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

FOR IMMEDIATE RELEASE

Callon Petroleum Company Announces

Production Has Commenced At Habanero

Natchez, MS (December 17, 2003) -- Callon Petroleum Company (NYSE: CPE/CPE.PrA) announced today production commenced from its Habanero discovery, located in the deepwater region of the Gulf of Mexico, on November 29, 2003.

Habanero is located in Garden Banks Block 341 about 200 miles southeast of New Orleans in approximately 2,015 feet of water. A sub-sea development, it ties back approximately 11.5 miles to Shell’s Auger tension leg platform, making this the fourth sub-sea development to tie back to the Auger hub. Peak production for Habanero is expected to exceed 20,000 barrels of oil and 70 million cubic feet of gas per day by the end of first quarter, 2004.

Callon owns an 11.25% working interest. Shell Exploration & Production Company, the operator and a subsidiary of Royal Dutch/Shell Group (NYSE: RD), owns 55%, and Murphy Oil Corporation (NYSE: MUR) owns the remaining 33.75%.

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.

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