EXHIBIT 99.1
For further information contact
John S. Weatherly, CFO 1-800-451-1294
FOR IMMEDIATE RELEASE
CALLON PETROLEUM COMPANY REPORTS
FIRST QUARTER RESULTS
Natchez, MS (May 13, 2003)--Callon Petroleum Company (NYSE:
CPE/CPE.PrA) today reported its results of operations for the quarter ended
March 31, 2003.
For the first quarter of 2003 the company reported net income of
$1,382,000, or earnings of $0.08 per diluted share after the cumulative effect
of change in accounting principle related to Statement of Financial Accounting
Standards (SFAS) No.143 ("Accounting for Asset Retirement Obligations"). This
compares to the 2002 first quarter net loss of $2,454,000, or a loss of $0.21
per share on a diluted basis.
On January 1, 2003, the company adopted SFAS No. 143, which required
companies to record the fair value of a liability for legal obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. As a result, the impact of adopting the statement
resulted in a gain of $181,000, net of tax, which was reported as the cumulative
effect of change in accounting principle.
Net cash flow provided by operating activities before changes in
operating assets and liabilities for the first quarter of 2003 was $12.2
million, or $0.83 per diluted share. The schedule below provides for a
reconciliation of net cash flow provided by operating activities to net cash
flow provided by operating activities before changes in operating assets and
liabilities.
During the first three months of 2003, average daily production, as
well as prices realized for crude oil and natural gas, increased when compared
with the same period of last year.
Operating results for the three-month period ended March 31, 2003
include oil and gas sales of $21.3 million from average daily production of 41.1
million cubic feet of natural gas equivalent per day (MMcfe/d). This corresponds
to sales of $11.1 million from average daily production of 37.3 MMcfe/d during
the same period of 2002. The average price per thousand cubic feet of natural
gas increased to $5.79 compared to $2.34 during the same period a year earlier,
while the average price per barrel of oil increased to $31.32 compared to $18.65
during the first quarter of 2002.
The financial and other statistical guidance presented during the
company's conference call will be available on the company's homepage. In
addition, any reconciliation required pursuant to Regulation G of the Securities
Exchange Act of 1934 will also be available on the company's homepage. This
information can be accessed by logging onto www.callon.com, clicking on the
"Investor Info" button and selecting "2003 Guidance and SEC Regulation G
Disclosure."
Callon Petroleum Company is engaged in the exploration, development,
acquisition and operation of oil and gas properties primarily in the Gulf Coast
region.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
<Table>
<Caption>
THREE MONTHS ENDED
MARCH 31,
------------------------
2003 2002
---------- ----------
Operating revenues:
Oil and gas sales $ 21,268 $ 11,054
---------- ----------
Operating expenses:
Lease operating expenses 2,832 2,564
Depreciation, depletion and amortization 7,402 5,588
Accretion expense* 715 --
General and administrative 1,235 1,139
Loss on mark-to-market commodity derivative contract** 138 388
---------- ----------
Total operating expenses 12,322 9,679
---------- ----------
Income from operations 8,946 1,375
---------- ----------
Other (income) expenses:
Interest 7,181 5,720
Other income (83) (570)
---------- ----------
Total other expenses 7,098 5,150
---------- ----------
Income (loss) before income taxes 1,848 (3,775)
Income tax expense (benefit) 647 (1,321)
---------- ----------
Income (loss) before cumulative effect of change in accounting principle 1,201 (2,454)
Cumulative effect of change in accounting principle, net of tax* 181 --
---------- ----------
Net income (loss) 1,382 (2,454)
Preferred stock dividends 319 319
---------- ----------
Net income (loss) available to common shares $ 1,063 $ (2,773)
========== ==========
Net income (loss) per common share
Basic:
Net income (loss) available to common before cumulative effect of change
in accounting principle $ 0.07 $ (0.21)
Cumulative effect of change in accounting principle, net of tax* 0.01 --
---------- ----------
Net income (loss) available to common $ 0.08 $ (0.21)
========== ==========
Diluted:
Net income (loss) available to common before cumulative effect of change
in accounting principle $ 0.07 $ (0.21)
Cumulative effect of change in accounting principle, net of tax* 0.01 --
---------- ----------
Net income (loss) available to common $ 0.08 $ (0.21)
========== ==========
Shares used in computing net income (loss) per common share:
Basic 13,599 13,315
========== ==========
Diluted 14,192 13,315
========== ==========
</Table>
* Associated with the adoption of SFAS 143
** Associated with SFAS 133
CONSOLIDATED CONDENSED BALANCE SHEETS:
(In thousands)
<Table>
<Caption>
MARCH 31, DECEMBER 31,
2003 2002
---------- -------------
Cash and cash equivalents $ 2,713 $ 5,807
Oil and gas properties, net* 404,205 377,661
All other assets 36,815 27,145
---------- -------------
Total assets $ 443,733 $ 410,613
========== =============
Long-term debt $ 250,392 $ 249,589
All other liabilities* 51,371 20,064
Stockholders' equity 141,970 140,960
---------- -------------
Total liabilities and stockholders' equity $ 443,733 $ 410,613
========== =============
</Table>
* Impacted by the adoption of SFAS No. 143 on January 1, 2003
OTHER FINANCIAL INFORMATION:
(In thousands, except per share amounts)
Net cash provided by operating activities before changes in operating assets and
liabilities is presented because of its acceptance as an indicator of the
ability of an oil and gas exploration and production company to internally fund
exploration and development activities. This measure should not be considered as
an alternative to net cash provided by operating activities as defined by
generally accepted accounting principles. A reconciliation of net cash provided
by operating activities before changes in operating assets and liabilities to
net cash provided by operating activities is shown below:
<Table>
<Caption>
THREE MONTHS
ENDED
--------------
MARCH 31, 2003
--------------
Cash provided by operating activities $ 10,972
Change in operating assets and liabilities 1,181
--------------
Cash provided by operating activities before
changes in operating assets and liabilities $ 12,153
==============
Net cash flow provided per diluted share $ 0.83
==============
Shares used in computing cash flow per common
share diluted: 14,192
==============
</Table>
<Table>
<Caption>
PRODUCTION AND PRICE INFORMATION:
THREE MONTHS ENDED
MARCH 31,
-------------------------
2003 2002
----------- -----------
Production:
Oil (MBbls) 45 54
Gas (MMcf) 3,427 3,029
Gas equivalent (MMcfe) 3,697 3,353
Average daily (MMcfe) 41.1 37.3
Average prices:
Oil ($/Bbl) $ 31.32 $ 18.65
Gas ($/Mcf) $ 5.79 $ 2.34
Gas equivalent ($/Mcfe) $ 5.75 $ 2.42
</Table>
SECOND QUARTER AND FULL YEAR 2003
GUIDANCE ESTIMATES
(IN THOUSANDS, EXCEPT PER PRODUCTION UNIT AMOUNTS)
<Table>
<Caption>
GUIDANCE FOR
GUIDANCE FOR 2ND QUARTER 2003 FULL YEAR 2003
----------------------------- --------------
DESCRIPTION:
Production volumes (MMcfe/d) 35 - 37 48 - 52
Percent Natural Gas 91% 75%
Average costs (per Mcfe):
Lease operating expense $0.82 - $0.78 $0.71 - $0.66
General and administrative expense $0.41 - $0.39 $0.29 - $0.27
Interest expense $2.27 - $2.15 $1.70 - $1.57
Non-cash expenses included above $0.65 - $0.61 $0.48 - $0.44
Accretion expense $0.23 - $0.22 $0.17 - $0.16
DD&A $2.00 $2.00
Fixed delivery contract:
Committed volume (MMcf) 250 1,000
Floor price (per Mcf) $3.75 $3.75
Ceiling price (per Mcf) $4.60 $4.70
Natural gas hedges:
Collars:
Volume (MMcf) 1,600 4,650
Average floor price (per Mcf) $4.02 $4.06
Average ceiling price (per Mcf) $5.10 $5.15
Share data:
Basic weighted average shares 13,700 13,700
Diluted impact of stock equivalents 775 775
Diluted impact of convertible preferred stock 1,366 1,366
</Table>
The preceding guidance estimates contain assumptions that we believe are
reasonable. These estimates are based on information that is available as of the
date of this news release. We are not undertaking any obligation to update these
estimates as conditions change or as additional information becomes available.
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. Some of the factors which could
affect our future results and could cause results to differ materially from
those expressed in our forward-looking statements include:
o general economic conditions;
o volatility of oil and natural gas prices;
o uncertainty of estimates of oil and natural gas reserves;
o impact of competition;
o availability and cost of seismic, drilling and other
equipment;
o operating hazards inherent in the exploration for and
production of oil and natural gas;
o difficulties encountered during the exploration for and
production of oil and natural gas;
o difficulties encountered in delivering oil and natural gas to
commercial markets;
o changes in customer demand and producers' supply;
o uncertainty of our ability to attract capital;
o compliance with, or the effect of changes in, the extensive
governmental regulations regarding the oil and natural gas
business;
o actions of operators of our oil and gas properties;
o weather conditions; and
o the risk factors discussed in our filings with the Securities
and Exchange Commission, including those in our Annual Report
for the year ended December 31, 2002 on Form 10-K.
The preceding estimates reflect our review of continuing operations
only. These estimates do not take into account any material transactions such as
sales of debt and equity securities, acquisitions or divestitures of assets, and
formations of joint ventures. We continually review these types of transaction
and may engage in one or more of these types of transactions without prior
notice.
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