Callon to Sell 2% of Onshore Interests for $61.5 Million

Callon Petroleum Company has signed an agreement with Indigo Minerals LLC to sell certain non-core, non-operated royalty and mineral interests for $61.5 million. The proposed sale is effective Dec. 1, 2007 and is subject to customary closing adjustments. The buyer is a private company based in Houston, Texas, and the transaction is expected to close before year end.

These non-operated, onshore royalty and mineral interests represent less than 2% of Callon's estimated current net proved reserves and are widely dispersed in 15 different states throughout the United States. Production, net to Callon, from the properties being sold is approximately 420 barrels of oil equivalent per day.

"Although we have owned these properties for many years, they have no strategic significance for Callon and favorable market conditions created a unique and attractive opportunity to accelerate the realization of value from these non-core, non-operated interests," noted Fred Callon, president and CEO. "Proceeds from the sale will strengthen our balance sheet and provide the company with additional liquidity as we continue the development of our deepwater fields."

Callon Petroleum Company is engaged in the acquisition, exploration, development and operation of oil and gas properties primarily offshore in the Gulf of Mexico. More than 80% of Callon's oil and gas reserves are located in the deepwater Gulf of Mexico with approximately 55% consisting of crude oil.