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, 1997 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 require- ments for the past 90 days. Yes X No ---- ---- As of August 5, 1997, there were 5,996,171 shares of the Registrant's Common Stock, par value $.01 per share, outstanding. CALLON PETROLEUM COMPANY INDEX Page No. Part I. Financial Information Consolidated Balance Sheets as of June 30, 1997 and December 31, 1996 3 Consolidated Statements of Operations for the three and six-month periods ended June 30, 1997 and June 30, 1996 4 Consolidated Statements of Cash Flows for the six-month periods ended June 30, 1997 and June 30, 1996 5 Notes to Consolidated Financial Statements 6 Management's Discussion and Analysis of Financial Condition and Results of Operations 7-10 Part II. Other Information 11-14
CALLON PETROLEUM COMPANY CONSOLIDATED BALANCE SHEETS ($ in thousands, except share data) June 30, December 31, 1997 1996 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 8,940 $ 7,669 Accounts receivable 9,641 12,661 Other current assets 712 516 --------- --------- Total current assets 19,293 20,846 Oil & gas properties, full cost accounting method: --------- --------- Evaluated properties 351,633 322,970 Less accumulated depreciation, depletion and amortization (274,143) (266,716) --------- --------- 77,490 56,254 Unevaluated properties excluded from amortization 30,763 26,235 --------- --------- 108,253 82,489 --------- --------- Pipeline and other facilities, net 6,463 6,618 Other property and equipment, net 1,883 1,594 Deferred tax asset 3,101 5,412 Long-term gas balancing receivable 496 660 Other assets, net 852 901 --------- --------- Total assets $ 140,341 $ 118,520 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 8,060 $ 8,273 Undistributed oil and gas revenues 2,827 2,260 Accrued net profits interest payable 3,929 5,435 --------- --------- Total current liabilities 14,816 15,968 --------- --------- Long-term debt 42,750 24,250 Other long-term liabilities 170 48 Long-term gas balancing payable 551 390 --------- --------- Total liabilities 58,287 40,656 --------- --------- Stockholders' equity: Preferred stock, $0.01 par value, 2,500,000 shares authorized: 1,315,500 shares of Convertible Exchangeable Preferred Stock, Series A, issued and outstanding with a liquidation preference of $32,887,500 13 13 Common stock, $0.01 par value; 20,000,000 shares authorized; 5,996,171 at June 30, 1997 and 5,758,667 outstanding at December 31, 1996 60 58 Unearned compensation - restricted stock (2,181) -- Capital in excess of par value 76,903 74,027 Retained earnings 7,259 3,766 --------- --------- Total stockholders' equity 82,054 77,864 --------- --------- Total liabilities and stockholders' equity $ 140,341 $ 118,520 ========= ========= The accompanying notes are an integral part of these financial statements. 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, 1997 1996 1997 1996 Revenues: Oil and gas sales $ 8,370 $ 5,874 $ 20,844 $ 12,249 Interest and other 388 173 695 278 --------- -------- --------- --------- Total revenues 8,758 6,047 21,539 12,527 --------- -------- --------- --------- Costs and expenses: Lease operating expenses 1,756 1,894 4,164 3,686 Depreciation, depletion and amortization 3,765 2,459 7,581 4,844 General and administrative 1,351 800 2,382 1,707 Interest 99 23 210 48 --------- -------- --------- --------- Total costs and expenses 6,971 5,176 14,337 10,285 --------- -------- --------- --------- Income from operations 1,787 871 7,202 2,242 Income tax expense 578 -- 2,311 -- --------- -------- ---------- ---------- Net income 1,209 871 4,891 2,242 Preferred stock dividend 699 699 1,398 1,398 --------- -------- --------- --------- Net income available to common shares $ 510 $ 172 $ 3,493 $ 844 ========= ======== ========= ========= Net income per common share: Primary $ 0.08 $ 0.03 $ 0.55 $ 0.15 Assuming full dilution $ 0.08 $ 0.03 $ 0.52 $ 0.15 Shares used in computing net income per common share: Primary 6,268 5,755 6,307 5,755 Assuming full dilution 6,331 5,755 9,318 5,755 The accompanying notes are an integral part of these financial statements. CALLON PETROLEUM COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) ($ in thousands) Six Months Ended June 30, June 30, 1997 1996 Cash flows from operating activities: Net income $ 4,891 $ 2,242 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 7,791 4,982 Amortization of deferred costs 188 -- Deferred income tax expense 2,311 65 15,181 7,289 Changes in current assets & liabilities: Accounts receivable 3,020 330 Other current assets (196) 123 Current liabilities (1,152) 3,029 Change in gas balancing receivable 164 84 Change in gas balancing payable 161 (37) Change in other long-term liabilities 122 (22) Change in other assets, net (138) (45) ---------- --------- Cash provided by operating activities 17,162 10,751 ---------- --------- Cash flows from investing activities: Capital expenditures (36,214) (9,166) Cash proceeds from sale of mineral interests 2,524 299 ---------- --------- Cash used in investing activities (33,690) (8,867) ---------- --------- Cash flows from financing activities: Increase in debt 18,500 -- Common stock issued pursuant to employee benefit plan 148 -- Unearned restricted stock compensation 519 -- Equity issued by conversion of stock options 30 -- Increase in accrued preferred stock dividends payable -- 443 Dividends on preferred stock (1,398) (1,398) ---------- --------- Cash provided by (used in) financing activity 17,799 (955) ---------- --------- Net increase in cash and cash equivalents 1,271 929 Cash and cash equivalents: Balance, beginning of period 7,669 4,265 ---------- ---------- Balance, end of period $ 8,940 $ 5,194 ========== ========== The accompanying notes are an integral part of these financial statements.
CALLON PETROLEUM COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 1997 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, consist- ing 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, 1996 included in the Company's Annual Report on Form 10-K dated March 24, 1997. 2. Earnings Per Share Fully diluted earnings per share for the six months ended June 30, 1997 was calculated assuming the conversion of the Company's preferred stock into common stock. The preferred stock was not included in current quarter to date and prior year calculations due to their antidilutive effect on fully diluted earnings per share. In February 1997, the Financial Accounting Standards Board issued Statement No. 128 ("FAS 128"), "Earnings Per Share", which simplifies the computation of earnings per share. FAS 128 is effective for financial statements issued for periods ending after December 15, 1997 and requires restatement for all prior period earnings per share data presented. Accordingly, basic earnings per share and diluted earnings per share calculated in accordance with FAS 128 were as follows: Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 1997 1996 1997 1996 Per Share Data: Basic earnings per share $ 0.08 $ 0.03 $ 0.58 $ 0.15 Diluted earnings per share $ 0.08 $ 0.03 $ 0.52 $ 0.15 3. Acquisitions In June of 1997, the Company acquired an 18.8% working interest in Mobile Area Blocks 863 and 907, and a 35% working interest in Mobile Area Block 908 from ELF Exploration, Inc. The net purchase price was $11.8 million and was funded by the Company's Credit Facility. 4. Senior Subordinated Notes On July 31, 1997 the Company issued $36,000,000 of 10.125% Senior Subordinated Notes due 2002. Interest is payable quarterly beginning September 15, 1997. The Senior Subordinated Notes were offered pursuant to a Rule 144A transaction or an applicable exemption from registration requirements. The net proceeds to the Company, after costs of the transaction, were used to repay the outstanding balance on Callon's Credit Facility and will fund a portion of the remaining 1997 capital expenditure budget. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL 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 sub- stantially 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. 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, 1997 and 1996. 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 secur- ities. Net cash provided by operating activities for the six months ending June 30, 1997 totaled $17.2 million. Other sources of cash during the first six months were $18.5 million advanced under the Company's credit facility and $2.5 million from the sale of mineral interests. During the first half of 1997, capital expenditures were $36.2 million and $1.4 million was paid as dividends to the preferred stockholders. The balance of available funds were retained for future operating expenses and potential drilling and acquisition opportunities. At June 30, 1997, the Company had working capital of $4.5 million and a current ratio of 1.3 to 1. The Company has budgeted up to $60 million in capital expenditures for 1997. During the first six months of 1997, the Company has expended approximately $12 million on drilling and exploration activities and $22 million in acquisi- tions of additional producing properties, undeveloped mineral interesrs and seismic information attributable to future drilling sites. For the balance of the year, the Company will continue evaluating producing property acquisi- tions 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, pro- jected cash flow from operations and unused borrowings under the Company's Credit Facility. On July 31, 1997 the Company issued $36,000,000 of 10.125% Senior Subordinated Notes due 2002. Interest is payable quarterly beginning September 15, 1997. The Senior Subordinated Notes were offered pursuant to a Rule 144A transaction or an applicable exemption from registration requirements. The net proceeds to the Company, after costs of the transaction, were used to repay the out- standing balance on Callon's Credit Facility and will fund a portion of the remaining 1997 capital expenditure budget. RESULTS OF OPERATIONS The following table sets forth certain operating information with respect to the oil and gas operations of the Company. Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 1997 1996 1997 1996 Production: Oil (MBbls) 108 159 237 302 Gas (MMcf) 3,057 1,444 6,448 2,912 Total production (MMcfe) 3,707 2,400 7,869 4,725 Average sales price: Oil (per Bbl) $ 17.30 $ 17.89 $ 19.36 $ 18.12 Gas (per Mcf) 2.13 2.09 2.52 2.33 Total production (per Mcfe) 2.26 2.45 2.65 2.59 Average costs (per Mcfe): Lease operating (excluding severance taxes) $ 0.39 $ 0.59 $ 0.43 $ 0.58 Severance taxes 0.08 0.20 0.09 0.20 Depreciation, depletion and amortization 1.02 1.02 0.96 1.03 General and administrative (net of management fees) 0.36 0.33 0.30 0.36 Comparison of Results of Operations for the Three Months Ended June 30, 1997 and the Three Months Ended June 30, 1996. Oil and Gas Production and Revenues - ----------------------------------- Total oil and gas revenues increased 42% from $5.9 million in 1996 to $8.4 million in 1997. This increase is largely the result of increased gas pro- duction. Oil production during the second quarter of 1997 totaled 108,000 barrels and generated $1.9 million in revenues compared to 159,000 barrels and $2.9 million in revenues for the same period in 1996. Second quarter average daily produc- tion decreased from 1,750 barrels per day in 1996 to 1,190 barrels per day in 1997. Average oil prices received in the second quarter of 1997 were $17.30 compared to $17.89 in 1996. Production decreases in the second quarter of 1997 are largely attributable to properties that were sold. Gas production during the second quarter of 1997 totaled 3.1 billion cubic feet and generated $6.5 million in revenues compared to 1.4 billion cubic feet and $3.0 million in revenues during the same period in 1996. The average sales price for the second quarter of 1997 averaged $2.13 per thousand cubic feet compared to $2.09 per thousand cubic feet at this time last year. Although the North Dauphin Island Field production was lower than last year, production from the newly acquired properties more than offset this decline. 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, 1997 1996 1997 1996 Chandeleur Block 40 -- -- 1,078,000 419,000 Main Pass 163 -- -- 1,206,000 33,000 Main Pass 164/165 -- -- 139,000 -- North Dauphin Island Field -- -- 368,000 675,000 Black Bay Complex 46,000 52,000 -- -- Big Escambia Creek 26,000 27,000 51,000 54,000 Other properties 36,000 80,000 215,000 263,000 ------- ------- --------- --------- Total 108,000 159,000 3,057,000 1,444,000 ======= ======= ========= ========= Lease Operating Expenses - ------------------------ Lease operating expenses, including severance taxes, for the three-month period ending June 30, 1997 were $1.8 million, substantially unchanged from $1.9 million for the same period in 1996. Depreciation, Depletion and Amortization - ---------------------------------------- Depreciation, depletion and amortization for the three months ending June 30, 1997 and 1996 was $3.8 million and $2.5 million, respectively, reflecting the overall increase in production. For the three-month periods ending June 30, 1996 and 1997, the per Mcf equivalent amount was $1.02. General and Administrative - -------------------------- General and administrative expense for the three months ended June 30, 1997 was $1.4 million compared to $0.8 million for the three months ended June 30, 1996. This expense increase is generally attributable to increased executive compen- sation, increased travel and transportation expenses and the loss of management fees as a result of property sales. Interest Expense - ---------------- Interest expense increased from $23,000 during the three months ended June 30, 1996 to $99,000 during the three months ended June 30, 1997 reflecting the increase in the Company's long-term debt. Comparison of Results of Operations for the Six Months Ended June 30, 1997 and the Six Months Ended June 30, 1996. Oil and Gas Production and Revenues - ----------------------------------- For the six months ended June 30, 1997, total oil and gas revenues increased by $8.6 million, or 70%, to $20.8 million when compared to $12.2 million for the same period in 1996. For the six months ending June 30, 1997, oil production and oil revenues decreased to 237,000 barrels and $4.6 million, respectively. For the comparable period in 1996, oil production was 302,000 barrels while revenues totaled $5.5 million. Oil prices during the first six months of 1997 averaged $19.36, compared to $18.12 for the same period in 1996. Although prices were higher, the loss of production from the properties which were sold and the decline in other non-core properties caused the overall decline in oil revenues. Natural gas production and revenue for the six-month period ending June 30, 1997 were 6.4 billion cubic feet and $16.3 million, respectively, increasing from 2.9 billion cubic feet and gas revenues of $6.8 million in the first six months of 1996. The average sales price for natural gas in the first six months in 1997 was $2.52 per Mcf, a $0.19 per Mcf increase over the same period in 1996. The combination of increased prices and production volumes generated the 140% increase in total gas revenues. 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, 1997 1996 1997 1996 Chandeleur Block 40 -- -- 2,251,000 757,000 Main Pass 163 -- -- 2,477,000 33,000 Main Pass 164/165 -- -- 270,000 -- North Dauphin Island Field -- -- 826,000 1,475,000 Black Bay Complex 93,000 101,000 -- -- Big Escambia Creek 56,000 49,000 98,000 84,000 Other properties 88,000 152,000 526,000 563,000 ------- ------- --------- --------- Total 237,000 302,000 6,448,000 2,912,000 ======= ======= ========= ========= Lease Operating Expenses - ------------------------ Lease operating expenses, excluding severance taxes, for the first half of 1997 increased by 26% to $3.4 million from $2.7 million for the 1996 comparable period. This increase is primarily the result of first quarter expenses associated with the new producing properties. Severance taxes decreased by 22% to $0.7 million during the first six months of 1997 from $0.9 million for the same period in 1996 as a result of production declines in the Company's onshore properties and the sale of properties. Depreciation, Depletion and Amortization - ---------------------------------------- Depreciation, depletion and amortization for the first six months of 1997 was $7.6 million, or $0.96 per Mcf equivalent. For the same period in 1996, the total was $4.8 million and $1.03 per Mcf equivalent. General and Administrative - -------------------------- During the first six months of 1997, general and administrative expenses increased by 40% to $2.4 million compared $1.7 million for the same six- month period in 1996. Increased executive compensation, travel and transportation 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 1997 was $210,000 compared to $48,000 for the first half of 1996 as a result of the increase in the Company's long- term debt. 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 June 19, 1997, at which two Class III directors were elected and the appointment of Arthur Andersen LLP as the Company's independent public accountants for the year ending December 31, 1997 was ratified. In addition, the Callon Petroleum Company 1996 Stock Incentive Plan and the Callon Petroleum Company 1997 Employee Stock Purchase Plan were both adopted. The nominees for director were Messrs. Fred L. Callon and Dennis W. Christian. Mr. Callon received 4,761,844 votes for, 38,171 votes against or withheld and no votes abstained. Mr. Christian received 4,768,090 votes for, 31,925 votes against or withheld and no votes abstained. The ratification of Arthur Andersen LLP received 4,783,769 votes for, 5,258 votes against or withheld and 10,988 votes abstained. The adoption of the Callon Petroleum Company 1996 Stock Incentive Plan received 4,153,510 votes for, 177,498 votes against or withheld and 469,007 votes abstained. The adoption of the Callon Petroleum Company Employee Stock Purchase Plan received 4,257,925 votes for, 121,272 votes against or withheld and 420,818 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) 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. (incor- porated 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 Regis- tration 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 Inter- nationale Nederlanden (U.S.) Capital Corporation (incor- porated 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 ref- erence 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) 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 ref- erence 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 ref- erence 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 (incor- porated 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. On July 11, 1997, the Company filed a report on Form 8-K in connection with the Company's purchase of certain oil and gas mineral interests from Elf Exploration, Inc. (the "Elf Acquisition) for $11.8 million. The Company purchased an 18.8% working interest in the Mobile Area Block 864 Unit. The purchase included a 17.5% working interest in Mobile Area Blocks 863 and 907 and a 35% working interest in Mobile Area Block 908. At the time this report was filed, it was impracticable to provide the required financial statements and pro forma information. On August 8, 1997, the Company filed a report on Form 8-K/A which included the required audited financial statements of the property acquired and the unaudited pro forma financial information. On August 8, 1997, the Company filed a report on Form 8-K reporting the completion on July 31, 1997 of the sale of $36 million of Senior Subordinated Notes due 2002 with a coupon of 10.125%. The Company agree to file by October 1, 1997, and to use its best efforts to cause to become effective by November 15, 1997, a registration statement relating to an exchange offer for the Notes. ________________________________ * Inapplicable to this filing 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 13, 1997 By /s/ John S. Weatherly John S. Weatherly, Senior Vice President, Chief Financial Officer and Treasurer