Callon Petroleum says that after previously being shut-in due to third-party downstream transmission line and processing facility damage caused by Hurricanes Gustav and Ike, production has resumed at most of its significant facilities located in the Gulf of Mexico.

The Company expects remaining shelf facilities, which are shut-in, to be online within the next several weeks. This should bring the daily production rate to approximately 38 MMcfe\d which equals the Company’s pre-hurricane rate. The Company reaffirms previously issued guidance for the year of a rate of 31-35 MMcfe\d.

Operational Highlights

• Deepwater Medusa Field production restored to pre-hurricane levels of approximately 99.6 MMcfe/d

• Deepwater Habanero Field production restored to pre-hurricane levels of approximately 50.4 MMcfe/d

• Crude oil and natural gas hedges have current cash value in excess of $20 million

Fred Callon, Chairman and CEO of Callon Petroleum said, “As we recently reported, the suspension of operations at Entrada was a major disappointment, however it does not inhibit Callon’s liquidity or ability to grow the company. In these unusual times for our industry Callon remains a viable and adequately capitalized company. Production levels at our two major deepwater fields, Medusa and Habanero, and at most of our shelf properties have returned to pre-hurricane levels. We believe that cash flow from operations, combined with expected year end cash-on-hand, our senior secured credit facility and crude oil and natural gas hedges with a current cash value in excess of $20 million, provide us with significant liquidity to resume our drilling program as well as evaluate other opportunities, including producing property acquisitions.”

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