928022--3/12/2010--CALLON_PETROLEUM

related topics

{gas, price, oil}

{cost, regulation, environmental}

{loss, insurance, financial}

{acquisition, growth, future}

{operation, natural, condition}

{property, intellectual, protect}

{regulation, change, law}

{control, financial, internal}

{competitive, industry, competition}

We may fail to fully identify problems with any properties we acquire. If the United States experiences a sustained economic downturn or recession, oil and natural gas prices may fall or remain at their current prices for an extended period of time, which may adversely affect our results of operations. We may not be able to obtain funding on acceptable terms or at all. Hedging transactions and receivables expose us to counterparty credit risk. The adoption of derivatives legislation or regulations related to derivative contracts could have an adverse impact on our ability to hedge risks associated with our business. Depressed oil and gas prices may adversely affect our results of operations and financial condition Our reserve information represents estimates that may turn out to be incorrect if the assumptions upon which these estimates are based are inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves. Unless we are able to replace reserves that we have produced, our cash flows and production will decrease over time. A significant part of the value of our production and reserves is concentrated in a small number of offshore properties, and any production problems or inaccuracies in reserve estimates related to those properties would adversely impact our business. Our exploration projects increase the risks inherent in our oil and gas activities. We do not operate all of our properties, and have limited influence over the operations of some of these properties, particularly our two deepwater properties. Competitive industry conditions may negatively affect our ability to conduct operations. Our competitors may use superior technology, which we may be unable to afford, or which would require costly investment by us in order to compete. Further increasing our exposure to this risk, we may not be able to replace our reserves or generate cash flows if we are unable to raise capital. We will be required to make substantial capital expenditures to acquire proved producing properties, develop our existing reserves, and to discover new oil and gas reserves. Our decision to drill a prospect is subject to a number of factors, and we may decide to alter our drilling schedule or not drill at all. Weather, unexpected subsurface conditions, and other unforeseen operating hazards may adversely impact our ability to conduct business. We may not have production to offset hedges; by hedging, we may not benefit from price increases. Compliance with environmental and other government regulations could be costly and could negatively impact production. Climate Change Legislation or regulations restricting emissions of greenhouse gasses could result in increased operating costs and reduced demand for the oil and gas we produce. Significant physical effects of climatic change have the potential to damage our facilities, disrupt our production activities and cause us to incur significant costs in preparing for or responding to those effects. Federal legislation and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays. Factors beyond our control affect our ability to market production and our financial results. If oil and gas prices decrease or remain depressed for extended periods of time, we may be required to take additional writedowns of the carrying value of our oil and gas properties. There are inherent limitations in all control systems, and misstatements due to error or fraud that could seriously harm our business may occur and not be detected.

Full 10-K form ▸

928022--3/12/2010--CALLON_PETROLEUM_CO