<PAGE>
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 March 31, 1999 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 May 10, 1999, there were 8,545,517 shares of the Registrant's
Common Stock, par value $0.01 per share, outstanding.
<PAGE>
CALLON PETROLEUM COMPANY
INDEX
Page No.
Part I. Financial Information
---------------------
Consolidated Balance Sheets as of March 31,
1999 and December 31, 1998 3
Consolidated Statements of Operations for the
three-month periods ended March 31, 1999 and
March 31, 1998 4
Consolidated Statements of Cash Flows for the
three-month periods ended March 31, 1999 and
March 31, 1998 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-11
Part II. Other Information 12
<PAGE>
CALLON PETROLEUM COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,150 $ 6,300
Accounts receivable 5,688 6,024
Other current assets 1,648 1,924
--------- ---------
Total current assets 11,486 14,248
--------- ---------
Oil and gas properties, full cost accounting method:
Evaluated properties 462,871 444,579
Less accumulated depreciation, depletion and amortization (349,236) (345,353)
--------- ---------
113,635 99,226
Unevaluated properties excluded from amortization 38,328 42,679
--------- ---------
Total oil and gas properties 151,963 141,905
--------- ---------
Pipeline and other facilities, net 6,102 6,182
Other property and equipment, net 1,676 1,753
Deferred tax asset 16,105 16,348
Long-term gas balancing receivable 191 199
Other assets, net 934 1,017
--------- ---------
Total assets $ 188,457 $ 181,652
========= =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
CALLON PETROLEUM COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
----------- ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 8,673 $ 11,257
Undistributed oil and gas revenues 1,874 1,720
Accrued net profits interest payable 363 129
--------- ---------
Total current liabilities 10,910 13,106
Accounts payable and accrued liabilities to be refinanced 5,981 3,000
Long-term debt 86,250 78,250
Accrued retirement benefits 2,269 2,323
Long-term gas balancing payable 317 489
--------- ---------
Total liabilities 105,727 97,168
--------- ---------
Stockholders' equity:
Preferred stock, $0.01 par value, 2,500,000 shares
authorized; 1,045,461 shares of Convertible Exchangeable
Preferred Stock, Series A, issued and outstanding with a
liquidation preference of $26,136,525 at March 31, 1999 10 13
Common stock, $0.01 par value, 20,000,000 shares authorized;
8,545,517 and 8,178,406 outstanding at March 31, 1999 and
at December 31, 1998, respectively 85 82
Treasury stock (98,577 shares at cost) (1,177) (915)
Capital in excess of par value 108,296 109,429
Retained earnings (deficit) (24,484) (24,125)
--------- ---------
Total stockholders' equity 82,730 84,484
--------- ---------
Total liabilities and stockholders' equity $ 188,457 $ 181,652
========= =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
CALLON PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
----------------------
March 31, March 31,
1999 1998
--------- ---------
<S> <C> <C>
Revenues:
Oil and gas sales $ 7,969 $ 11,045
Interest and other 405 447
-------- --------
Total revenues 8,374 11,492
-------- --------
Costs and expenses:
Lease operating expenses 1,608 1,941
Depreciation, depletion and amortization 3,963 5,570
General and administrative 1,061 1,502
Interest 1,027 651
-------- --------
Total costs and expenses 7,659 9,664
-------- --------
Income from operations 715 1,828
Income tax expense 243 621
-------- --------
Net income 472 1,207
Preferred stock dividends 831 699
-------- --------
Net income (loss) available to common shares $ (359) $ 508
======== ========
Net income (loss) per common share:
Basic $ (.04) $ .06
Diluted $ (.04) $ .06
Shares used in computing net income (loss)
per common share:
Basic 8,477 8,015
Diluted 8,477 8,221
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
CALLON PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
March 31, March 31,
1999 1998
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 472 $ 1,207
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 4,093 5,697
Amortization of deferred costs 141 164
Deferred income tax expense 243 621
Noncash compensation related to compensation plans 140 634
Changes in current assets and liabilities:
Accounts receivable 336 1,946
Other current assets 276 (1,004)
Current liabilities (2,462) (65)
Change in gas balancing receivable 8 (23)
Change in gas balancing payable (172) 52
Change in other long-term liabilities (52) --
Change in other assets, net (58) (82)
--------- ---------
Cash provided (used) by operating activities 2,965 9,147
--------- ---------
Cash flows from investing activities:
Capital expenditures (13,884) (12,736)
Cash proceeds from sale of mineral interests 154 339
--------- ---------
Cash provided (used) by investing activities (13,730) (12,397)
--------- ---------
Cash flows from financing activities:
Increase in accounts payable and accrued liabilities to
be refinanced 2,981 --
Increase in debt 8,000 --
Equity issued related to employee stock plans 66 171
Purchase of treasury shares (262) --
Common stock canceled (1,615) (145)
Dividends on preferred stock (555) (699)
--------- ---------
Cash provided (used) by financing activities 8,615 (673)
--------- ---------
Net increase (decrease) in cash and cash equivalents (2,150) (3,923)
Cash and cash equivalents:
Balance, beginning of period 6,300 15,597
--------- ---------
Balance, end of period $ 4,150 $ 11,674
========= =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
CALLON PETROLEUM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
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, 1998 included in the Company's Annual Report
on Form 10-K dated March 29, 1999.
2. Per Share Amounts
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.
Basic earnings or loss per common share were computed by dividing
net income or loss by the weighted average number of shares of
common stock outstanding during the quarter. Diluted earnings per
common share for the three months ended March 31, 1998 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). In the
1999 quarterly earnings per share computations, all stock options were
excluded from the computation of diluted loss per share because they
were antidilutive. The conversion of the preferred stock was not
included in any calculation due to their antidilutive effect on diluted
income or loss per share.
A reconciliation of the basic and diluted earnings per share computation
is as follows (in thousands, except per share amounts):
Three Months
Ended March 31,
-------------------
1999 1998
-------- -------
(a) Net income or loss available for common stock $ (359) $ 508
(b) Weighted average shares outstanding 8,477 8,015
(c) Dilutive impact of stock options -- 206
(d) Total diluted shares 8,477 8,221
Basic earnings per share (a/b) $ (0.04) $ 0.06
Diluted earnings per share (a/d) $ (0.04) $ 0.06
3. 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
<PAGE>
instrument and a NYMEX 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. Approximately $1,004,000 and $583,000 was recognized
as additional oil and gas revenue in the first quarter of 1999 and 1998,
respectively.
As of March 31, 1999, 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 1999 are for average gas volumes of 483,333
Mcf per month through September 1999 at (on average) a ceiling price
of $2.12 and floor price of $1.85. In addition, the Company had open
oil collar contracts averaging 24,167 barrels per month at (on average) a
ceiling of $16.15 and a floor of $13.78 from April 1999 through
December 1999.
Also at March 31, 1999 the Company had open forward natural gas
swap contracts of 200,000 Mcf per month from April 1999 through
September, 1999 with a fixed contract price of $2.35. In addition, the
Company had open forward crude oil swap contracts of 10,000 barrels
per month with a fixed contract price of $14.10 per month from April
1999 through June 1999.
4. Preferred Stock
During the first quarter of 1999 certain preferred stockholder's through
private transactions, agreed to convert 210,350 shares of Preferred
Stock into 502,632 shares of the Company's Common Stock. Any
premium negotiated in excess of the conversion rate was recorded as
additional preferred stock dividends.
<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
statements of historical facts included in this report regarding the Company's
financial position, adequacy of resources, estimated reserve quantities,
business strategies, plans, objectives and expectations for future operations
and covenant compliance, are forward-looking statements. The Company can give
no assurances that the assumptions upon which such forward-looking statements
are based will prove to have been correct. Important factors that could cause
actual results to differ materially from the Company's expectations
("Cautionary Statements") are disclosed below and elsewhere in this report and
from time to time in other filings made by the Company with the Securities and
Exchange Commission. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified by the Cautionary Statements.
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 and its ability to find, develop and acquire additional oil and
gas reserves that are economically recoverable. The Company's ability to
maintain or increase its borrowing capacity and to obtain additional capital
on attractive terms is also influenced by oil and gas prices. Prices for oil
and gas are subject to large fluctuations 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. These
factors include weather conditions in the United States, the condition of
the United States economy, the actions of the Organization of Petroleum
Exporting Countries, governmental regulations, political stability in the
Middle East and elsewhere, the foreign supply of oil and gas, the price of
foreign imports and the availability of alternate fuel sources. 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 Company uses derivative financial instruments for price protection
purposes on a limited amount of its future production and does not
use them for trading purposes.
The Company's revenues are derived from the sale of its crude oil and natural
gas production. From time to time, the Company has entered into hedging
transactions that lock in for specified periods the prices the Company will
receive for the production volumes to which the hedge relates. The hedges
reduce the Company's exposure on the hedged volumes to decreases in
commodities prices and limit the benefit the Company might otherwise have
received from any increases in commodities prices on the hedged volumes.
There have been no significant changes in market risks faced by the Company
since the end of 1998.
The following discussion is intended to assist in an understanding of the
Company's historical financial position and results of operations. 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 flows from operations
and borrowings. Net cash and cash equivalents decreased during the three
months ending March 31, 1999 by $2.2 million. Net cash flow from
operations before working capital changes for the quarter totaled $5.1
million. During the three-month period, $8.0 million was borrowed against
<PAGE>
the credit facility and $3.0 million was provided by the increase in
accounts payable and accrued liabilities to be refinanced. In addition,
$1.6 million was expended to repurchase common stock previously issued
under performance share awards pursuant to the Company's Stock Incentive
Plans. Net capital expenditures for the period totaled $14.0 million.
These funds were expended in drilling and completion of four wells and
the completion of two additional wells.
At March 31, 1999, the Company had a working capital of $0.6 million and a
current ratio of 1.1 to 1.
For the balance of the year, the Company will continue evaluating property
acquisitions and drilling opportunities. The Company has budgeted up to $55
million in capital expenditures for 1999. The major portion of the capital
expenditure budget will be used to drill development and exploratory wells to
replace current production and increase total proved reserves for the Company.
The capital budget will be financed with available cash, projected cash flow
from operations and unused capacity under the Company's Credit Facility.
Comparison of Results of Operations for the Three Months Ended March
31, 1999 and the Three Months Ended March 31, 1998.
Results of Operations
The following table sets forth certain unaudited operating information with
respect to the Company's oil and gas operations for the periods indicated.
Three Months Ended
March 31,
1999 1998
Production volumes:
Oil (MBbls) 90 112
Gas (MMcf) 3,369 4,036
Total (MMcfe) 3,909 4,706
Average sales price:
Oil (per Bbl) $ 11.49 $ 13.85
Gas (per Mcf) 2.06 2.35
Total (per Mcfe) 2.04 2.35
Average costs (per Mcfe):
Lease operating (excluding severance taxes) $ 0.35 $ 0.34
Severance taxes 0.06 0.07
Depreciation, depletion and amortization 1.01 1.18
General and administrative
(net of management fees) 0.27 0.32
<PAGE>
The following table summarizes oil and gas production for the comparable
periods.
Oil Production Gas Production
(Barrels) (Mcf)
Three Months Ended Three Months Ended
March 31, March 31,
------------------ ----------------------
1999 1998 1999 1998
----- ------ --------- ---------
Mobile Block 864 Area -- -- 1,263,000 1,514,000
Chandeleur Block 40 -- -- 303,000 779,000
Main Pass 163 Area -- -- 528,000 970,000
Main Pass 31 16,000 16,000 478,000 344,000
Eugene Island 335 5,000 -- 190,000 --
Black Bay -- 40,000 -- --
Escambia Mineral properties 37,000 42,000 67,000 74,000
Other properties 15,000 14,000 162,000 132,000
------ ------- --------- ---------
Total 90,000 112,000 3,369,000 4,036,000
====== ======= ========= =========
Oil and Gas Production and Revenues
Total oil and gas revenues decreased 28% from $11.0 million in the first
quarter of 1998 to $8.0 million in 1999.
Oil production during the first quarter of 1999 totaled 90,000 barrels and
generated $1.0 million in revenues compared to 112,000 barrels and $1.5
million in revenues for the same period in 1998. The first quarter average
daily oil production decreased from 1,240 barrels per day in 1998 to 1,000
barrels per day in 1999. Average oil prices received in 1999 were $11.49
compared to $13.85 in 1998. Oil production volumes for 1999 included
approximately 22,000 barrels of oil from our discoveries at Main Pass 26
and Eugene Island 335 and reflect the loss of approximately 40,000 barrels
attributable to the sale of Black Bay. Other properties experienced a natural
decline in production. The loss in revenues was a result of a 17% reduction
in the average sales price received and a 20% lower production volume.
Gas production volumes during the first quarter of 1998 totaled to 4.0 billion
cubic feet and generated $9.5 million in revenues compared to 3.4 billion cubic
feet and $6.9 million in revenues during the same period in 1999. The first
quarter average daily gas production decreased from 44.8 million cubic feet per
day in 1998 to 37.4 million cubic feet per day in 1999. The average sales
price for the first quarter of 1999 averaged $2.06 per thousand cubic feet
compared to $2.35 per thousand cubic feet at this time last year. Production
volumes at the Chandeleur Block 40, North Dauphin Island Field and Mobile
Block 864 Area continue to follow their expected decline curves. The
combination of a 17% reduction in production volumes and a 12% reduction
in the average sales price resulted in the 26% decrease in revenues.
Lease Operating Expenses
Lease operating expenses, including severance taxes, for the three-month
period ending March 31, 1999 were $1.6 million, a decrease from the $1.9
million as of March 31, 1998. On a per Mcf equivalent basis these combined
expenses remained at $0.41 as a result of lower production volumes and
proportionate decreases in field operating costs.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization for the three months ending March
31, 1999 and 1998 were $4.0 million and $5.6 million, respectively. This
decrease reflects decreased production volumes and a lower overall rate per
<PAGE>
Mcfe, primarily as a result of the fourth quarter 1998 full-cost ceiling
impairment. For the three month period ending March 31, 1999, the per Mcf
equivalent amount was $1.01 and compares to $1.18 for the same period in
1998.
General and Administrative
General and administrative expenses as of March 31, 1999 were $1.0 million
compared to $1.5 million as of March 31, 1998. First quarter 1999 expenses
did not include any charges for bonuses under the incentive compensation plan
nor amortization of expenses associated with the vesting of performance shares.
On a per Mcf equivalent basis, general and administrative expenses decreased
from $0.32 in the first quarter of 1998 to $0.27 in the current quarter.
Interest Expense
Interest expense for the current period increased as a result of increased
long-term debt when compared to the first quarter debt level in 1998. For
the period ending March 31, 1999, interest expense was $1.0 million and
compares to $.7 million for the first quarter of 1998, net of interest
capitalized as property costs.
Income Taxes
Income taxes were provided at the expected statutory rate of 34% of net
income.
<PAGE>
CALLON PETROLEUM COMPANY
PART II. OTHER INFORMATION
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 of 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 Common 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)
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 Certification 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)
10. Material contracts
10.1 Contingent Share Agreement dated September 16, 1994 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
<PAGE>
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)
10.3 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 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)
10.5 Credit Agreement dated October 14, 1994 by and between the
Company, Callon Petroleum Operating Company and Inter-
nationale Nederlanden (U.S.) Capital Corporation (incorpor-
ated by reference from Exhibit 99.1 of the Company's Report
on Form 10-Q for the quarter ended September 30, 1994)
10.6 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 of the Company's report on Form 10-K for the period
ended December 31, 1995)
10.7 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)
10.8 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)
10.9 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)
10.10 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)
10.11 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)
10.12 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)
10.13 Callon Petroleum Company 1997 Stock Incentive Plan
(incorporated by reference from Exhibit 4.2 of the Company's
Registration Statement on Form S-8, Reg. No. 333-29537)
11. Statement re computation of per share earnings
11.1 Computation of Per Share Earnings
15. Letter re unaudited interim financial information*
<PAGE>
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
On February 3, 1999 the Company filed a Form 8-K
with the Securities and Exchange Commission in which
it was announced that the Company anticipated its 1998
earnings would be reduced by an after-tax, non-cash
charge of approximately $30 million as a result of a
ceiling test impairment.
On March 3, 1999 the Company filed a Form 8-K with
the Securities and Exchange Commission which
included a press release dated February 26, 1999 that
announced that the Company was participating in a
deepwater discovery at the Habanero prospect at Garden
Banks Block 341. The well was drilled to a total depth
of 21,158 feet and encountered over 200 net feet of pay
in two zones. Callon owns an 11.25 percent working
interest.
____________
* 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: May 10, 1999 By /s/ John S. Weatherly
----------------------
John S. Weatherly, Senior Vice
President, Chief Financial Officer
and Treasurer
<PAGE>
Exhibit 11.1
Callon Petroleum Company
Computation of Per Share Earnings
(In thousands, except per share data)
Three Months Ended
March 31,
------------------
1999 1998
------ -------
Net income $ 472 $ 1,207
Preferred stock dividends 831 699
------ -------
Net income (loss) available to
common shares $ (359) $ 508
====== =======
Net income (loss) per common share:
Basic $(0.04) $ 0.06
Diluted (0.04) 0.06
Shares used in computing net income
(loss) per common share:
Basic 8,477 8,015
Dilutive impact of stock options -- 206
----- -----
Diluted 8,477 8,221
===== =====
Note: Basic earnings or loss per common share were computed by dividing
net income or loss by the weighted average number of shares of common
stock outstanding during the quarter. Diluted earnings per common share
for the three months ended March 31, 1998 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). In the 1999 quarterly earnings per share computations,
all stock options were excluded from the computation of diluted loss per
share because they were antidilutive. The conversion of the preferred
stock was not included in any calculation due to their antidilutive effect
on diluted income or loss per share.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF CALLON PETROLEUM COMPANY FOR THE
PERIOD ENDING MARCH 31, 1999 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 4,150
<SECURITIES> 0
<RECEIVABLES> 5,688
<ALLOWANCES> 0
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0
10
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</TABLE>
