SCHEDULE 14A

Rule 14a-101

Schedule 14A Information

TO BE HELD THURSDAY, MAY 12, 2016

To Our Stockholders:

Notice is hereby given and you are cordially invited to attend the2016 Annual MeetingSHAREHOLDERS

If you have any questionsthe accompanying Proxy Card are being mailed to shareholders on or need assistance voting yourabout               , 2021. The Proxy Card includes instructions on how to access the proxy materials over the Internet, how to request additional printed copies of these materials, and how to vote shares please callof our proxy solicitor:

Morrow & Co., LLC

470 West Avenue - 3rd Floor

Stamford, CT 06902

Banks and Brokerage Firms, please call (203) 658-9400.

Stockholders, please call toll free (800) 414-4313.

PROXY SUMMARY

This summary is included to provide an introduction and overview ofCommon Stock. In addition, by following the information containedinstructions in the Proxy Statement. This is a summary only and highlights information contained elsewhereCard or other voting instruction card, shareholders may request to receive proxy materials in this Proxy Statement. This summary does not contain allprinted form by mail or electronically by e-mail on an ongoing basis.

2016 Annual Meeting of Stockholders

Contents

3

relates to price and cost estimates and recoverability. New results of drilling, testing, and production history may result in revisions of previous estimates and, if significant, would impact future development plans. As such, reserve estimates may differ from actual results of oil and natural gas quantities ultimately recovered.

INFORMATION ABOUT VOTING AND THE MEETING

Who may vote

You may vote if you are the record

AttendingSection 1.1 such amounts as are required to be withheld under the Meeting

If you meetInternal Revenue Code of 1986, as amended (the “Code”), or other applicable law. Any amount properly deducted and withheld and timely remitted to the above criteriaappropriate taxing authority shall be treated for all purposes of this Agreement as having been paid to vote at our Annual Meeting, you may attend the Annual Meeting. If you wish to attend the Annual MeetingKimmeridge in person, you must present valid, government-issued picture identification. If your shares are heldrespect of which such deduction and withholding was made. Except in the namecase of any withholding required as a bank, brokerresult of Kimmeridge’s failure to comply with Section 2.2(d), the Company shall use commercially reasonable efforts to notify Kimmeridge of its intention to withhold or other nominee and you plandeduct from the consideration payable or deliverable to attendKimmeridge at least two (2) Business Days prior to the Annual Meeting, in order to be admitted you must present proof of your beneficial ownershipdate of the common stock,applicable payment or delivery, which notice shall include a statement of the amounts it intends to withhold or deduct in respect of the applicable payment or delivery and the applicable provision of law requiring such withholding or deduction. To the extent any such withholding or deduction is required by law, the parties hereto shall cooperate in good faith to reduce or otherwise eliminate any such withholding or deduction.

For safetyfacilities of the DTC, the delivery to the Company (or its trustee or designee) of the Exchanged Notes and security reasons, no cameras, recording equipment, cellular telephones, electronic devices, large bags, briefcases or packages will be permitted in the Annual Meeting. No banners, signs, firearms or weapons will be allowed in the meeting room. We reserve the right to inspect all items entering the meeting room.

Proposals

Qualifying stockholders will vote on the following four proposals at the meeting:

Noticeother documents and Access

Rules adoptedinstruments reasonably requested by the SecuritiesCompany to effect the transfer and Exchange Commission (the "SEC") allow companies to send stockholders a noticecancellation of internet availability of proxy materials (the “Notice”), rather than mail stockholders full sets of proxy materials, often referred to as “notice and access.” Consistent with the past few years, we have elected to send a separate Notice to our stockholders instead of a paper copy of the proxy materials. This approach conserves natural resources and reduces the costs of printing and distributing our proxy materials, while providing stockholders with a convenient way to access our proxy materials. This Notice includes instructions on how to access the proxy materials over the Internet or to request a paper copy of proxy materials, including a proxy card or voting instruction form. In addition and as described in the Notice, stockholders may request to receive future proxy materials in printed form by mail or electronically by email. A stockholder’s election to receive proxy materials by mail or email will remain in effect until terminated by the stockholder.

Our Board has made these proxy materials available to you on the Internet on or about April 1, 2016 at https://www.iproxydirect.com/CPE, which is the cookies-free website described in the Notice. Accordingly, we are sending the Notice to our stockholders of record and beneficial owners of our stock, and filing the Notice with the SEC, on or about April 1, 2016. Please note that the Notice identifies the items on which stockholders will vote at the meeting, but stockholders cannot vote by marking the Notice and returning it. The Notice provides instructions on how to vote via the Internet, by telephone or by requesting and returning a paper proxy card, or by submitting a ballot in person at the meeting.

In additionsuch Exchanged Notes to the proxy materials being available for review at https://www.iproxydirect.com/CPE, the site contains instructions on how to access the proxy materials on a website or to request free of charge printed materials, including a copy of our Form 10-K for the year ended December 31, 2015 as filed with the SEC. On an ongoing basis, stockholders may contact our Corporate Secretary at our principal offices in Natchez, Mississippi to request proxy materials by mail or by e-mail.

Casting your vote

There are three methods for registered stockholders to vote by proxy without attending the Annual Meeting:

If you get more than one Notice and/or proxy statement then it means that your shares are likely registered in more than one account. Please provide voting instructions for all Notices, proxy and voting instruction cards you receive. If you send us a signed proxy card without marking your voting selections, your shares will be voted on each proposal as recommended by our Board, and in the discretion of the proxy holders as to any other matters that may properly come before the meeting or any postponement or adjournment of the meeting. The Board is not presently aware of any other proposals or any other business to be considered at the Annual Meeting.

If your shares are registered in the name of a broker, bank or other nominee (typically referred to as being held in “Street Name”), you will receive instructions from your broker, bank or other nominee that you must follow in order for your broker, bank or other nominee to vote your shares per your instructions. Many brokerage firms and banks have a process for their beneficial holders to provide instructions via the Internet or over the telephone. If Internet or telephone voting is unavailable from your broker, bank or other nominee, please complete and return the enclosed voting instruction card in the addressed, postage paid envelope provided.

In the event you do not provide instructions on how to vote shares held in Street Name, your broker may have authority to vote your shares. Under the rules that govern brokers who are voting with respect to shares that are held in Street Name, brokers have the discretion to vote such shares on routine matters, but they are not permitted to vote (a “broker non-vote”) on non-routine or non-discretionary items absent instructions from the beneficial owner. With respect to the Annual Meeting, brokers are prohibited from exercising discretionary authority in the election of Directors and the non-binding advisory proposal on executive compensation, but such brokers may exercise discretionary authority with respect to the amendment of our certificate of incorporation to increase the number of authorized shares and the ratification of the appointment of our independent registered public accounting firm. Your vote is especially important. Therefore, please promptly instruct your broker regarding how to vote your shares on these matters.

If you hold shares through a broker, bank or other nominee and wish to be able to vote in person at the meeting, you must obtain a legal proxy from your broker, bank or other nominee and present it to the inspector of election with your ballot at the meeting. If you need assistance in obtaining a legal proxy, please call Morrow & Co., LLC toll-free at (800) 414-4313. Submitting your proxy by mail will not affect your right to vote in person if you decide to attend the Annual Meeting.

Revoking a proxy

You may revoke or change a previously delivered proxy at any time before the meeting by delivering another proxy with a later date, by voting again via the Internet or by telephone, or by delivering written notice of revocation of your proxy to our Corporate Secretary at our principal offices in Natchez, Mississippi before the beginning of the meeting. You may also revoke your proxy by attending the meeting and voting in person, although attendance at the meeting will not necessarily revoke a valid proxy that was previously delivered. If you hold shares through a broker, bank or other nominee, you must contact that nominee to revoke any prior voting instructions. You also may revoke any prior voting instructions by voting in person at the meeting if you obtain a legal proxy as described above.

Recommendation of the Board

The Board unanimously recommends you vote “FOR” each of the proposals. A proxy that is properly completed and submitted will be voted at the Annual MeetingCompany in accordance with the instructionsterms hereof; and

restrain or prohibit this Agreement or the consummation of the Exchange. No preliminary or permanent injunction or other order issued by any federal or state court of competent jurisdiction preventing consummation of the Exchange shall be in effect.

11

The Audit Committee is required to pre-approve all audit, audit-related and non-audit services provided bydate hereof until the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. The Audit Committee approved all of the fees described in Proposal 4.  

Relationship with Independent Registered Public Accounting Firm

Management is responsible for establishing and maintaining internal controls over financial reporting and for assessing the effectiveness of those controls. The independent registered public accounting firm is responsible for performing independent audits of our consolidated financial statements and internal controls over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) (United States) and issuing reports thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.

Ernst & Young LLP, an independent registered public accounting firm, served as our independent registered public accounting firm during 2013, 2014 and 2015. Following the shift in our asset base and operational focus stemming from our 2013 exit from the Gulf of Mexico, the Audit Committee evaluated other independent accounting firms, including Ernst & Young LLP, with the ability and expertise to serve as our independent registered public accounting firm. Following this review, the Committee appointed Grant Thornton LLP to serve as our independent registered public accounting firm. 

Compensation Committee Functions and Responsibilities

Purpose: The purpose of the Compensation Committee is to establish our compensation policies and oversee the administration of our compensation program.

Members: Consistent with the listing requirements of the NYSE, the Compensation Committee is composed entirely of independent members of our Board, as each member meets the independence requirements set by the NYSE and applicable federal securities laws. The Compensation Committee is currently comprised of the following independent Directors:

Meetings: The Compensation Committee met five times during 2015. All members of the Compensation Committee attended each meeting.

Responsibilities: Pursuant to its charter, our Compensation Committee’s duties include the responsibility to:

The Committee retained the services of Meridian Compensation Partners LLC, an independent compensation consulting firm, to assist in the annual review of market and industry data to assess our competitive position with respect to each element of total compensation and to ensure the attraction, retention and appropriate reward to our CEO and other executive officers.

Compensation Committee Interlocks and Insider Participation: We have never employed, as an officer or otherwise, a member of the Compensation Committee. Additionally, none of our executive officers served as a member of the board or compensation committee (or other board committee performing similar functions or, in the absence of any such committee, the entire board) of any other entity that has one or more of its executive officers serving on the Company’s Compensation Committee.

Nominating and Corporate Governance Committee Functions and Responsibilities

Purpose: The purpose of the Nominating and Corporate Governance Committee is to identify and recommend qualified candidates to the Board for nomination as members of the Board, assess Director, Board and committee effectiveness, and develop and implement our Corporate Governance Guidelines and otherwise taking a leadership role in shaping the corporate governance of our Company.

Members: Each member of the Committee meets the independence requirements of the NYSE and applicable federal securities laws. The Nominating and Corporate Governance Committee is currently comprised of the following independent Directors:

Meetings: The Nominating and Corporate Governance Committee met three times during 2015. All members of the Committee attended each meeting.

Responsibilities: Pursuant to its charter, the Nominating and Corporate Governance Committee’s duties include the responsibility to assist the Board in:

Director Identification and Selection

The Nominating and Corporate Governance Committee has established criteria it considers as guidelines in considering nominations to our Board and evaluates potential nominees based on the contribution such nominee’s background and skills could have upon the overall functioning and chemistry of the Board. While not an exhaustive list, key criteria include:

The Nominating and Corporate Governance Committee and the Board may also consider other qualifications and attributes that they believe are appropriate in evaluating the ability of an individual to serve as a member of the Board. The Nominating and Corporate Governance Committee’s goal is to assemble a Board that brings to us a variety of perspectives and skills derived from high quality business and professional experience, while also having the requisite business and oil and gas industry experience to perform its oversight role satisfactorily for our stockholders. In making its determinations, the Committee evaluates each individual in the context of the Board as  a whole, with the objective of assembling a group that can best represent stockholder interests through the active, objective and constructive participation in meetings and the strategic decision-making processes. Although the Nominating and Corporate Governance Committee has no formal diversity policy, the Board believes that diversity with respect to viewpoint, skills and experience should beconsidered as part of the overall assessment of the Board’s functioning and needs and the Director nomination process specifically includes disclosure of the diversity provided by each candidate. In addition to qualities of intellect, integrity and judgment, it takes into consideration diversity of personal and professional background, executive management experience, breadth of experience in the oil and natural gas E&P industry, finance, accounting, technology or law. The Nominating and Corporate Governance Committee makes its determination in the context of an assessment of the perceived needs of the Board at that point in time.

In accordance with our Certificate of Incorporation, any stockholder may nominate a person for election to the Board upon delivery of written notice to us of such nomination. Such notice must be sent as provided in our Certificate on or before the deadline set forth in our Certificate, and must otherwise comply with the procedures set forth in our Certificate of Incorporation. For nominations at the 2016 Annual Meeting, the Board will consider individuals identified by stockholders on the same basis as nominees identified from other sources. A submission recommending a nominee should include:

In making its nominations, the Nominating and Corporate Governance Committee identifies nominees by first evaluating the current members of the Board willing to continue their service and any potential need to expand the Board to include additional expertise. Current members with proven service and a record of quality contribution to the Board and the qualifications and skills that are consistent with the Committee’s criteria for Board service are re-nominated. As to vacancies, the Committee will generally poll the Board members and members of management for recommendations. The Committee may also review the composition and qualification of the boards of directors of our competitors, and may seek input from industry experts or analysts. The Committee may in the future choose to engage third-party search firms in situations where particular qualifications are required or where existing contacts are not sufficient to identify an appropriate candidate for membership in the Board.

Strategic Planning and Reserves Committee Functions and Responsibilities

Purpose:  The purpose of the Strategic Planning and Reserves Committee is to manage and oversee the Board’s participation in the development of the Company’s strategic plan, and assist management and the Board with its oversight of the integrity of the determination of our oil and natural gas reserve estimates.

Members: The Strategic Planning and Reserves Committee shall consist of no fewer than three members of the Board, and is currently comprised of the following independent Directors:

Meetings: The Strategic Planning and Reserves Committee met threetimes during 2015. All members of the Committee attended each meeting during 2015. This Committee meets periodically during the year, generally prior to the scheduled quarterly Board meetings, to review the progress of our capital expenditure budget and to evaluate recent trends in the independent oil and gas industry that may have an impact on our current business strategy for the remainder of the year.

Responsibilities: The Strategic Planning and Reserves Committee was created to oversee the responsibilities of the Board relating to strategic planning, including:

Corporate Governance Matters

Corporate Governance Principles

The Board believes that sound corporate governance practices and policies provide an important framework to assist it in fulfilling its duty to stockholders. The framework for our corporate governance can be found in our governance documents, which include:

Each of these documents is available on our website www.callon.com, under the “About Callon – Governance” menu. Stockholders may obtain a printed copy, free of charge, by sending a written request to our Corporate Secretary at our principal offices in Natchez, Mississippi. We also promptly post on our website any amendments to these documents and any waivers from the Code of Business Conduct and Ethics for our Directors and principal executive, financial and accounting officers.

Ethics

Our Code of Business Conduct and Ethics sets forth the policies and expectations applicable to every Director, officer and employee. The Code addresses a number of topics, including conflicts of interest, relationships with others, corporate payments, disclosure policy, compliance with laws, corporate opportunities and the protection and proper use of our assets. The Code meets the NYSE’s requirements for a code of business conduct and ethics, as well as the SEC’s definition of a code of ethics applicable to our senior officers. Neither the Board nor any Board committee has ever granted a waiver of the Code.

Board Risk Oversight

As an independent E&P company, we face a number of risks. Assessing and managing material risk is the responsibility of our management team, while our Board, as a whole and through its committees, generally oversees risk management and our long-term strategic direction, ensuring that risks undertaken by the Company are consistent with the Board’s risk tolerance. Our Board leadership structure and our practice of a high degree of interaction between our directors and members of senior management facilitate this oversight function. Our executive officers regularly attend the Board meetings and are available to address any questions or concerns raised by the Board on risk management-related and any other matters. Other members of our management team periodically attend the Board meetings or are otherwise available to confer with the Board to the extent their expertise is required to address risk management matters. The information flow and communication throughout the year between our Board and senior management regarding long-term strategic planning and short-term operational reporting includes matters of material risk inherent in our business of exploring for and producing oil and natural gas. The Board realizes, however, that it is not possible or prudent to eliminate all risk and that appropriate risk-taking is essential in order to achieve our near and longer-term objectives.

While the Board is ultimately responsible for risk oversight, the Board exercises additional risk oversight responsibilities through its committees, which are comprised solely of independent directors. Each such committee has primary risk oversight responsibility with respect to all matters within the scope of its duties as contemplated by its charter and as described below.

Communication with Directors

Stockholders may communicate with the full Board, independent Directors as a group, or individual Directors, by sending a letter in care of the Corporate Secretary at our principal office, P. O. Box 1287, Natchez, MS 39121. Our Corporate Secretary has the authority to discard any solicitations, advertisements, or other inappropriate communications, but will forward any other mail to the named Director or group of Directors. Our Corporate Secretary will forward approved mail addressed to the full Board to Mr. Callon as Chairman of the Board who, if appropriate, will share the item with the full Board.

Executive Officers

The following table sets forth the names, ages and positions of our current executive officers:

The following is a brief description of the background and principal occupation of each executive officer:

Fred L. Callon, Chairman of the Board of Directors, President and Chief Executive Officer. Please see above for the biography of Mr. Callon.

Gary A. Newberry joined us in April 2010 as Vice President – Production and Development. In September 2010, Mr. Newberry was promoted to Senior Vice President – Operations. After graduation, he joined Marathon Oil Company as a Production and Drilling Engineer working in Alaska, the Gulf of Mexico, and the Rockies. He held various supervisory and management roles of increasing responsibility over production and drilling operations in the Mid-Continent, Alaska and the Permian Basin. As a Business Unit Leader, Mr. Newberry was responsible for all upstream business activity in Oklahoma, Alaska, and the Rockies and served as Marathon’s Worldwide Operations Manager. Mr. Newberry retired from Marathon Oil Company after 33 years of service. Mr. Newberry graduated from Marietta College in 1977 with a B.S. degree in Petroleum Engineering.

Joseph C. Gatto, Jr. joined us in April 2012 as Senior Vice President, Corporate Finance, with responsibility for our capital markets and strategic planning functions, in addition to investor relations activities. Effective March 31, 2014, the Board appointed Mr. Gatto as Senior Vice President, Chief Financial Officer and Treasurer. Prior to joining Callon, Mr. Gatto was a Managing Director in the energy investment banking groups of Merrill Lynch & Co. and Barclays Capital from July 1997 until February 2009, with involvement in all phases of M&A and capital raising transactions for his clients. In February 2009, he founded MarchWire Capital, LLC, a financial advisory and strategic consulting firm, and subsequently served as Head of Structuring and Execution with Merrill Lynch Commodities, Inc. from January 2010 until November 2011. Mr. Gatto graduated from Cornell University with a BS degree in 1992 and The Wharton School of the University of Pennsylvania with an MBA in 1997.

Jerry A. Weant joined us in September 2013, as Vice President, Land. Mr. Weant joined Callon from Pioneer Natural Resources, an independent oil and gas company, where he was focused on Midland Basin operations, acting as a liaison with Permian Basin asset teams and coordinating internal efforts for the assessment of horizontal drilling programs. Mr. Weant spent the first 27 years of his career working as a landman in Midland, Texas, including working for Texaco, Inc. Pogo Producing, Inc., as well as other independents. He holds a Bachelor of Business Administration/Petroleum Land Management from the University of Texas and is a Certified Professional Landman and a member of the American Association of Professional Landmen and the Permian Basin Landman's Association.

Mitzi P. Conn joined us in June 1993 and has been our Corporate Controller since May 2007. Effective March 31, 2014, the Board also appointed Mrs. Conn as our Principal Accounting Officer. Prior to May 2007, she served as Assistant Controller since May 2004 and has held various other positions in our finance and accounting departments. Prior thereto, she was a general accountant for Graham Resources, Inc. Mrs. Conn received her B.S. degree in accounting from Southeastern Louisiana University in 1990 and is a member of the American Institute of Certified Public Accountants and the Mississippi Society of Certified Public Accountants.

PROPOSAL 2

APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION

OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

We seek a non-binding advisory vote from our stockholders to approve the compensation of our NEOs, as described in this proxy statement. The Board recognizes that executive compensation is an important matter for our stockholders. The Compensation Committee is tasked with the implementation of our executive compensation philosophy and, as described in detail under the heading “Compensation Discussion and Analysis” below, the design of our executive compensation programs to align the interests of our executive officers with the interests of our stockholders. Under these programs, our executive officers are rewarded for the achievement of specific annual, long-term corporate and strategic goals tied to long-term value for stockholders.

As described in the CD&A, we believe our compensation program is effective, appropriate and strongly aligned with the long-term interests of our stockholders and that the total compensation package provided to the NEOs is reasonable and not excessive. As you consider this Proposal 2, we urge you to read the CD&A section of this proxy statement for additional details on executive compensation. Further, in determining whether to approve this proposal, we believe that stockholders should also consider the following:

In light of the above, we believe that the compensation of our NEOs for 2015 was appropriate and reasonable, and that our compensation programs and practices are sound and in the best interests of us and our stockholders. We therefore respectfully request that Stockholders vote on the following resolution:

“RESOLVED, that the compensation paid to Callon’s Named Executive Officers, as disclosed in Callon’s 2016 proxy statement (including the Compensation Discussion and Analysis, the compensation tables and related footnotes and narrative disclosures), is hereby approved.”

The vote on this resolution is not intended to address any specific element of compensation; rather the vote relates to the compensation of the NEOs, as described in this proxy statement in accordance with the compensation disclosure rules of the SEC. Although this vote is advisory and is not binding on the Board, the Compensation Committee of the Board values the input and views of our stockholders and will take into account the outcome of the vote in connection with their evaluation of future executive compensation policies and decisions. For a review of the results of the previous years’ vote, which reflects overwhelming validation from our stockholders of our pay philosophy and approach, please see the Role of Stockholder Say-on-Pay Advisory Vote summary in the CD&A section.

Notwithstanding the advisory nature of this vote, the foregoing resolution will be deemed approved, on an advisory basis, with the affirmative vote of the majority of the votes cast on the proposal at the Annual Meeting. If you hold your shares through a broker and you do not instruct the broker how to vote, your broker will not have the authority to vote your shares. Abstentions will have the effect as a vote cast against the proposal. Broker non-votes will not be counted as shares present and entitled to vote, and so will have no effect upon the outcome of the vote. Lone Star Value Management has agreed to vote its shares as recommended by Institutional Shareholder Services with respect to the forgoing “Say-on-Pay” resolution.

THEBOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” APPROVAL OF THIS RESOLUTION.

PROPOSAL 3

AMENDMENT TO ARTICLE FOUR OF THE COMPANY’S CERTIFICATE OF INCORPORATION

INCREASING THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

OF THE COMPANY FROM 150 MILLION SHARES TO 300 MILLION SHARES

Proposed Amendment to Certificate of Incorporation

The Board has adopted a resolution approving and recommending to the stockholders for their approval a proposal to amend Article Four of the Company’s Certificate of Incorporation to increase the number of authorized shares of Common Stock from 150 million shares to 300 million shares (the “Article Four Amendment”).

The form of the Article Four Amendment is as follows:

The first sentence of Article Four is hereby amended and restated to be read in its entirety as follows:

“The Corporation shall have authority to issue two classes of stock, and the total number authorized shall be 300,000,000Beneficially Owned or Exchanged Notes held by Kimmeridge, (i) Transfer any such Exchanged Notes or Common Stock or (ii) deposit any such shares of Common Stock par value $.01 per share, and 2,500,000 shares of Preferred Stock, par value $.01 per share.”

Background and Reasons for Increasing the Authorized Shares of Common Stock

We have significantly grown our onshore asset base over the past five years and are seeking the approval of additional authorizedinto a voting trust or enter into a voting agreement or arrangement with respect to such shares of Common Stock or grant any proxy (except as otherwise provided herein) or power of attorney with respect thereto or (iii) agree (regardless of whether in orderwriting) to provide flexibilitytake any of the actions referred to meet the demands of future growth and other corporate obligations. We have a successful track record of funding acquisitions using the proceeds from equity offerings.

For example, during 2015, we raised approximately $183.7 million in gross proceeds from two common equity offerings to support recent acquisitions and our ongoing development efforts in the Midland Basin. In 2015, we acquired nearly 628 net acres located in our existing Carpe Diem and CaBo area (Cassleman-Bohannon fields) located primarily in Midland and Andrews counties for approximately $29.8 million and 305 net acres in our CaBo area for approximately $9.3 million.  These acquisitions contributed significantly to a 70% increase in our net daily production for calendar year 2015 as compared to calendar year 2014. In addition, our net proved reserves at December 31, 2015 increased 65% as compared to year-end 2014. Our market capitalization increased by 122% in 2015 as compared to 2014.

As part of a prudent capital management program in this depressed commodity price environment, we expect to continue to fund possible future strategic acquisitions with the proceeds from equity offerings. As the current capitalization table below indicates, there are only 13,230,793 shares currently available for issuance to accommodate possible equity demands in the future. By not having a sufficient amount of authorized but unissued Common Stock available, our ability to take advantage of potential growth opportunities that might arise is limited.

The Board concurs with this assessment and believes that the recommended increase in the number of authorizedforegoing clause (i) or (ii).

Except as described below, we have no present plans, agreements or understandings for the issuance of any of the additional sharessuch transfer, (ii) Transfer up to be authorized by the proposed amendment. We are actively pursuing several acquisition opportunities with a primary focus on the Permian Basin, including current negotiations and discussions relating to more than one acquisition, which include both producing and non-producing properties (the “Possible Acquisitions”). However, as of the date of the proxy we have not entered into definitive agreements in connection with the Possible Acquisitions. If definitive agreements are ultimately reached, we may, depending on the size of any such Possible Acquisitions, fund all or a portion of any such Possible Acquisitions with net proceeds from the issuance of our Common Stock. There can be no assurances

that an agreement for any of the Possible Acquisitions will be reached or that any Possible Acquisition or any other acquisition will be consummated.

Capitalization Tables

We have outstanding 1,458,948 shares of Series A Cumulative Preferred Stock (“Series A Preferred Stock”) with a total liquidation value of $73 million. The Series A Preferred Stock provides that upon a change of control, generally defined as the acquisition of 50% of the Company’s Common Stock by a person or group of persons and following the acquisition, neither the Company nor the surviving entity has a class of common securities listed on a national securities exchange) (“Change of Control”), we may make a cash offer to purchase the Series A Preferred Stock within 120 days following the Change of Control for the liquidation value plus accrued dividends. The Series A Preferred Stock further provides that if we do not elect (or are unable) to purchase the Series A Preferred Stock for cash, the holders of the Series A Preferred Stock may convert the liquidation value of their holdings into500,000 shares of Common Stock at the then current market price of Common Stock, but in no event more, in the aggregate, than 39,113,887 shares of Common Stock. Based on our Common Stock price as of March 18, 2016, the Series A Preferred Stock would theoretically be able to convert into 8,452,769 Common Shares if all of the events described above occurred.    

Currently, our authorized capital stock consists of 150,000,000or (iii) Transfer shares of Common Stock with the prior written consent the Company.

The proposed amendment to the Certificate of Incorporation does not change the terms of the Common Stock. The additional shares of Common Stock to be authorized by adoptioncounted as present thereat for purpose of establishing a quorum and (y) with respect to any meeting at which a vote of the amendment would have rights identicalCompany’s stockholders is requested, vote, or cause to the currently outstanding Common Stock of the Company. Any future issuance of additionalbe voted at such meeting, all shares of Common Stock then Beneficially Owned by Kimmeridge (including by proxy or written consent, if applicable) as of the record date set therefore: