Callon Calls for Redemption of Outstanding Shares of Convertible Stock

Callon Petroleum Company (NYSE: CPE) has called for redemption all of its outstanding shares of $2.125 Convertible Exchangeable Preferred Stock, Series A. A notice of redemption and letter of transmittal is being mailed to all holders of record as of the close of business on June 10, 2005. The preferred stock will be redeemed on July 14, 2005 at a redemption price equal to $25.213 per share, plus $0.525347, representing all accrued and unpaid dividends to the redemption date. Because the preferred stock is being redeemed prior to the regular quarterly dividend payment date, the company will not be declaring a dividend for this quarter.

Each share of preferred stock is currently convertible into 2.273 shares of the company's common stock. The closing price of the company's common stock on the NYSE on June 10, 2005 was $14.46 per share. Any holders of preferred stock that elect to convert their shares of preferred stock into shares of the company's common stock will not be entitled to any accrued and unpaid dividends. The right of holders of shares of preferred stock to exercise their conversion right terminates at the close of business on July 7, 2005, the fifth business day prior to the redemption date.