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 (DATE OF EARLIEST EVENT REPORTED): OCTOBER 31, 1997
CALLON PETROLEUM COMPANY
(Exact name of Registrant as specified in its charter)
DELAWARE 0-16866 64-0844345
(State or other jurisdiction of Commission (I.R.S. Employer
incorporation or organization) File Number Identification No.)
200 NORTH CANAL STREET
NATCHEZ, MISSISSIPPI 39120
(Address of Principal Executive Offices) (Including Zip Code)
(601) 442-1601
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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 in November 1997 for a net purchase price of $30.9 million.
One other owner of working interests in the properties covered by the
Chevron Acquisition has the preferential right to acquire interests in
the properties, which, if exercised could reduce the interest acquired
by the Company and the purchase price up to 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.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Properties Acquired
The following audited financial statements are filed with this
report:
Report of Independent Accountants Page F-1
Statement Revenues and Direct Operating Expenses
of the Property for the Years Ended
December 31, 1996, 1995 and 1994 Page F-2
Notes to Statement of Revenues and Direct Operating
Expenses of the Property Page F-3
(b) Pro Forma Financial Information
The following unaudited pro forma consolidated financial statements are
filed with this report:
Introduction Page F-8
Unaudited Pro Forma Consolidated Balance
Sheet as of September 30, 1997 Page F-9
Unaudited Pro Forma Consolidated Statement
of Operations for the Year Ended December 31, 1996 Page F-10
Unaudited Pro Forma Consolidated Statement of
Operations for the Nine Months Ended
September 30, 1997 Page F-11
Notes to Pro Forma Financial Statements Page F-12
(c) Exhibits.
1. Underwriting Agreement*
2. Plan of acquisition, reorganization, arrangement, liquidation
or succession
2.1 Letter of Intent to Purchase
4. Instruments defining the rights of security holders,
including indentures*
16. Letter re change in certifying accountants*
17. Letter re director resignation*
20. Other documents or statements to security holders*
23. Consents of experts and counsel
23.1 Consent of Price Waterhouse LLP
24. Power of attorney*
27. Financial Data Schedule*
99. Additional exhibits*
----------------------
* Inapplicable to this filing
<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
<PAGE>
PAGE F-1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
of Callon Petroleum Company
We have audited the accompanying statement of revenues and direct operating
expenses of Chevron U.S.A. Inc.'s working interest in Mobile 864 Unit Outer
Continental Shelf (the "Property") to be acquired by Callon Petroleum Operating
Company (the "Company"), a wholly owned subsidiary of Callon Petroleum Company,
for each of the three years in the period ended December 31, 1996. This
statement is the responsibility of the Company's management. Our responsibility
is to express an opinion on this statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and direct operating expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of revenues and
direct operating expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the statement of revenues and direct
operating expenses. We believe that our audit provides a reasonable basis for
our opinion.
The accompanying statement of revenues and direct operating expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission (for inclusion in the registration statement
on Form S-2 of Callon Petroleum Company) as described in Note 1 and is not
intended to be a complete presentation of the Property's revenues and expenses.
In our opinion, the statement of revenues and direct operating expenses referred
to above presents fairly, in all material respects, the revenues and direct
operating expenses of the Property described in Note 1 for each of the three
years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles.
PRICE WATERHOUSE LLP
San Francisco, California
October 29, 1997
<PAGE>
PAGE F-2
STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES OF THE PROPERTY
(in thousands)
FOR THE
NINE MONTHS
ENDED DECEMBER 31,
SEPTEMBER 30,-----------------------------
1997 1996 1995 1994
------- ------- ------- -------
(UNAUDITED)
Oil and gas revenues................ $ 7,607 $14,238 $10,777 $18,901
Direct operating expenses .......... 86 480 544 340
------- ------- ------- -------
Revenues in excess of direct
operating
Expenses ........................ $ 7,521 $13,758 $10,233 $18,561
======= ======= ======= =======
See accompanying notes.
<PAGE>
PAGE F-3
NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES OF THE PROPERTY
(in thousands)
1. BASIS OF PRESENTATION
Callon Petroleum Operating Company (the "Company"), a wholly owned
subsidiary of Callon Petroleum Company, agreed in October 1997 to acquire
Chevron U.S.A. Inc.'s working interest in Mobile 864 Unit Outer Continental
Shelf which includes the twelve-inch Mobile 908 Area Gathering Pipeline (the
"Property") for $34 million, effective July 1, 1997. The pending acquisition
is expected to close in November 1997 for a net acquisition cost of $30.9
million. One other owner of working interests in the Property covered by the
pending acquisition has the preferential right to acquire the Property which
if exercised could reduce the interest acquired by the Company and the
purchase price up to 39%.
The accompanying statement of revenues and direct operating expenses relates
only to the working interest in the producing oil and gas property to be
acquired and may not be representative of future operations. The statement
includes revenues from natural gas sales and direct operating expenses for
each of the periods presented. The statement does not include federal and
state income taxes, interest, depletion, depreciation and amortization or
general and administrative expenses because such amounts would not be
indicative of those expenses which would be incurred by the Company.
Presentation of complete historical financial statements for each of the
three years ended December 31, 1996 and the nine months ended September 30,
1997 is not practicable because the Property was not accounted for as a
separate entity; therefore, such statements are not available.
Revenues in the accompanying statement of revenues and direct operating
expenses are recognized on the entitlement method.
The accompanying statement has been prepared on the accrual basis in
accordance with generally accepted accounting principles. Preparation of the
statement in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the amounts
reported in the statement and accompanying notes. Actual results could differ
from those estimates.
The interim revenues and direct operating expenses for the nine months ended
September 30, 1997 are unaudited; however, in the opinion of the Company, the
interim revenues and direct operating expenses include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
statement of the results for the interim period.
2. COMMITMENTS AND CONTINGENCIES
In the normal course of business the Company is subject to possible loss
contingencies arising from federal, state and local environmental, health and
safety laws and regulations, joint venture audit claims and third party
litigation. There are no matters which, in the
<PAGE>
PAGE F-4
NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES OF THE PROPERTY
(in thousands)
opinion of management, will have a material adverse effect on the revenues
and direct operating expenses of the Property.
3. RELATED PARTY TRANSACTIONS
The Property was not operated as a separate entity for the periods presented
in the accompanying statement, but was included in the operations of Chevron
U.S.A. Inc. Effective September 1, 1996, all revenues from production were
transferred to an equity affiliate of Chevron Corporation, the parent of
Chevron U.S.A. Inc., at approximate market prices.
4. SUPPLEMENTAL OIL AND GAS RESERVE DATA (UNAUDITED)
The Property's proved oil and gas reserves at December 31, 1996, 1995 and
1994 have been estimated by the Company's independent petroleum consultants
in accordance with guidelines established by the Securities and Exchange
Commission ("SEC").
There are numerous uncertainties inherent in establishing quantities of
proved reserves. The following reserve data represent estimates only and
should not be construed as being exact. In addition, the present values
should not be construed as the current market value of the Property or the
cost that would be incurred to obtain equivalent reserves.
<PAGE>
PAGE F-5
NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES OF THE PROPERTY
(in thousands)
ESTIMATED RESERVES
Changes in the estimated net quantities of natural gas reserves are as
follows:
GAS
NET PROVED RESERVES OF NATURAL GAS (MMCF)
-------
PROVED DEVELOPED AND
UNDEVELOPED RESERVES AT:
December 31, 1993 ......................................... 56,066
Production ................................................ (10,166)
-------
December 31, 1994 ......................................... 45,900
Production ................................................ (6,462)
-------
December 31, 1995 ......................................... 39,438
Production ................................................ (5,533)
-------
December 31, 1996 ......................................... 33,905
-------
PROVED DEVELOPED RESERVES AT:
December 31, 1994 ......................................... 45,900
December 31, 1995 ......................................... 39,438
December 31, 1996 ......................................... 33,905
<PAGE>
PAGE F-6
NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES OF THE PROPERTY
(in thousands)
STANDARDIZED MEASURE
The following tables present the Property's standardized measure of
discounted future net cash flows and changes therein relating to proved
reserves and were computed using reserve valuations based on regulations
prescribed by the SEC. These regulations provide that the gas price structure
utilized to project future net cash flows reflects current prices at each
date presented. Future production, development and net abandonment costs are
based on current costs without escalation. Estimated future income taxes are
calculated by applying appropriate year-end statutory tax rates. These rates
reflect allowable deductions and tax credits and are applied to estimated
future pre-tax net cash flows, less the tax basis of related assets. The
resulting net future cash flows have been discounted to their present values
based on a 10% annual discount factor.
STANDARDIZED MEASURE
DECEMBER 31,
-----------------------------------
1996 1995 1994
--------- -------- --------
Future cash inflows .................... $ 133,247 $ 90,313 $ 80,325
Future production and
development costs ..................... (6,361) (7,080) (7,509)
Future income taxes .................... (30,545) (10,451) (3,224)
--------- -------- --------
Future net cash flows
undiscounted .......................... 96,341 72,782 69,592
10% annual discount for
estimated timing of cash flows ........ (33,066) (25,261) (24,373)
--------- -------- --------
Standardized measure of discounted
future net cash flows ................. $ 63,275 $ 47,521 $ 45,219
========= ======== ========
<PAGE>
PAGE F-7
NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES OF THE PROPERTY
(in thousands)
CHANGES IN STANDARDIZED MEASURE
DECEMBER 31,
----------------------------------
1996 1995 1994
-------- -------- --------
Standardized measure of
discounted future net
cash flows at beginning
of period .............................. $ 47,521 $ 45,219 $ 66,437
Changes resulting from:
Sales of natural gas produced,
net of production costs .............. (13,758) (10,233) (18,561)
Net changes in sales prices,
net of production costs .............. 37,315 12,533 (14,732)
Accretion of discount .................. 5,435 4,731 7,331
Net change in income taxes ............. (13,238) (4,729) 4,744
-------- -------- --------
Standardized measure of discounted
future net cash flows at end of
period ................................. $ 63,275 $ 47,521 $ 45,219
======== ======== ========
<PAGE>
PAGE F-8
CALLON PETROLEUM COMPANY
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTION
The following unaudited pro forma financial statements present the combined
financial position and results of operations of Callon Petroleum Company (the
"Company"). Such unaudited pro forma combined information is based on the
historical balance sheet and results of operations of Callon Petroleum Company
after giving effect to the acquisition described below.
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 in November
1997 for a net purchase price of $30.9 million. One other owner of working
interests in the properties covered by the Chevron Acquisition has the
preferential right to acquire interests in the properties, which, if exercised
could reduce the interest acquired by the Company and the purchase price up to
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.
In June 1997, Callon Petroleum Operating Company purchased a Working interest in
the Mobile Area Block Unit from Elf Exploration, Inc. (the "Elf Acquisition")
for a net purchase price of $11.8 million.
See Note 1 in the Notes to Unaudited Pro Forma Consolidated Financial
Statements for the basis of presentation of the above described events.
<PAGE>
PAGE F-9
CALLON PETROLEUM COMPANY
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
COMPANY ADJUSTMENTS AS ADJUSTED
-------- ----------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets ................................... $ 16,298 $ -- $ 16,298
Net oil and gas properties, full cost method: .... 127,296 30,900(b) 158,196
Other assets, net ................................ 12,756 -- 12,756
-------- ----------- --------
Total assets ............................. $156,350 $ 30,900 $187,250
======== =========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities .............................. $ 12,672 $ -- $ 12,672
-------- ----------- --------
Long-term debt ................................... 60,250 30,900(b) 91,150
Other liabilities ................................ 546 -- 546
Stockholders' equity ............................. 82,882 -- 82,882
-------- ----------- --------
Total liabilities and stockholders' equity $156,350 $ 30,900 $187,250
======== =========== ========
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Financial Statements
<PAGE>
PAGE F-10
CALLON PETROLEUM COMPANY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
HISTORICAL ELF CHEVRON PRO FORMA PRO FORMA
COMPANY ACQUISITION ACQUISITION ADJUSTMENTS AS ADJUSTED
------- ------ ------- -------- -------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
REVENUES:
Oil and gas sales ............................................... $25,764 $4,455(a) $14,238 $ -- $44,457
Interest and other .............................................. 946 -- -- -- 946
------- ------ ------- -------- -------
Total revenues ............................................... 26,710 4,455 14,238 -- 45,403
------- ------ ------- -------- -------
COSTS AND EXPENSES:
Lease operating expenses ....................................... 7,562 245(a) 480 -- 8,287
Depreciation, depletion
and amortization ........................................... 9,832 -- -- 7,051(d) 16,883
General and administrative...................................... 3,495 -- -- -- 3,495
Interest ....................................................... 313 -- -- 4,437(c) 4,750
------- ------ ------- -------- -------
Total costs and expenses ..................................... 21,202 245 480 11,488 33,415
------- ------ ------- -------- -------
Income from operations .......................................... 5,508 4,210 13,758 (11,488) 11,988
Income tax expense .............................................. 50 -- -- 4,146(e) 4,196
------- ------ ------- -------- -------
Net income ...................................................... 5,458 4,210 13,758 (15,634) 7,792
Preferred stock dividends ....................................... 2,795 -- -- -- 2,795
------- ------ ------- -------- -------
Net income available to
common shares ................................................ $ 2,663 $4,210 $13,758 $(15,634) $ 4,997
======= ====== ======= ======== =======
Net income per common share:
Primary .................................................... $ 0.45 $ 0.84
======= =======
Assuming full dilution$ .................................... 0.43 $ 0.81
======= =======
Shares used in computing net income per common share:
Primary .................................................... 5,952 5,952
======= =======
Assuming full dilution ..................................... 6,135 6,135
======= =======
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Financial Statements.
<PAGE>
PAGE F-11
CALLON PETROLEUM COMPANY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
HISTORICAL ELF CHEVRON PRO FORMA PRO FORMA
COMPANY ACQUISITION ACQUISITION ADJUSTMENTS AS ADJUSTED
-------- ------- ------ ------- -------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
REVENUES:
Oil and gas sales ............................................... $ 29,578 $ 1,813(a) $7,607 $ -- $38,998
Interest and other .............................................. 1,162 -- -- -- 1,162
-------- ------- ------ ------- -------
Total revenues ............................................... 30,740 1,813 7,607 -- 40,160
-------- ------- ------ ------- -------
COSTS AND EXPENSES:
Lease operating expenses........................................ 6,235 (69)(a) 86 -- 6,252
Depreciation, depletion
and amortization ........................................... 11,288 -- -- 4,110(d) 15,398
General and administrative...................................... 3,263 -- -- -- 3,263
Interest ....................................................... 945 -- -- 2,669(c) 3,614
-------- ------- ------ ------- -------
Total costs and expenses ..................................... 21,731 (69) 86 6,779 28,527
-------- ------- ------ ------- -------
Income from operations .......................................... 9,009 1,882 7,521 (6,779) 11,633
Income tax expense .............................................. 2,926 -- -- 1,146(e) 4,072
-------- ------- ------ ------- -------
Net income ...................................................... 6,083 1,882 7,521 (7,924) 7,562
Preferred stock dividends ....................................... 2,097 -- -- -- 2,097
-------- ------- ------ ------- -------
Net income available to
common shares ................................................ $ 3,986 $ 1,882 $7,521 $(7,924) $ 5,465
======== ======= ====== ======= =======
Net income per common share:
Primary .................................................... $ 0.63 $ 0.86
======== =======
Assuming full dilution...................................... $ 0.62 $ 0.80
======== =======
Shares used in computing net income per common share:
Primary .................................................... 6,332 6,332
======== =======
Assuming full dilution ..................................... 6,440 9,430
======== =======
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Financial Statements
<PAGE>
PAGE F-12
CALLON PETROLEUM COMPANY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
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.
In June 1997, Callon Petroleum Operating Company purchased a Working
interest in the Mobile Area Block Unit from Elf Exploration, Inc. (the
"Elf Acquisition") for a net purchase price of $11.8 million
The accompanying Pro Forma Consolidated Statements of Operations of the
Company for the year ended December 31, 1996 and the nine months ended
September 30, 1997 give effect to the Elf Acquisition and the Chevron
Acquisition as if the transactions occurred at the beginning of the
earliest period presented. The effect of the Elf Acquisition detailed in
the Pro Forma Consolidated Statements of Operations of the Company for the
nine months ended September 30, 1997, includes only that portion of the
Elf Acquisition up to the date of purchase. Amounts related to the Elf
Acquisition after the date of purchase are included in the operations of
the Company.
The accompanying Pro Forma Consolidated Balance Sheet at September 30,
1997 gives effect to the Chevron Acquisition and the Elf Acquisition as if
the transactions occurred on September 30, 1997.
The Pro Forma Consolidated Balance Sheet and Statements of Operations are
based on the assumptions set forth in the Notes to such statements. Such
pro forma information should be read in conjunction with the related
financial information of the Company and is not necessarily indicative of
the results which would actually have occurred had the transaction been in
effect on the date or for the period indicated or which may occur in the
future.
<PAGE>
PAGE F-13
2. PRO FORMA ADJUSTMENTS
Pro Forma entries necessary to adjust the historical financial statements
of the Company are as follows:
(a) To reflect the Elf Acquisition and the related results of operations
as described in Note 1.
(b) To reflect the Chevron Acquisition and the related results of
operations as described in Note 1.
(c) Reflects an increase of interest expense related to the purchase of
the Chevron Acquisition as if the transaction had occurred at the
beginning of the year ended December 31, 1996. The estimated
interest rate used was 8.5%. A one-eighth change in this estimated
rate would affect interest expense by $65,000 and $39,000 for the
year ended December 31, 1996 and the nine months ended September 30,
1997, respectively.
(d) To record a provision for Federal income taxes at a corporate
statutory rate of 35% on pro forma income as a result of the
acquisition
(e) To adjust depletion for the combined full cost pool based on the
purchase of the Chevron Acquisition as described in Note 1.
EXHIBIT 2.1
August 29, 1997
Callon Petroleum Operating Company
200 North Canal Street
P. O. Box 1287
Natchez, Mississippi 39121
Attention: Ms. Kathy Tilley
Re: Offer to Purchase
Mobile Blocks 863, 864, 907 and 908
Surface to 4200'
Dear Ms. Tilley:
Chevron U.S.A., Inc. (Chevron) has completed its evaluation of the referenced
property and is prepared to recommend Callon Petroleum Operating Company's
(Callon) July 10, 1997 purchase offer to management for approval. The dollar
value involved requires that we obtain the concurrence of our Executive
Committee (EXCOM) in San Francisco and we are preparing for a late September
EXCOM meeting for final approval. Any proposed transaction would be subject to
such approval as well as the execution of a mutually acceptable Asset Sale
Agreement ("ASA") between Chevron and Callon.
It is understood from your telephone conversation with Mr. Dave Fenton that
Callon's offer was to include Chevron's interest in the 12" gas gathering line
from Mobile 908 to Mobile 861. Chevron is willing to include such interest
provided that some accommodation can be reach on the following issues:
1) On occasion, Chevron has had to purchase gas from Mobile 908 as make-up gas
for our Mobile 864B facility. The ASA would provide that Chevron would
reserve the right to make such purchases from Mobile 908 in the future as
required.
2) Production from Mobile 864B currently flows northeast to shore through a
Chevron Pipeline (CPL) 12" line. Any disruption of service on this line
would require that Mobile 864B gas flow southwest to Mobile 908 through a
CPL pipeline, then into the 12" gas gathering line from Mobile 908 to
Mobile 861 and into the Chandeleur system. The ASA would provide that
Chevron would retain the right to move Mobile 864B gas through the 12" gas
gathering line at some pre-established cost.
3) Chevron currently maintains certain valving and piping at the Mobile 908
facility for CPL relative to the CPL line from Mobile 864B to Mobile 908.
The ASA would provide that Chevron and/or CPL would reserve access to the
facility for any operational or maintenance requirements on that equipment.
<PAGE>
Callon Petroleum Operating Company
August 29, 1997
Page 2
Also in your conversation with Mr. Fenton, you were informed that Chevron's
production from the field is subject to a processing and marketing agreement
with Natural Gas Clearinghouse. Any purchaser must agree to continue this
arrangement and enter into new contracts with NGC and/or Warren Petroleum
Company at closing. In order to further the process along, Chevron will provide
Callon the details of the agreements subject to the execution of the attached
confidentiality agreement. Please sign and return one copy to me.
If you have any questions, please call me at (713) 754-2430 or Mr. Fenton at
(713) 754-5090. I look forward to working with you as we move through our
approval process and, hopefully, to an ultimate closing of the transaction.
Sincerely,
Ann E. Wacker
Sr. I. and Representative
encl.
cc: Elaine Mendel-John
EXHIBIT 23.1
CONSENT OF INDEPENDANT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-29537 and 333-29529) of Callon Petroleum
Company of our report dated October 29, 1997 appearing on page F-1 of this
Current Report on Form 8-K.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
San Francisco, California
October 29, 1997
