.

First Quarter 2010 Discretionary Cash Flow. Discretionary cash flow for the three-month period ended March 31, 2010 totaled $11.3 million compared to $14.2 million during the comparable prior year period.  As defined by U.S. generally accepted accounting principles (GAAP), net cash flow provided by operating activities totaled $55.7 million during the quarter ended March 31, 2010 and net cash flow provided by operating activities totaled $2.2 million during the quarter ended March 31, 2009. (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.)

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 that the company may not control and that 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 activiti es or net income as defined by GAAP.

Reconciliation of Non-GAAP Financial Measure:

(in thousands)

	Three Months Ended March 31
	2010		2009			Change
Discretionary cash flow	$	11,267	$	14,230		$	(2,963	)
Net working capital changes and other changes		44,401		(11,984	)		56,385
Net cash flow provided by operating activities	$	55,668	$	2,246		$	53,422

The following table sets forth certain unaudited operating information with respect to the company's oil and gas operations for the periods indicated:

	Three Months Ended March 31,
	2010			2009			Change			% Change
Net production (a):
Oil (MBbls)		223			263			(40	)		(15	)%
Gas (MMcf)		1,166			1,447			(281	)		(19	)%
Total production (MMcfe)		2,505			3,026			(521	)		(17	)%
Average daily production (MMcfe)		27.8			33.6			(5.8	)		(17	)%
Average sales price:
Oil (Bbls) (b)	$	74.78		$	60.59		$	14.19			23	%
Gas (Mcf)		5.76			6.13			(0.37	)		(6	)%
Total (Mcfe)		9.34			8.20			1.14			14	%
Oil and gas revenues (a):
Oil revenue	$	16,663		$	15,952		$	711			4	%
Gas revenue		6,722			8,863			(2,141	)		(24	)%
Total	$	23,385		$	24,815		$	(1,430	)		(6	)%
Additional per Mcfe data:
Sales price	$	9.34		$	8.20		$	1.14			14	%
Lease operating expense		(1.86	)		(1.33	)		(0.53	)		40	%
Operating margin	$	7.48		$	6.87		$	0.61			9	%
Other expenses per Mcfe:
Depletion, depreciation and amortization	$	2.72		$	3.11		$	(0.39	)		(13	)%
General and administrative (net of management fees)	$	1.72		$	0.60		$	1.12			186	%

(a) Amounts are in thousands

(b) Below is a reconciliation of the average NYMEX price to the average realized sales price per barrel of oil:

Average NYMEX oil price	$	78.72		$	43.08		$	35.64		83	%
Basis differential and quality adjustments		(2.75	)		(4.01	)		1.26		(31	)%
Transportation		(1.19	)		(1.35	)		0.16		(12	)%
Hedging		-			22.87			(22.87	)	(100	)%
Average realized oil price	$	74.78		$	60.59		$	14.19		23	%

Callon Petroleum Company

Consolidated Balance Sheets

(in thousands, except share data)

	March 31, 2010			December 31, 2009
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	42,229		$	3,635
Accounts receivable		15,087			20,798
Accounts receivable - MMS royalty recoupment		7,927			51,534
Fair market value of derivatives		637			145
Other current assets		987			1,572
Total current assets		66,867			77,684
Oil and gas properties, full-cost accounting method:
Evaluated properties		1,234,825			1,593,884
Less accumulated depreciation, depletion and amortization		(1,130,942	)		(1,488,718	)
Net oil and gas properties		103,883			105,166
Unevaluated properties excluded from amortization		27,714			25,442
Total oil and gas properties		131,597			130,608
Other property and equipment, net		2,528			2,508
Restricted investments		4,327			4,065
Investment in Medusa Spar LLC		11,180			11,537
Other assets, net		1,819			1,589
Total assets	$	218,318		$	227,991
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities	$	8,575		$	12,887
Asset retirement obligations		3,613			4,002
9.75% Senior Notes, net of $174 and $232 discount, respectively		15,878			15,820
Fair market value of derivatives		302			--
		28,368			32,709
Callon Entrada non-recourse credit facility		--			84,847
Total current liabilities		28,368			117,556
13% Senior Notes
Principal outstanding		137,961			137,961
Deferred credit, net of accumulated amortization of $889 and $0, respectively		30,324			31,213
Total 13% Senior Notes		168,285			169,174
Senior secured revolving credit facility		--			10,000
Asset retirement obligations		10,425			10,648
Other long-term liabilities		1,908			1,467
Total liabilities		208,986			308,845
Stockholders' equity (deficit):
Preferred Stock, $.01 par value, 2,500,000 shares authorized;		--			--
Common Stock, $.01 par value, 60,000,000 shares authorized; 28,776,331 and 28,742,926 shares outstanding at March 31, 2010 and December 31, 2009, respectively		288			287
Capital in excess of par value		244,818			243,898
Other comprehensive loss		(7,288	)		(7,478	)
Retained (deficit) earnings		(228,486	)		(317,561	)
Total stockholders' equity (deficit)		9,332			(80,854	)
Total liabilities and stockholders' equity (deficit)	$	218,318		$	227,991

Callon Petroleum Company

Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

	Three Months Ended March 31,
	2010			2009
Operating revenues:
Oil sales	$	16,663		$	15,952
Gas sales		6,722			8,863
Total operating revenues		23,385			24,815
Operating expenses:
Lease operating expenses		4,648			4,039
Depreciation, depletion and amortization		6,813			9,413
General and administrative		4,304			1,819
Accretion expense		580			1,038
Total operating expenses		16,345			16,309
Income from operations		7,040			8,506
Other (income) expenses:
Interest expense		3,594			4,782
Callon Entrada non-recourse credit facility interest expense		--			1,556
Other income		(361	)		(95	)
Total other (income) expenses		3,233			6,243
Income before income taxes		3,807			2,263
Income tax benefit		--			(24	)
Income before equity in earnings of Medusa Spar LLC		3,807			2,287
Equity in earnings of Medusa Spar LLC		116			117
Net income available to common shares	$	3,923		$	2,404
Net income per common share:
Basic	$	0.14		$	0.11
Diluted	$	0.13		$	0.11
Shares used in computing net income per common share:
Basic		28,738			21,607
Diluted		29,229			21,607

Callon Petroleum Company

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Three Months Ended March 31,
	2010			2009
Cash flows from operating activities:
Net income	$	3,923		$	2,404
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization		6,989			9,629
Accretion expense		580			1,038
Amortization of non-cash debt related items		137			731
Amortization of deferred credit		(889	)		--
Equity in earnings of Medusa Spar LLC		(116	)		(117	)
Deferred income tax expense		--			(24	)
Non-cash charge related to compensation plans		643			569
Changes in current assets and liabilities:
Accounts receivable		47,081			5,761
Other current assets		585			912
Current liabilities		(2,850	)		(19,614	)
Change in gas balancing receivable		(44	)		319
Change in gas balancing payable		87			30
Change in other long-term liabilities		(115	)		618
Change in other assets, net		(343	)		(10	)
Cash provided by operating activities		55,668			2,246
Cash flows from investing activities:
Capital expenditures		(6,974	)		(19,295	)
MMS bond for plugging and abandonment		(262	)		--
Distribution from Medusa Spar LLC		473			574
Cash used in investing activities		(6,763	)		(18,721	)
Cash flows from financing activities:
Payments on senior secured credit facility		(10,000	)		--
Cash used in financing activities		(10,000	)		--
Net change in cash and cash equivalents		38,905			(16,475	)
Cash and cash equivalents:
Balance, beginning of period		3,635			17,126
Less: Cash held by subsidiary deconsolidated at January 1, 2010		(311	)		--
Balance, end of period	$	42,229		$	651

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” 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 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 First Quarter 2010

Reporting Date and Conference Call

Natchez, MS (April 28, 2010)--Callon Petroleum Company (NYSE: CPE) today announced its first quarter results of operations will be released on Thursday afternoon, May 6, 2010.  A conference call discussing the results and current activity is scheduled for 10 a.m. Central Daylight Time Friday, May 7, 2010.

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 7 until noon May 8 Central Daylight Time, and may be accessed by dialing1-800-633-8284 and entering Reservation Number 21468061.

It should be noted that this news release contains 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 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-99.3

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 2010

Natchez, MS (May 6, 2010)—Callon Petroleum Company (NYSE: CPE) is issuing guidance for the second quarter and full year 2010.   The guidance, found in the table below, is expressed in ranges for the detailed components.

(MORE)

Second Quarter and Full Year 2010
Guidance Estimates
(In thousands, except per production unit amounts)
	Guidance for	Guidance for
	2nd Quarter 2010	Full Year 2010
Estimated production volumes:
Natural gas (Bcf)	1.1 -- 1.2	5.0 – 5.6
Crude oil (Mbo)	200 – 225	840 – 970
MMcfe/d	25 -- 28	27 – 31
Lease operating expenses:
Cash	$  5,000 -- $ 6,000	$18,000 -- $22,000
Non-cash	--             .	--             .
Total	$  5,000 -- $ 6,000	$18,000 -- $22,000
General and administrative expenses:
Cash	$  2,300 -- $ 2,400	$  9,300  -- $10,700
Non-cash	1,100 --    1,400	3,700  --     4,300
Total	$  3,400 -- $ 3,800	$13,000  -- $15,000
Interest expense:
Cash	$  4,000 -- $ 4,400	$15,500  -- $16,700
Non-cash	(500) --     (600)	(2,800) --   (3,100)
Total	$  3,500 -- $ 3,800	$12,700  -- $13,600
Medusa Spar LLC, net of tax	$     100 -- $    125	$     400  -- $     500
DD & A – Per Mcfe	$   2.75  -- $   2.80	$    2.70  -- $    2.80
Accretion expense	$     600 -- $    700	$  2,400  -- $  2,700
Income tax rate	0%	0%
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 2010.

		6/30/10		9/30/10		12/31/10
Natural Gas
Collars	Volume (MMcf)		225		225		225
	Ceiling	$	8.30	$	8.30	$	8.30
	Floor	$	5.00	$	5.00	$	5.00
Crude Oil
Collars	Volume (Mbo)		30		30		30
	Ceiling	$	90.00	$	90.00	$	90.00
	Floor	$	70.00	$	70.00	$	70.00
Crude Oil
Collars	Volume (Mbo)		30		30		30
	Ceiling	$	93.00	$	93.00	$	93.00
	Floor	$	70.00	$	70.00	$	70.00
Crude Oil
Collars	Volume (Mbo)		20		30		30
	Ceiling	$	101.50	$	101.50	$	101.50
	Floor	$	75.00	$	75.00	$	75.00

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” 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, 2009 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.