For further information contact

John S. Weatherly, CFO   1-800-451-1294

 

FOR IMMEDIATE RELEASE

 

Callon Petroleum Company Reports Record Results For Second Quarter, First Six Months of 2004

     

      Natchez, MS (August 9, 2004)—Callon Petroleum Company (NYSE: CPE/CPE.PrA) today reported record results of operations for both the quarter and the six-month period ended June 30, 2004.  The results were attributable to strong prices realized for crude oil and natural gas, and substantial increases in production when compared to the same periods last year.  

 

      Results for the three-month period ended June 30, 2004 include an increase in net income to $9.7 million, or $0.58 per diluted share. This compares to a net loss of $647,000, or $0.07 per share on a diluted basis, for the same period in 2003. 

 

Operating results for the three-month period ended June 30, 2004 include oil and gas sales of $37.6 million from average production of 73 million cubic feet of natural gas equivalent per day (MMcfe/d).  This corresponds to sales of $18.4 million from average daily production of 38 MMcfe/d during the same period in 2003. The average price received per thousand cubic feet of natural gas in the second quarter of 2004 increased to $6.28 compared to $5.44 during the second three months in 2003, while the average price received per barrel of oil in the second quarter of 2004 increased to $30.03 compared to $26.59 during the same period a year earlier.

 

For the six months ended June 30, 2004, the company reported an increase in net income to $11.8 million, or $0.75 per diluted share. This compares to a net income of $735,000, or $0.00 per share on a diluted basis, for the same period in 2003.

 

Operating results for the six-month period ended June 30, 2004 include oil and gas sales of $69.5 million from average production of 68 million cubic feet of natural gas equivalent per day (MMcfe/d).  This corresponds to sales of $39.7 million from average daily production of 39 MMcfe/d during the same period in 2003.  The average price received per thousand cubic feet of natural gas for the six-month period ended June 30, 2004 increased to $6.11 compared to $5.62 during the first six months in 2003, while the average price received per barrel of oil increased to $30.32 compared to $28.93 during the same period a year earlier.

 

For the three months ended June 30, 2004, discretionary cash flow totaled $25.6 million compared to $9.1 million during the second three months of the previous year.  Net cash flow provided by operating activities, as defined by GAAP, totaled $21.9 million and $12.9 million during the three-month period ended June 30, 2004 and 2003, respectively. (See “Non-GAAP Financial Measure” that follows and the accompanying reconciliation of discretionary cash flow to net cash flow provided by operating activities.)

 

For the six months ended June 30, 2004, discretionary cash flow totaled $43.5 million compared to $21.3 million during the first six months of the previous year.  Net cash flow provided by operating activities, as defined by GAAP, totaled $39.8 million and $23.9 million during the six-month period ended June 30, 2004 and 2003, respectively. (See “Non-GAAP Financial Measure” that follows and the accompanying reconciliation of discretionary cash flow to net cash flow provided by operating activities.)

 

 

 

 

Non-GAAP Financial Measure - This news release refers to a non-GAAP financial measure as “discretionary cash flow.”  Callon believes this measure is a financial indicator of the company’s ability to fund capital expenditures and service debt.  Callon also believes this non-GAAP financial measure of cash flow is useful information to investors because it is widely used by professional research analysts in the valuation, comparison, rating and investment recommendations of companies within the oil and gas exploration and production industry.  Many investors use the published research of these analysts in making their investment decisions.  Discretionary cash flow should not be considered an alternative to net cash provided by operating activities or net income as defined by GAAP.

 

 

Reconciliation of Non-GAAP Financial Measure:

       Three Months Ended

Six Months Ended

(In thousands)

                  June 30,

June 30,

 

2004                   2003

        2004                  2003

   Discretionary cash flow

     $25,625

  $  9,118

     $43,524

    $21,271

   Net working capital changes and other changes

 (3,764)

      3,783

(3,760)

2,602

   Net cash flow provided by operating activities

$21,861

  $ 12,901

$39,764

$23,873

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Condensed Balance Sheets:

 

(In thousands)

 

 

June 30,

December 31,

 

2004

2003

 

(Unaudited)

 

Cash and cash equivalents

$ 30,438

$    8,700

Restricted cash

--

63,345

Oil and gas properties, net

396,567

390,163

All other assets

47,255

33,824

      Total assets

$474,260

$496,032

 

 

 

Long-term debt excluding current maturities

$186,814

$214,885

All other liabilities

102,278

147,886

Stockholders’ equity

185,168

133,261

      Total liabilities and stockholders’ equity

$474,260

$496,032

 

 

 

 

 

 

 

Production and Price Information:

Three Months

Ended

Six Months

Ended

 

June 30,

June 30,

 

2004

2003

2004

2003

Production:

 

 

 

 

Oil (MBbls)

     539

46

     978

91

Gas (MMcf)

 3,412

3,166

 6,520

6,593

Gas equivalent (MMcfe)

 6,648  

3,441

12,390

7,138

Average daily (MMcfe)

   73.1

37.8

   68.1

39.4

 

 

 

 

 

Average prices:

 

 

 

 

Oil ($/Bbl)

$30.03

$26.59

$30.32

$28.93

Gas ($/Mcf)

$  6.28

$  5.44

$  6.11

 $ 5.62

Gas equivalent ($/Mcfe)

$  5.66

$  5.35

$  5.61

 $ 5.56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Callon Petroleum Company

Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

 

 

   Three Months Ended 

 

   

    Six Months Ended

 

 

 

              June 30,

 

            June 30,

 

 

    2004

 

    2003

 

    2004

 

     2003

 

Operating revenues:

          

 

 

 

 

 

 

 

  Oil and gas sales

$ 37,606

 

$ 18,409

 

$  69,525

 

$ 39,677

 

    Total operating revenues

37,606

 

18,409

 

69,525

 

39,677