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 June 30, 1998 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 August 3, 1998 there were 8,038,813 shares of the Registrant's Common
Stock, par value $.01 per share, outstanding.
<PAGE>
CALLON PETROLEUM COMPANY
INDEX
Page No.
Part I. Financial Information
Consolidated Balance Sheets as of June 30,
1998 and December 31, 1997 3
Consolidated Statements of Operations for the
three and six-month periods ended June 30, 1998
and June 30, 1997 4
Consolidated Statements of Cash Flows for the
six-month periods ended June 30, 1998 and
June 30, 1997 5
Notes to Consolidated Financial Statements 6-8
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-13
Part II. Other Information 14-17
<PAGE>
<TABLE>
<CAPTION>
CALLON PETROLEUM COMPANY
CONSOLIDATED BALANCE SHEETS
($ in thousands)
June 30,
1998 December 31,
(Unaudited) 1997
----------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 36,923 $ 15,597
Accounts receivable 10,824 12,168
Other current assets 1,153 723
---------- ---------
Total current assets 48,900 28,488
---------- ---------
Oil & gas properties, full cost accounting method:
Evaluated properties 393,249 398,046
Less accumulated depreciation, depletion and amortization (293,196) (282,891)
---------- ---------
100,053 115,155
Unevaluated properties excluded from amortization 51,021 35,339
---------- ---------
Total oil and gas properties 151,074 150,494
---------- ---------
Pipeline and other facilities, net 6,343 6,504
Other property and equipment, net 1,866 1,938
Deferred tax asset 247 1,248
Long-term gas balancing receivable 222 242
Other assets, net 1,271 1,507
---------- ---------
161,023 161,933
---------- ---------
Total assets $ 209,923 $ 190,421
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 10,419 $ 12,389
Undistributed oil and gas revenues 3,803 2,259
Other current liabilities 19,408 1,121
---------- ---------
Total current liabilities 33,630 15,769
Long-term debt 60,250 60,250
Other long-term liabilities 460 297
Long-term gas balancing payable 352 404
---------- ---------
Total liabilities 94,692 76,720
---------- ---------
Stockholders' equity:
Preferred stock 13 13
Common stock 80 79
Unearned compensation - restricted stock (4,166) (2,232)
Capital in excess of par value 109,340 106,433
Retained earnings 9,964 9,408
---------- ---------
Total stockholders' equity 115,231 113,701
---------- ---------
Total liabilities and stockholders' equity $ 209,923 $ 190,421
========== =========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
CALLON PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas sales $ 9,277 $ 8,370 $ 20,322 $ 20,844
Interest and other 456 388 903 695
-------- -------- -------- --------
Total revenues 9,733 8,758 21,225 21,539
-------- -------- -------- --------
Costs and expenses:
Lease operating expenses 2,148 1,756 4,089 4,164
Depreciation, depletion and amortization 4,896 3,765 10,466 7,581
General and administrative 1,230 1,351 2,732 2,382
Interest 332 99 983 210
-------- -------- -------- --------
Total costs and expenses 8,606 6,971 18,270 14,337
-------- -------- -------- --------
Income from operations 1,127 1,787 2,955 7,202
Income tax expense 380 578 1,001 2,311
-------- -------- -------- --------
Net income 747 1,209 1,954 4,891
Preferred stock dividends 699 699 1,398 1,398
-------- -------- -------- --------
Net income available to common shares $ 48 $ 510 $ 556 $ 3,493
======== ======== ======== ========
Net income per common share:
Basic $ 0.01 $ 0.08 $ 0.07 $ 0.58
======== ======== ======== ========
Diluted $ 0.01 $ 0.08 $ 0.07 $ 0.53
======== ======== ======== ========
Shares used in computing net income per common share:
Basic 8,028 6,016 8,021 6,013
======== ======== ======== ========
Diluted 8,247 6,268 8,233 9,297
======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
CALLON PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
($ in thousands)
Six Months Ended
June 30, June 30,
1998 1997
--------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,954 $ 4,891
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 10,722 7,791
Amortization of deferred costs 318 188
Deferred income tax expense 1,001 2,311
Noncash compensation related to stock plans 1,033 519
Changes in current assets & liabilities:
Accounts receivable, trade 1,344 3,020
Other current assets (430) (196)
Current liabilities 357 (1,537)
Change in gas balancing receivable 20 164
Change in gas balancing payable (52) 161
Change in other long-term liabilities -- 122
Change in other assets, net (82) (138)
--------- ---------
Cash provided by operating activities 16,185 17,296
--------- ---------
Cash flows from investing activities:
Capital expenditures (21,280) (36,214)
Cash proceeds from sale of mineral interests 10,211 2,524
Cash proceeds from sale of mineral interest burdened
by a net profits interest 19,957 --
--------- ---------
Cash used in investing activities 8,888 (33,690)
--------- ---------
Cash flows from financing activities:
Change in accrued liabilities for capital expenditures (2,453) 385
Increase in debt -- 18,500
Equity issued by conversion of stock options -- 30
Stock canceled (145) --
Sale of common stock 249 148
Dividends on preferred stock (1,398) (1,398)
--------- ---------
Cash provided by (used in) financing activities (3,747) 17,665
--------- ---------
Net increase (decrease) in cash and cash equivalents 21,326 1,271
Cash and short-term investments:
Balance, beginning of period 15,597 7,669
--------- ---------
Balance, end of period $ 36,923 $ 8,940
========= =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
CALLON PETROLEUM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998
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, 1997 included in the Company's Annual Report
on Form 10-K dated March 17, 1998.
2. Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("FAS 133"), Accounting for Derivative
Instruments and Hedging Activities. The Statement establishes accounting and
reporting standards requiring that every derivative instrument, including
certain derivative instruments embedded in other contracts be recorded in the
balance sheet as either an asset or liability measured at its fair value.
FAS 133 is effective for fiscal years beginning after June 15, 1999. A company
may also implement the Statement as of the beginning of any fiscal quarter
after issuance (that is, fiscal quarters beginning June 16, 1998 and there-
after). FAS 133 cannot be applied retroactively.
We have not yet quantified the impacts of adopting FAS 133 on our financial
statements and have not determined the timing of or method of our adoption
of FAS 133. However, the Statement could increase volatility in other
comprehensive income.
3. Earnings Per Share
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128 ("FAS 128"), Earnings Per Share, which generally simplified the manner
in which earnings per share are determined. The Company adopted FAS 128
effective December 15, 1997. In accordance with FAS 128, the Company's
previously reported earnings per share for 1997 was restated.
Basic earnings per common share were computed by dividing net income by the
weighted average number of shares of common stock outstanding during the
quarter. Diluted earnings per common share for the three and six month
periods ended June 30, 1998 and 1997 were determined on a weighted average
basis using common shares issued and outstanding adjusted for the effect of
stock options considered common stock equivalents computed using the treasury
stock method and the effect of the convertible preferred stock (if dilutive).
<PAGE>
A reconciliation of the basic and diluted earnings per share computation is as
follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
(a) Net income available for common stock $ 48 $ 510 $ 556 $ 3,493
Preferred dividends assuming conversion
of preferred stock (if dilutive) $ -- $ -- $ -- $ 1,398
(b) Income available for common stock assuming
conversion of preferred stock (if dilutive) $ 508 $ 510 $ 556 $ 4,891
(c) Weighted average shares outstanding 8,028 6,016 8,021 6,013
Dilutive impact of stock options 219 252 212 294
Convertible preferred stock (if dilutive) -- -- -- 2,990
(d) Total diluted shares 8,247 6,268 8,233 9,297
Basic earnings per share (a/c) $ 0.01 $ 0.08 $ 0.07 $ 0.58
Diluted earnings per share (b/d) $ 0.01 $ 0.08 $ 0.07 $ 0.53
The conversion of the preferred stock (convertible into 2,990,132 shares of common stock)
was not included in the diluted calculation for the three months ended June 30, 1998,
and 1997 and for the six month period ended June 30, 1998, due to its antidilutive effect
on diluted earnings per share.
</TABLE>
4. Net Profits Interest
During May 1998, the Company completed the sale of an oil and gas property
burdened by a net profits interest. The owner of the net profits interest
is due approximately $19.9 million as a result of this sale and this amount
due is included in the Company's cash and cash equivalents and current
liabilities at June 30, 1998.
5. Hedging Contracts
The Company periodically uses derivative financial instruments to manage oil
and gas price risks. Settlements of gains and losses on commodity price swap
contracts are generally based upon the difference between the contract price
or prices specified in the derivative instrument and a NYMEX price or other
cash or futures index price, and are reported as a component of oil and gas
revenues. Gains or losses attributable to the termination of a swap contract
are deferred and recognized in revenue when the oil and gas is sold.
As of June 30, 1998, the Company had open collar contracts with third parties
whereby minimum floor prices and maximum ceiling prices are contracted and
applied to related contract volumes. These agreements in effect for 1998
are for average gas volumes of 662,500 Mcf per month through October of 1998
at (on average) a ceiling price of $2.67 and floor of $2.29. In addition, the
Company had oil open collar contracts for 12,500 barrels per month from July
1998 through June of 1999 at a ceiling price of $18.00 and a floor of $14.50.
Also at June 30, 1998 the Company had open forward sales position natural gas
contracts of (on average) 200,000 Mcf per month from April of 1999 through
September of 1999 at a fixed contract price of $2.35.
For the six months ending June 30, 1998, $763,000 of net revenue was recognized
as a result of the Company's hedging activities.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
This report includes "forward-looking statements" within the meaning of Section
21E of the Securities Exchange Act of 1934. All statements other than state-
ments of historical fact included in this report regarding the Company's
financial position, estimated quantities, reserves, business strategy, plans
and objectives for future operations and covenant compliance, are forward-
looking statements. Although the Company believes that the assumptions upon
which such forward-looking statements are based are reasonable, it can give
no assurances that such assumptions will prove to have been correct. Important
factors that could cause actual results to differ materially from the Company's
expectations include the results of and dependence on exploratory drilling
activities, operating risks, regulatory and environmental matters, capital
requirements and availability, dependence on key personnel, oil and gas price
levels, availability of drilling rigs, weather, land issues and other risks
described in the Company's filings with the Securities and Exchange Commission
("Cautionary Statements"). The Cautionary Statements expressly qualify all
subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf.
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.
Volatile oil and gas prices make it difficult to estimate the value of producing
properties for acquisition and often cause disruption in the market for oil and
gas producing properties, as buyers and sellers have difficulty agreeing on
such value. Price volatility also makes it difficult to budget for and project
the return on acquisitions, exploration and development projects.
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 six-month periods ended June 30, 1998 and 1997. 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 six months
ending June 30, 1998 totaled $16.2 million. Other sources of cash during the
first six months were $30.2 million of which approximately $19.9 million is
payable to the owner of a net profits interest. During the first half of 1998,
capital expenditures $21.3 million and $1.4 million was paid as dividends to the
preferred stockholders. The balance of the available funds were retained for
future operating expenses and potential drilling and acquisition opportunities.
At June 30, 1998, the Company had working capital of $15.3 million and a
current ratio of 1.5 to 1.
<PAGE>
The Company has budgeted up to $85 million in capital expenditures for 1998.
During the first six months of 1998, the Company has expended approximately
$11.6 million on drilling and development activities, $4.4 million in
acquisitions of undeveloped mineral interests and seismic information
attributable to future drilling sites and $5.3 million for other associated
costs. For the balance of the year, the Company will continue evaluating
producing property acquisitions and drilling opportunities. The major
portion of the remaining capital expenditure budget will be used for
exploratory and development activities. The capital budget will be financed
with the sale of debt securities, projected cash flow from operations and
unused borrowings under the Company's Credit Facility.
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 Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Production:
Oil (MBbls) 82 108 193 237
Gas (MMcf) 3,640 3,057 7,676 6,448
Total production (MMcfe) 4,129 3,707 8,835 7,869
Average sales price:
Oil (per Bbl) $ 11.98 $ 17.30 $ 13.06 $ 19.36
Gas (per Mcf) 2.28 2.13 2.32 2.52
Total production (per Mcfe) 2.25 2.26 2.30 2.65
Average costs (per Mcfe):
Lease operating (excluding severance taxes) $ 0.46 $ 0.39 $ 0.39 $ 0.43
Severance taxes 0.06 0.08 0.07 0.09
Depreciation, depletion and amortization 1.19 1.02 1.18 0.96
General and administrative
(net of management fees) 0.30 0.36 0.31 0.30
</TABLE>
Comparison of Results of Operations for the Three Months Ended June 30, 1998
and the Three Months Ended June 30, 1997.
Oil and Gas Production and Revenues
Total oil and gas revenues increased 11% from $8.4 million in 1997 to $9.3
million. While oil production and prices were lower, gas revenues increased
28% and gas production increased 19% when compared to the same period last
year.
Oil production during the second quarter of 1998 totaled 82,000 barrels and
generated $1.0 million in revenues compared to 108,000 barrels and $1.9 million
in revenues for the same period in 1997. Second quarter average daily
production decreased from 1,190 barrels per day in 1997 to 896 barrels per day
in 1998. Average oil prices received in the second quarter of 1998 were $11.98
compared to $17.30 in 1997. Decreased production in the second quarter of 1998
is largely attributable to the sale of Black Bay in May 1998.
Gas production during the second quarter of 1998 totaled 3.6 billion cubic feet
and generated $8.3 million in revenues compared to 3.1 billion cubic feet and
$6.5 million in revenues during the same period in 1997. The average sales
<PAGE>
price for the second quarter of 1998 averaged $2.28 per thousand cubic feet
compared to $2.13 per thousand cubic feet at this time last year. When
compared to the same quarter last year, the Company had increased gas production
by 11%. Production increases as a result of acquisitions, a new discovery and
the recompletion of an existing well were partially offset by expected
production declines in the other properties.
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
June 30, June 30,
1998 1997 1998 1997
----- ----- ----- -----
Mobile Block 864 Area -- -- 1,006,000 --
Chandeleur Block 40 -- -- 682,000 1,078,000
Main Pass 163 -- -- 531,000 1,206,000
Mobile Block 952/953 -- -- 384,000 --
Main Pass 31 11,000 -- 304,000 --
Main Pass 164/165 -- -- 305,000 139,000
North Dauphin Island Field -- -- 180,000 368,000
Black Bay 17,000 46,000 -- --
Escambia Mineral properties 37,000 43,000 61,000 69,000
Other properties 17,000 19,000 187,000 197,000
------ ------- --------- ---------
Total 82,000 108,000 3,640,000 3,057,000
====== ======= ========= =========
Lease Operating Expenses
Lease operating expenses, excluding severance taxes, for the three-month period
ending June 30, 1998 were $1.9 million compared to $1.4 million for the same
period in 1997. This increase is associated with the producing properties which
were acquired during the second half of 1997. Severance taxes for the second
quarter of 1998 and 1997 were $0.3 million and $0.4 million, respectively.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization for the three months ending June 30,
1998 and 1997 was $4.9 million and $3.8 million, respectively, reflecting the
increase in the rate per Mcf equivalent and increased production volumes.
General and Administrative
General and administrative expense for the three months ended June 30, 1998
was $1.2 million compared to $1.4 million for the three months ended June 30,
1997.
Interest Expense
Interest expense increased from $99,000 during the three months ended June 30,
1997 to $332,000 during the three months ended June 30, 1998 reflecting the
increase in the Company's long-term debt.
<PAGE>
Comparison of Results of Operations for the Six Months Ended June 30, 1998
and the Six Months Ended June 30, 1997.
Oil and Gas Production and Revenues
For the six months ended June 30, 1998, total oil and gas revenues decreased
by $.5 million, or 3%, to $20.3 million when compared to $20.8 million for
the same period in 1997.
For the six months ending June 30, 1998, oil production and oil revenues
decreased to 193,000 barrels and $2.5 million, respectively. For the
comparable period in 1997, oil production was 237,000 barrels while
revenues totaled $4.6 million. Oil prices during the first six months of
1998 averaged $13.06, compared to $19.36 for the same period in 1997.
Natural gas production and revenue for the six-month period ending June 30,
1998 were 7.7 billion cubic feet and $17.8 million, respectively, increasing
from 6.4 billion cubic feet and gas revenues of $16.3 million in the first
six months of 1997. The average sales price for natural gas in the first six
months in 1998 was $2.32 per Mcf, a $0.20 per Mcf decrease over the same period
in 1997. When compared to the six-month period last year, the Company had
a net increase in gas production of 12%. Production increases as a result of
acquisitions, a new discovery and the recompletion of an existing well were
partially offset by expected production declines in the other properties.
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)
Six Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
----- ----- ----- -----
Mobile Block 864 Area -- -- 2,151,000 --
Chandeleur Block 40 -- -- 1,461,000 2,251,000
Main Pass 163 -- -- 1,190,000 2,477,000
Mobile Block 952/953 -- -- 753,000 --
Main Pass 31 27,000 -- 648,000 --
Main Pass 164/165 -- -- 616,000 270,000
North Dauphin Island Field -- -- 403,000 826,000
Black Bay 57,000 93,000 -- --
Escambia Mineral properties 80,000 94,000 135,000 152,000
Other properties 29,000 50,000 319,000 472,000
------- ------- --------- ---------
Total 193,000 237,000 7,676,000 6,448,000
======= ======= ========= =========
Lease Operating Expenses
Lease operating expenses, excluding severance taxes, for the first half of 1998
increased by 2% to $3.5 million from $3.4 million for the 1997 comparable
period. This increase is primarily the result of expenses associated with
the new producing properties. Severance taxes decreased by 24% to $0.6 million
during the first six months of 1998 from $0.7 million for the same period in
1997 as a result of production declines in the Company's onshore properties,
property sales and lower oil and gas sales prices.
<PAGE>
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization for the first six months of 1998 was
$10.5 million, or $1.18 per Mcf equivalent. For the same period in 1997, the
total was $7.6 million and $0.96 per Mcf equivalent. This increase is the
result of an increased rate per Mcf equivalent and increased production.
General and Administrative
During the first six months of 1998, general and administrative expenses
increased by 15% to $2.7 million compared to $2.4 million for the six-month
period in 1997. Increased executive compensation expenses and the loss of
management fees, as a result of property sales, combined to produce this
overall increase.
Interest Expense
Interest expense during the first half of 1998 was $983,000 and compares to
$210,000 for the first half of 1997. This increase is 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.
The Company's annual meeting was held on May 28, 1998, at which three Class I
directors were elected and the appointment of Arthur Andersen LLP as the
Company's independent public accountants for the year ending December 31, 1998
was ratified.
The nominees for director were Messrs. Robert A. Stanger, John C. Wallace and
Richard O. Wilson. Mr. Stanger received 6,654,043 votes for, 13,170 votes
against or withheld and no votes abstained. Mr. Wallace received 6,559,469
votes for, 7,744 votes against or withheld and no votes abstained. Mr. Wilson
received 6,559,471 votes for, 7,742 votes against or withheld and no votes
abstained.
The ratification of Arthur Andersen LLP received 6,557,624 votes for, 4,296
votes against or withheld and 5,293 votes abstained.
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)
<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)
9. Voting trust agreement*
10. Material contracts
10.1 Contingent Share Agreement dated September 16, 1996 between
the Company and the Callon Stockholders (incorporated by
reference from Exhibit 10.1 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 NOCO Enterprises, L. P. (incorp-
orated by reference from Exhibit 10.2 of the Company's
Registration Statement on Form 8-B filed October 3, 1994)
10.3 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)
10.4 Employment Agreement dated September 16, 1994 between the
Company and Fred L. Callon (incorporated by reference from
Exhibit 10.4 of the Company's Registration Statement on
Form 8-B filed October 3, 1994)
10.5 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)
10.6 Employment Agreement effective January 1, 1995, between the
Company and Dennis W. Christian (incorporated by reference
from Exhibit 10.6 of the Company's Form 10-K for the period
ended December 31, 1995)
10.7 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)
10.8 Employment Agreement effective January 1, 1995, between the
Company and John S. Weatherly (incorporated by reference
from Exhibit 10.8 of the Company's Registration Statement
on Form S-1, Reg. No. 33-96700)
10.9 Third Amendment dated February 22, 1996, to Credit Agree-
ment by and among Callon Petroleum Operating Company, Callon
Petroleum Company and Internationale Nederlanden (U.S.)
Capital Corporation (incorporated by reference from Exhibit
10.9 of the Company's report on Form 10-K for the period
ended December 31, 1995)
<PAGE>
10.10 Consulting Agreement between the Company and John S. Callon
dated June 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)
10.11 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)
10.12 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)
10.13 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)
10.14 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)
10.15 Callon Petroleum Company 1996 Stock Incentive Plan
(incorporated by reference from Exhibit 4.2 of the
Company's Registration Statement on Form S-8, Reg. No.
333-29537)
10.16 Callon Petroleum Company 1997 Employee Stock Purchase Plan
(incorporated by reference from Exhibit 4.2 of the
Company's Registration Statement on Form S-8, Reg. No.
333-29529)
11. Statement re computation of per share earnings*
15. Letter re unaudited interim financial information*
18. Letter re change in accounting principles*
19. Report furnished to security holders*
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.
None.
* 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 August 12, 1998 By /s/ John S. Weatherly
John S. Weatherly, Senior Vice President,
Chief Financial Officer and Treasurer
<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 ENDING JUNE 30, 1998 WHICH ARE PRESENTED IN ITS QUARTERLY REPORT ON FORM
10Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 36,923
<SECURITIES> 0
<RECEIVABLES> 10,824
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,153
<PP&E> 452,479
<DEPRECIATION> 293,196
<TOTAL-ASSETS> 209,923
<CURRENT-LIABILITIES> 33,630
<BONDS> 0
0
13
<COMMON> 80
<OTHER-SE> 115,138
<TOTAL-LIABILITY-AND-EQUITY> 209,923
<SALES> 20,322
<TOTAL-REVENUES> 21,225
<CGS> 0
<TOTAL-COSTS> 17,287
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 2,955
<INCOME-TAX> 1,001
<INCOME-CONTINUING> 1,954
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,954
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
