Annual report pursuant to Section 13 and 15(d)

Description of Business and Basis of Presentation

v2.4.0.6
Description of Business and Basis of Presentation
 12 Months Ended
Dec. 31, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business and Basis of Presentation
Description of Business and Basis of Presentation

Callon Petroleum Company is an independent crude oil and natural gas company, which since 1950 has been focused on building reserves and production both onshore and offshore through efficient operations and low finding and development costs. Today, the Company's principal development operations are in the Permian basin in West Texas. The Company's producing assets in the Gulf of Mexico provide significant cash flow to execute Callon's current onshore development operations. Following the December 2012 sale of our deepwater Gulf of Mexico property, discussed later within Note 12, the Company has one remaining deepwater Gulf of Mexico property, along with several Gulf of Mexico shelf properties, providing cash flow to support Callon's onshore development operations.

The Company was incorporated under the laws of the state of Delaware in 1994 and succeeded to the business of a publicly traded limited partnership, a joint venture with a consortium of European investors and an independent energy company partially owned by a member of current management.  As used herein, the “Company,” “Callon,” “we,” “us,” and “our” refer to Callon Petroleum Company and its predecessors and subsidiaries unless the context requires otherwise.

The Consolidated Financial Statements include the accounts of the Company, and its subsidiary, Callon Petroleum Operating Company (“CPOC”).  CPOC also includes the subsidiaries Callon Offshore Production, Inc. and Mississippi Marketing, Inc.  All intercompany accounts and transactions have been eliminated.  Certain prior year amounts have been reclassified to conform to presentation in the current year.  To the extent these amounts are material, we have either footnoted them within the Company's disclosures or have noted the items within this footnote. 

Unless otherwise indicated, all amounts included within the footnotes to the financial statements are presented in thousands, except for share, per-share and per-hedge data.

Correction of an Immaterial Error
During the second quarter of 2012, the Company determined that its December 31, 2011 financial statements reflected a misstatement caused by an error in adjusting the Company's deferred tax position at December 31, 2011. Management concluded that the impact of this error was immaterial on the prior reporting period. However, because the adjustment to correct the error in 2012 would have had a material impact on the 2012 financial statements, we corrected the prior period financial statements in the second quarter 2012 Form 10-Q and within the December 31, 2012 Form 10-K in accordance with SEC guidance. The adjustment had no effect on the Company's cash flow, and the information included in this Form 10-K sets forth the effects of this correction on the previously reported Balance Sheet and Income Statement as of and for the year ended December 31, 2011 as follows:
 
 
Year ended December 31, 2011
 
 
As Reported
 
Adjustment
 
As Adjusted
Balance Sheet:
 
 
 
 
 
 
Deferred tax asset
 
$
63,496

 
$
2,247

 
$
65,743

Total assets
 
367,460

 
2,247

 
369,707

Retained deficit
 
(127,537
)
 
2,247

 
(125,290
)
Total stockholders' equity
 
198,955

 
2,247

 
201,202

Total liabilities and stockholders' equity
 
367,460

 
2,247

 
369,707

 
 
 
 
 
 
 
Income Statement:
 
 
 
 
 
 
Income tax benefit
 
$
(67,036
)
 
$
(2,247
)
 
$
(69,283
)
Net income available to common shares
 
104,149

 
2,247

 
106,396

Net income per common share - Basic
 
2.75

 
0.06

 
2.81

Net income per common share - Diluted
 
2.70

 
0.06

 
2.76