Callon Petroleum increases third-quarter earnings

Published 2:15 pm Thursday, November 13, 2008

Callon Petroleum Co. says its profit for the quarter ending Sept. 30 was $5.9 million, or 27 cents per share, a major increase from the same period a year ago.

In the third quarter of 2007, the Natchez-based oil and gas exploration and production company reported net income of just $2.3 million, 11 cents per share.

The company said Monday in a release that net income rose 156 percent in the third quarter of 2008 from the same period a year ago.

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For the nine months ending Sept. 30, Callon reported net income of $18.6 million, or 85 cents per share, compared with net income of $10.7 million, or 50 cents per share, during the same period of 2007.

The third-quarter results were positive, but below what the company estimated.

Fred L. Callon, chairman and chief executive officer, said in a conference call that the company’s third quarter was impacted by two hurricanes. On August 30, several of the company’s fields had to halt production due to the approach of Hurricanes Gustav and Ike.

Gustav made landfall on Labor Day on the Gulf Coast. About two weeks later, Ike shut down or reduced work at more than a dozen refineries in the Gulf.

“While we did not sustain any significant damage to our major production facilities as a result of Hurricane Gustav and Ike, the industry is still dealing with the damage to the pipeline infrastructure,” Callon said. “The storms had a greater impact on the offshore and gas industry than perhaps first reported.”

More than two weeks after Ike, many refineries were still making fuel at reduced levels.

He said Callon Petroleum had “deferred production of 12.6 million cubic feet of gas a day for the third quarter.”

“We continue to feel the impact of down time in the fourth quarter and we’re estimating additional deferred production of 18 million a day for the fourth quarter,” Callon said.

Bobby F. Weatherly, Callon’s chief financial officer, says “our daily production rate for the third quarter was 25.9 million cubic feet per day.”

In trading Tuesday, Callon shares closed down 7 cents at $10.03. The shares have traded in a 52-week range of $6.46 to $28.93.