Callon reports improved earnings for quarter, year

NATCHEZ — For the year ended Dec. 31, 2011, Callon Petroleum reported net income of $104.1 million or $2.70 per fully diluted share, as compared to $8.4 million or $0.28 per share for the year ended December 31, 2010.

Included in net income is an income tax benefit of $67 million, primarily related to the reversal of a valuation allowance previously recorded in 2008 against our deferred tax assets.

For the fourth quarter, the company’s net income was $71.7 million, including approximately $63 million of the income tax benefit discussed above, or $1.79 per fully-diluted share, compared to net income of $0.7 million or $0.02 per fully-diluted share for the fourth quarter of 2010. The company reports as a result of the successes realized from the strategies developed in late 2008, which are reflected in our net income from 2009 to 2011, Callon achieved income on an aggregate basis for the three-year period ended Dec. 31, 2011, and together with our future outlook concluded the valuation allowance was no longer required. The company expects sufficient future income to fully utilize all of the deferred tax assets including its net operating losses prior to expiration.

“Over the past three years Callon has transitioned from an offshore to an onshore operator by reinvesting the strong cash flows generated by our deepwater Gulf of Mexico production into low risk onshore oil assets in the Permian Basin,” said Fred Callon, chairman and CEO. “Today, the company controls over 24,000 net acres in the Permian basin and operates 100 percent of current production on the acreage. This area is the foundation of our onshore operations and we will be looking to our Permian operations as our growth catalyst for the next several years.”