Natchez, MS (May 10, 2000)-Fred L. Callon, president and chief executive officer, and John S. Weatherly, senior vice president and chief financial officer, Callon Petroleum Company (NYSE: CPE/CPE.PrA), provided comments regarding 2000 first and second quarter activities to the investment community during a conference call this morning. A summarization of their remarks follows.
First Quarter 2000
- Callon reported net income of $1,164,000. After preferred stock dividends, this represented earnings of $0.05 per diluted share.
- Oil and gas revenues for the first quarter totaled $9.5 million, an increase of 19 percent from $8 million in the first quarter of last year. This increase was the result of higher prices for both crude oil and natural gas.
- For the quarter, natural gas represented 90 percent of Callon's production. Natural gas prices averaged $2.52 per thousand cubic feet (Mcf), a 22 percent increase from the same period of last year. Total natural gas sales increased by 13 percent from last year's level.
- Oil prices were up by an even larger margin. Although oil represented only 10 percent of the company's production stream, it generated 17 percent of Callon's total oil and gas revenues. The company's realized oil prices averaged $26.42 per barrel in the first quarter of 2000. This was more than double the $11.49 per barrel realized in the first quarter of last year. As a result, total crude oil sales increased by 55 percent.
- In March, Callon acquired a 20 percent working interest in two Gulf of Mexico deepwater prospects, Entrada and Cirrus, located on Garden Banks Blocks 782/785/826/827.
Second Quarter 2000
- In early April, the South Marsh Island Block 261 #3 discovery well encountered 65 feet of net pay (true vertical thickness) in a total of three pay zones.
- In late April a fourth well being drilled to test the deepwater Medusa discovery on Mississippi Canyon Blocks 538/582 encountered three reservoirs totaling over 250 feet (true vertical thickness) of net oil pay.
- Also in late April, a deepwater exploratory well testing the Entrada Prospect on Garden Banks Block 782 encountered over 360 net feet of pay in four intervals.
- Earlier this month the company reported its South Marsh Island Block 261 #4 discovery well encountered 165 feet of net pay (true vertical thickness) in a total of four pay zones.
- Natural gas prices for the second quarter should, in all likelihood, average between $3.05 and $3.10 per Mcf. This estimated price increase should be at least $0.50 per Mcf ahead of first quarter pricing levels for this year. Callon expects natural gas to remain at close to 90% of its total production.
- Average daily production should increase significantly. The company's East Cameron Block 275 discovery well was placed online in early April and is producing approximately 7.5 million cubic feet of natural gas (MMcf ) and 125 barrels of oil (Bo) daily net to Callon. More importantly, the discovery wells at South Marsh Island Block 261 are expected to begin coming online as early as next week. By June, these wells should be producing between 18 and 20 MMcf per day net to the company's interest. The combined effect should be an increase in production to above 60 million cubic feet of natural gas equivalent (MMcfe) per day, which should be sufficient to raise the average for the entire second quarter to over 50 MMcfe per day.
Callon Petroleum Company has been engaged in the exploration, development, acquisition and operation of oil and gas properties in the Gulf Coast region since 1950.
This news release contains projections and other forward- looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These projections and statements reflect the company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors.
For further information contact: Terry Trovato P.O. Box 1287 Natchez, MS 39121 (601) 442-1601terryt@callon.com