SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------------------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED SEPTEMBER 30, 1997 COMMISSION FILE NUMBER 0-25192
CALLON PETROLEUM COMPANY
(Exact name of Registrant as specified in its charter)
DELAWARE 64-0844345
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 NORTH CANAL STREET
NATCHEZ, MISSISSIPPI 39120
(Address of principal executive offices)(Zip code)
(601) 442-1601
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
As of October 24, 1997, there were 6,031,994 shares of the Registrant's Common
Stock, par value $.01 per share, outstanding.
<PAGE>
CALLON PETROLEUM COMPANY
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
Consolidated Balance Sheets as of September 30, 1997
and December 31, 1996 3
Consolidated Statements of Operations for the three and
nine-month periods ended September 30, 1997 and
September 30, 1996 4
Consolidated Statements of Cash Flows for the nine-month
periods ended September 30, 1997 and September 30, 1996 5
Notes to Consolidated Financial Statements 6-7
Management's Discussion and Analysis of Financial Condition
and Results of Operations 8-12
PART II. OTHER INFORMATION 13-16
2
<PAGE>
CALLON PETROLEUM COMPANY
CONSOLIDATED BALANCE SHEETS
($ IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................... $ 5,939 $ 7,669
Accounts receivable ..................................... 9,621 12,661
Other current assets .................................... 738 516
--------- ---------
Total current assets ................................. 16,298 20,846
--------- ---------
Oil & gas properties, full cost accounting method:
Evaluated properties .................................... 374,113 322,970
Less accumulated depreciation, depletion and amortization (277,771) (266,716)
--------- ---------
96,342 56,254
Unevaluated properties excluded from amortization ....... 30,954 26,235
--------- ---------
127,296 82,489
--------- ---------
Pipeline and other facilities, net .......................... 6,585 6,618
Other property and equipment, net ........................... 1,841 1,594
Deferred tax asset .......................................... 2,486 5,412
Long-term gas balancing receivable .......................... 246 660
Other assets, net ........................................... 1,598 901
--------- ---------
Total assets ......................................... $ 156,350 $ 118,520
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities ................ $ 8,203 $ 8,273
Undistributed oil and gas revenues ...................... 2,434 2,260
Accrued net profits interest payable .................... 2,035 5,435
--------- ---------
Total current liabilities ............................ 12,672 15,968
Long-term debt .............................................. 60,250 24,250
Other long-term liabilities ................................. 233 48
Long-term gas balancing payable ............................. 313 390
--------- ---------
Total liabilities .................................... 73,468 40,656
--------- ---------
Stockholders' equity:
Preferred stock, $0.01 par value, 2,500,000 shares
authorized: 1,315,500 shares of Convertible Exchange-
able Preferred Stock, Series A, issued and outstanding
with a liquidation preference of $32,887,500 ............ 13 13
Common stock, $0.01 par value; 20,000,000 shares
authorized; 6,028,994 at September 30, 1997 and
5,758,667 outstanding at December 31, 1996 .............. 60 58
Unearned compensation - restricted stock .................... (2,410) --
Capital in excess of par value .............................. 77,467 74,027
Retained earnings ........................................... 7,752 3,766
--------- ---------
Total stockholders' equity ........................... 82,882 77,864
--------- ---------
Total liabilities and stockholders' equity ........... $ 156,350 $ 118,520
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
CALLON PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
($ in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ --------------------
1997 1996 1997 1996
------ ------ ------- -------
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas sales ............................... $8,734 $6,329 $29,578 $18,578
Interest and other .............................. 467 259 1,162 537
------ ------ ------- -------
Total revenues ............................... 9,201 6,588 30,740 19,115
------ ------ ------- -------
COSTS AND EXPENSES:
Lease operating expenses ........................ 2,071 1,960 6,235 5,646
Depreciation, depletion and amortization ........ 3,707 2,853 11,288 7,697
General and administrative ...................... 881 645 3,263 2,352
Interest ........................................ 735 136 945 184
------ ------ ------- -------
Total costs and expenses ..................... 7,394 5,594 21,731 15,879
------ ------ ------- -------
Income from operations .............................. 1,807 994 9,009 3,236
Income tax expense .................................. 615 -- 2,926 --
------ ------ ------- -------
Net income .......................................... 1,192 994 6,083 3,236
Preferred stock dividend ............................ 699 699 2,097 2,097
------ ------ ------- -------
Net income available to common shares ............... $ 493 $ 295 $ 3,986 $ 1,139
====== ====== ======= =======
Net income per common share:
Primary ......................................... $ 0.08 $ 0.05 $ 0.63 $ 0.20
====== ====== ======= =======
Assuming full dilution .......................... $ 0.08 $ 0.05 $ 0.62 $ 0.20
====== ====== ======= =======
Shares used in computing net income per common share:
Primary ......................................... 6,379 5,755 6,332 5,755
====== ====== ======= =======
Assuming full dilution .......................... 6,448 5,755 6,440 5,755
====== ====== ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
CALLON PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
($ in thousands)
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------
1997 1996
Cash flows from operating activities: -------- --------
Net income ........................................... $ 6,083 $ 3,236
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization .......... 11,607 7,913
Amortization of deferred costs .................... 321 201
Deferred income tax expense ....................... 2,926 --
Noncash compensation related to stock plans ....... 973 --
Changes in current assets & liabilities:
Accounts receivable ............................... 3,040 (72)
Other current assets .............................. (222) 89
Current liabilities ............................... (3,924) 5,728
Change in gas balancing receivable ................... 414 184
Change in gas balancing payable ...................... (77) (79)
Change in other long-term liabilities ................ 185 (25)
Change in other assets, net .......................... (1,018) (53)
-------- --------
Cash provided by operating activities ............. 20,308 17,122
-------- --------
Cash flows from investing activities:
Capital expenditures ................................. (61,034) (20,402)
Cash proceeds from sale of mineral interests ......... 4,405 528
-------- --------
Cash used in investing activities ................. (56,629) (19,874)
-------- --------
Cash flows from financing activities:
Increase in debt ..................................... 54,500 8,850
Payment on debt ...................................... (18,500) --
Equity issued by conversion of stock options ......... 60 --
Increase in accrued preferred stock dividends payable -- 443
Dividends on preferred stock ......................... (2,097) (2,097)
Change in accrued liabilities for capital expenditures 628 --
-------- --------
Cash provided by (used in) financing activities ... 34,591 7,196
-------- --------
Net increase (decrease) in cash and cash equivalents ..... (1,730) 4,444
Cash and cash equivalents:
Balance, beginning of period ......................... 7,669 4,265
-------- --------
Balance, end of period ............................... $ 5,939 $ 8,709
======== ========
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
CALLON PETROLEUM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
1. BASIS OF PRESENTATION
The financial information presented as of any date other than December
31, has been prepared from the books and records without audit.
Financial information as of December 31, has been derived from the
audited financial statements of the Company, but does not include all
disclosures required by generally accepted accounting principles. In
the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the
financial information for the period indicated, have been included. For
further information regarding the Company's accounting policies, refer
to the Consolidated Financial Statements and related notes for the year
ended December 31, 1996 included in the Company's Annual Report on Form
10-K dated March 24, 1997.
2. EARNINGS PER SHARE
The assumed conversion of preferred stock into common stock was not
included in any current year or prior year calculations due to the
antidilutive effect.
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128 ("FAS 128"), "Earnings Per Share", which simplifies
the computation of earnings per share. FAS 128 is effective for
financial statements issued for periods ending after December 15, 1997
and requires restatement for all prior period earnings per share data
presented. Accordingly, basic earnings per share and diluted earnings
per share calculated in accordance with FAS 128 were as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
Per Share Data:
Basic earnings per share ......... $ 0.08 $ 0.05 $ 0.66 $ 0.20
Diluted earnings per share ....... $ 0.08 $ 0.05 $ 0.63 $ 0.20
3. ACQUISITIONS
In June of 1997, the Company acquired an 18.8% working interest in the
Mobile Area Block 864 Unit, a 17.5% working interest in Mobile Area
Blocks 863 and 907, and a 35% working interest in Mobile Area Block 908
from ELF Exploration, Inc. The net purchase price was $11.8 million and
was funded by the Company's Credit Facility.
4. SENIOR SUBORDINATED NOTES
On July 31, 1997 the Company issued $36 million of 10.125% Series A
Senior Subordinated Notes due 2002. Interest is payable quarterly
beginning September 15, 1997. The Senior Subordinated Notes were
offered in a private placement transaction. Until November 10, 1997,
the Series A Notes are exchangeable for $36 million aggregate principal
amount of the Company's 10.125% Series B Senior Subordinated Notes due
2002 that have been registered under the Securities Act.
The net proceeds to the Company, after costs of the transaction, were
used to repay the outstanding balance on Callon's Credit Facility and
fund a portion of the remaining 1997 capital expenditure budget.
6
<PAGE>
5. RECENT DEVELOPMENTS
In October 1997, the Company agreed to purchase Chevron U.S.A Inc.'s
interest in the Mobile Block 864 Area (the "Chevron Acquisition") for
$34 million effective July 1, 1997. The Chevron Acquisition is expected
to close November 1997 for a net purchase price of $30.9 million.
Because all working interest owners in this property, including the
Company, have a preferential right to acquire a proportionate share of
this Chevron interest, the Company's total interest acquired could be
reduced by 39%. No assurances can be made that the Company will be able
to successfully consummate the Chevron Acquisition or as to whether
preferential rights will be exercised.
On November 4, 1997, the Company filed a registration statement with
the Securities and Exchange Commission whereby 2,300,000 shares of the
Company's common stock will be offered. The net proceeds will be used
to fund the Chevron Acquisition and a portion of the Company's budgeted
exploration and development expenditures.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
GENERAL
The Company's revenues, profitability and future growth and the carrying value
of its oil and gas properties are substantially dependent on prevailing prices
of oil and gas. The Company's ability to maintain or increase its borrowing
capacity and to obtain additional capital on attractive terms is also
substantially dependent upon oil and gas prices. Prices for oil and gas are
subject to large fluctuation in response to relatively minor changes in the
supply of and demand for oil and gas, market uncertainty and a variety of
additional factors beyond the control of the Company. Any substantial and
extended decline in the price of oil or gas would have an adverse effect on the
Company's carrying value of its proved reserves, borrowing capacity, revenues,
profitability and cash flows from operations.
The following discussion is intended to assist in an understanding of the
Company's historical financial position and results of operations for the three
and nine-month periods ended September 30, 1997 and 1996. The Company's
historical financial statements and notes thereto included elsewhere in this
quarterly report contain detailed information that should be referred to in
conjunction with the following discussion.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of capital are its cash flow from operations,
borrowings from financial institutions and the sale of debt and equity
securities. Net cash provided by operating activities for the nine months ending
September 30, 1997 totaled $20.3 million. Other sources of cash during the first
nine months were $54.5 million advanced under the Company's Credit Facility and
sale of senior subordinated notes and $4.4 million was generated from the sale
of mineral interests. During the first nine months of 1997, debt payments were
$18.5 million, capital expenditures were $61 million and $2.1 million was paid
as dividends to the preferred stockholders.
At September 30, 1997, the Company had working capital of $3.6 million and a
current ratio of 1.3 to 1.
The Company has budgeted $85.6 million in capital expenditures through fiscal
1998. During the first nine months of 1997, the Company has expended
approximately $24 million on drilling, development and exploration activities
and $37 million in acquisitions of producing properties, undeveloped mineral
interests and seismic information attributable to future drilling sites. The
Company intends to continue evaluating other potential producing property
acquisitions and drilling opportunities. The capital budget will be financed
with the sale of debt and equity securities, projected cash flow from operations
and unused borrowings under the Company's Credit Facility.
On July 31, 1997 the Company issued $36 million of 10.125% Series A Senior
Subordinated Notes due 2002. Interest is payable quarterly beginning September
15, 1997. The Senior Subordinated Notes were offered in a private placement
transaction. The net proceeds to the Company, after costs of the transaction,
were used to repay the outstanding balance on Callon's Credit Facility and fund
a portion of the remaining 1997 capital expenditure budget.
8
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth certain operating information with respect to the
oil and gas operations of the Company.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ -----------------
1997 1996 1997 1996
------- ------ ----- -----
<S> <C> <C> <C> <C>
Production:
Oil (MBbls) ....................................... 114 149 351 451
Gas (MMcf) ........................................ 2,946 1,872 9,394 4,784
Total production (MMcfe) .......................... 3,628 2,766 11,497 7,490
Average sales price:
Oil (per Bbl) ..................................... $17.71 $17.90 $ 18.83 $ 18.05
Gas (per Mcf) ..................................... 2.28 1.96 2.45 2.18
Total production (per Mcfe) ....................... 2.40 2.29 2.57 2.48
Average costs (per Mcfe):
Lease operating (excluding severance taxes) ....... $ 0.49 $ 0.51 $ 0.45 $ 0.56
Severance taxes ................................... 0.08 0.19 0.09 0.20
Depreciation, depletion and amortization .......... 1.02 1.03 0.98 1.03
General and administrative (net of management fees) 0.24 0.23 0.28 0.31
</TABLE>
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30,
1997 AND THE THREE MONTHS ENDED SEPTEMBER 30, 1996.
OIL AND GAS PRODUCTION AND REVENUES
Total oil and gas revenues increased 38% from $6.3 million in 1996 to $8.7
million in 1997. This increase is largely the result of increased gas production
from newly acquired properties.
Oil production during the third quarter of 1997 totaled 114,000 barrels and
generated $2.0 million in revenues compared to 149,000 barrels and $2.7 million
in revenues for the same period in 1996. Third quarter average daily production
decreased from 1,619 barrels per day in 1996 to 1,236 barrels per day in 1997.
Average oil prices received in the third quarter of 1997 were $17.71 compared to
$17.90 in 1996. This reduction in production and corresponding reduction in
revenues is normal considering the maturity of the owned properties.
Gas production during the third quarter of 1997 totaled 2.95 billion cubic feet
and generated $6.7 million in revenues compared to 1.87 billion cubic feet and
$3.6 million in revenues during the same period in 1996. The average sales price
for the third quarter of 1997 averaged $2.28 per thousand cubic feet compared to
$1.96 per thousand cubic feet at this time last year. Although the North Dauphin
Island Field production was lower than last year, production from the new
properties more than offset this decline.
9
<PAGE>
The following table summarizes oil and gas production from the Company's major
producing properties for the comparable periods.
OIL PRODUCTION GAS PRODUCTION
(BARRELS) (MCF)
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------- ---------------------
1997 1996 1997 1996
------- ------- --------- ---------
Chandeleur Block 40 ................ -- -- 843,000 402,000
Main Pass 163 ...................... -- -- 854,000 88,000
Main Pass 164/165 .................. -- -- 299,000 12,000
Mobile Bay 864 ..................... -- -- 323,000 --
North Dauphin Island Field ......... -- -- 306,000 1,039,000
Black Bay Complex .................. 41,000 52,000 -- --
Big Escambia Creek ................. 29,000 25,000 44,000 49,000
Other properties ................... 44,000 72,000 277,000 282,000
------- ------- --------- ---------
Total ......................... 114,000 149,000 2,946,000 1,872,000
======= ======= ========= =========
LEASE OPERATING EXPENSES
Lease operating expenses, including severance taxes, for the three-month period
ending September 30, 1997 were $2.1 million, substantially unchanged from $2.0
million for the same period in 1996. Average severance tax per Mcfe declined due
to a significantly higher portion of the Company's production coming from wells
on federal offshore leases, not subject to severance taxes.
DEPRECIATION, DEPLETION AND AMORTIZATION
Depreciation, depletion and amortization for the three months ending September
30, 1997 and 1996 was $3.7 million and $2.9 million, respectively, reflecting
the overall increase in production. For the three-month periods ending September
30, 1997 and 1996, the per Mcf equivalent amount was $1.02 and $1.03,
respectively.
GENERAL AND ADMINISTRATIVE
General and administrative expense for the three months ended September 30, 1997
was $0.9 million compared to $0.6 million for the three months ended September
30, 1996. This expense increase is generally attributable to increased
compensation expense attributable to stock plans and a reduction in management
fees as a result of property sales.
10
<PAGE>
INTEREST EXPENSE
Interest expense increased from $136,000 during the three months ended September
30, 1996 to $735,000 during the three months ended September 30, 1997 reflecting
the increase in the Company's long-term debt.
COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
AND THE NINE MONTHS ENDED SEPTEMBER 30, 1996.
OIL AND GAS PRODUCTION AND REVENUES
For the nine months ended September 30, 1997, total oil and gas revenues
increased by $11.0 million, or 59%, to $29.6 million when compared to $18.6
million for the same period in 1996.
For the nine months ending September 30, 1997, oil production and revenues
decreased to 351,000 barrels and $6.6 million, respectively. For the comparable
period in 1996, oil production was 451,000 barrels while revenues totaled $8.1
million. Oil prices during the first nine months of 1997 averaged $18.83,
compared to $18.05 for the same period in 1996. Although prices were higher, the
loss of production from the properties that were sold and the decline in other
non-core properties caused the overall decline in oil revenues.
Natural gas production and revenue for the nine-month period ending September
30, 1997 were 9.39 billion cubic feet and $23.0 million, respectively,
increasing from 4.78 billion cubic feet and gas revenues of $10.4 million in the
first nine months of 1996. The average sales price for natural gas in the first
nine months in 1997 was $2.45 per Mcf, a $0.27 per Mcf increase over the same
period in 1996. The combination of increased prices and production volumes
generated the 120% increase in total gas revenues.
The following table summarizes oil and gas production from the Company's major
producing properties for the comparable periods.
OIL PRODUCTION GAS PRODUCTION
(BARRELS) (MCF)
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------- ---------------------
1997 1996 1997 1996
------- ------- --------- ---------
Chandeleur Block 40 ................ -- -- 3,094,000 1,158,000
Main Pass 163 ...................... -- -- 3,331,000 122,000
Main Pass 164/165 .................. -- -- 569,000 12,000
Mobile Bay 864 ..................... -- -- 323,000 --
North Dauphin Island Field ......... -- -- 1,132,000 2,514,000
Black Bay Complex .................. 134,000 152,000 -- --
Big Escambia Creek ................. 85,000 74,000 143,000 133,000
Other properties ................... 132,000 225,000 802,000 845,000
------- ------- --------- ---------
Total ......................... 351,000 451,000 9,394,000 4,784,000
======= ======= ========= =========
11
<PAGE>
LEASE OPERATING EXPENSES
Lease operating expenses, excluding severance taxes, for the first nine months
of 1997 increased by 24% to $5.2 million from $4.2 million for the 1996
comparable period. This increase is primarily the result of expenses associated
with the new producing properties. Severance taxes decreased by 29% to $1.1
million during the first nine months of 1997 from $1.5 million for the same
period in 1996 as a result of production declines in the Company's onshore
properties, property sales and a significantly higher portion of the Company's
production coming from wells on federal offshore leases, not subject to
severance taxes.
DEPRECIATION, DEPLETION AND AMORTIZATION
Depreciation, depletion and amortization for the first nine months of 1997 was
$11.3 million, or $0.98 per Mcf equivalent. For the same period in 1996, the
total was $7.7 million and $1.03 per Mcf equivalent.
GENERAL AND ADMINISTRATIVE
During the first nine months of 1997, general and administrative expenses
increased by 39% to $3.3 million compared to $2.4 million for the nine-month
period in 1996. Increased compensation expense related to stock plans and a
reduction in management fees as a result of property sales, combined to produce
this overall increase.
INTEREST EXPENSE
Interest expense during the first three quarters of 1997 was $945,000 compared
to $184,000 for the first three quarters of 1996 as a result of the increase in
the Company's long-term debt.
<PAGE>
CALLON PETROLEUM COMPANY
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
2. Plan of acquisition, reorganization, arrangement,
liquidation or succession*
3. Articles of Incorporation and By-Laws
3.1 Certificate of Incorporation of the Company, as
amended (incorporated by reference from Exhibit
3.1 of the Company's Registration Statement on
Form S-4, Reg. No. 33-82408)
3.2 Certificate of Merger of Callon Consolidated
Partners, L. P. with and into the Company dated
September 16, 1994 (incorporated by reference
from Exhibit 3.2 of the Company's Report on Form
10-K for the period ended December 31, 1994)
3.3 Bylaws of the Company (incorporated by reference
from Exhibit 3.2 of the Company's Registration
Statement on Form S-4, Reg. No. 33-82408)
4. Instruments defining the rights of security holders,
including indentures
4.1 Specimen stock certificate (incorporated by
reference from Exhibit 4.1 of the Company's
Registration Statement on Form S-4, Reg. No.
33-82408)
4.2 Specimen Preferred Stock Certificate
(incorporated by reference from Exhibit 4.2 of
the Company's Registration Statement on Form S-1,
Reg. No. 33-96700)
4.3 Designation for Convertible Exchangeable
Preferred Stock, Series A (incorporated by
reference from Exhibit 4.3 of the Company's
Report on Form 10-K for the period ended December
31, 1995)
13
<PAGE>
4.4 Indenture for Convertible Debentures
(incorporated by reference from Exhibit 4.4 of
the Company's Report on Form 10-K for the period
ended December 31, 1995)
4.5 Certificate of Correction on Designation of
Series A Preferred Stock (incorporated by
reference from Exhibit 4.4 of the Company's
Registration Statement on Form S-1/A filed
November 22, 1996, Reg. No. 333-15501)
4.6 Form of Note Indenture (incorporated by reference
from Exhibit 4.6 of the Company's Registration
Statement on Form S-1/A filed November 22, 1996,
Reg. No. 333-15501)
4.7 Indenture for 10.125% Senior Notes due 2002
(incorporated by reference from Exhibit 4.1 of
the Company's Registration Statement on Form S-4,
Reg. No. 33-36395)
10. Material contracts
10.1 Registration Rights Agreement dated September 16,
1994 between the Company and NOCO Enterprises, L.
P. (incorporated by reference from Exhibit 10.2
of the Company's Registration Statement on Form
8-B filed October 3, 1994)
10.2 Registration Rights Agreement dated September 16,
1994 between the Company and Callon Stockholders
(incorporated by reference from Exhibit 10.3 of
the Company's Registration Statement on Form 8-B
filed October 3, 1994)
10.3 Callon Petroleum Company 1994 Stock Incentive
Plan (incorporated by reference from Exhibit 10.5
of the Company's Registration Statement on Form
8-B filed October 3, 1994)
10.4 Credit Agreement dated October 14, 1994 by and
between the Company, Callon Petroleum Operating
Company and Internationale Nederlanden (U.S.)
Capital Corporation (incorporated by reference
from Exhibit 99.1 of the Company's Report on Form
10-Q for the quarter ended September 30, 1994)
10.5 Third Amendment dated February 22, 1996, to
Credit Agreement by and among Callon Petroleum
Operating Company, Callon Petroleum Company and
Internationale Nederlanden (U.S.) Capital
Corporation (incorporated by reference from
Exhibit 10.9
14
<PAGE>
of the Company's report on Form 10-K
for the period ended December 31, 1995)
10.6 Consulting Agreement between the Company and John
S. Callon dated September 19, 1996 (incorporated
by reference from Exhibit 10.10 of the Company's
Registration Statement on Form S-1, filed
November 5, 1996, Reg. No. 333-15501)
10.7 Callon Petroleum Company 1996 Stock Incentive
Plan (incorporated by reference from Exhibit 10.6
of the Company's Registration Statement on Form
S-1/A, filed November 14, 1996, Reg. No.
333-15501)
10.8 Employment Agreement effective September 1, 1996,
between the Company and Fred L. Callon
(incorporated by reference from Exhibit 10.4 of
the Company's Registration Statement on Form
S-1/A, filed November 14, 1996, Reg. No.
333-15501)
10.9 Employment Agreement effective September 1, 1996,
between the Company and Dennis W. Christian
(incorporated by reference from Exhibit 10.7 of
the Company's Registration Statement on Form
S-1/A, filed November 14, 1996, Reg. No.
333-15501)
10.10 Employment Agreement effective September 1, 1996,
between the Company and John S. Weatherly
(incorporated by reference from Exhibit 10.8 of
the Company's Registration Statement on Form
S-1/A, filed November 14, 1996, Reg. No.
333-15501)
10.11 Letter of Intent from Chevron U.S.A. Inc. dated
August 29, 1997 for the sale to Callon Petroleum
Company of Chevron's interest in Mobile Blocks
863, 864, 907 and 908 for depths from the surface
to 4200 feet (incorporated by reference from Form
8-K, filed November 4, 1997)
11. Statement re computation of per share earnings
11.1 Statement of earnings per share
15. Letter re unaudited interim financial information*
18. Letter re change in accounting principles*
19. Report furnished to security holders*
15
<PAGE>
22. Published report regarding matters submitted to vote of
security holders*
23. Consents of experts and counsel*
24. Power of attorney*
27. Financial Data Schedule
99. Additional exhibits*
(b) Reports on Form 8-K and 8-K/A.
On July 11, 1997, the Company filed a report on Form 8-K in
connection with the Company's purchase of certain oil and gas
mineral interests from Elf Exploration, Inc. (the "Elf
Acquisition") for $11.8 million. The Company purchased an 18.8%
working interest in the Mobile Area Block 864 Unit. The purchase
included a 17.5% working interest in Mobile Area Blocks 863 and
907 and a 35% working interest in Mobile Area Block 908. At the
time this report was filed, it was impracticable to provide the
required financial statements and pro forma information. On
August 8, 1997, the Company filed a report on Form 8-K/A, which
included the required, audited financial statements of the
property acquired and the unaudited pro forma financial
information.
On August 8, 1997, the Company filed a report on Form 8-K
reporting the completion on July 31, 1997, of the sale of $36
million of Senior Subordinated Notes due 2002 with a coupon of
10.125%. The Company agreed to file by October 1, 1997, and to
use its best efforts to cause to become effective by November
15, 1997, a registration statement relating to an exchange offer
for these Notes. A Registration Statement was filed on September
25, 1997 and declared effective on October 10, 1997.
* Inapplicable to this filing
16
<PAGE>
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 thereunto duly authorized.
CALLON PETROLEUM COMPANY
Date NOVEMBER 4 , 1997 By /s/ JOHN S. WEATHERLY
John S. Weatherly, Senior Vice President,
Chief Financial Officer and Treasurer
17
EXHIBIT 11.1
CALLON PETROLEUM COMPANY
COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share data)
THREE MONTHS NINE MONTHS
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
------ ------ ----- -----
Net income ......................... $1,192 $ 994 $ 6,083 $ 3,236
Preferred stock dividends .......... 699 699 2,097 2,097
------ ------ ----- -----
Net income available
to common shareholders .......... $ 493 $ 295 $ 3,986 $ 1,139
====== ====== ===== =====
Net income per common share:
Primary ............................ $ 0.08 $ 0.05 $0.63 $0.20
====== ====== ===== =====
Fully diluted ...................... $ 0.08 $ 0.05 $0.62 $0.20
====== ====== ===== =====
Average common shares
outstanding ..................... 6,025 5,755 6,017 5,755
Stock options ...................... 354 0 315 0
------ ------ ----- -----
Primary shares outstanding ......... 6,379 5,755 6,332 5,755
====== ====== ===== =====
Average common shares
outstanding ..................... 6,025 5,755 6,017 5,755
Stock options ...................... 423 0 423 0
Convertible preferred stock ........ 0 0 0 0
------ ------ ----- -----
Fully diluted shares outstanding ... 6,448 5,755 6,440 5,755
====== ====== ===== =====
NOTE: All computations are based on the weighted average shares outstanding for
the periods presented, adjusted for the effect of stock options, if any,
considered common stock equivalents computed using the treasury stock method.
The Convertible preferred stock is not a common stock equivalent and was not
considered in the fully diluted computation because, if included, the effect
would be antidilutive.
18
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF CALLON PETROLEUM COMPANY FOR
THE PERIOD ENDED SEPTEMBER 30, 1997 WHICH ARE PRESENTED IN ITS QUARTERLY REPORT
ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,939
<SECURITIES> 0
<RECEIVABLES> 9,621
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,298
<PP&E> 405,067
<DEPRECIATION> 277,771
<TOTAL-ASSETS> 156,350
<CURRENT-LIABILITIES> 12,672
<BONDS> 0
0
13
<COMMON> 60
<OTHER-SE> 82,809
<TOTAL-LIABILITY-AND-EQUITY> 156,350
<SALES> 29,578
<TOTAL-REVENUES> 30,740
<CGS> 0
<TOTAL-COSTS> 20,786
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 945
<INCOME-PRETAX> 9,009
<INCOME-TAX> 2,926
<INCOME-CONTINUING> 6,083
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,083
<EPS-PRIMARY> 0.63
<EPS-DILUTED> 0.62
</TABLE>
