928022--3/17/2008--CALLON_PETROLEUM

related topics

{gas, price, oil}

{operation, natural, condition}

{loss, insurance, financial}

{financial, litigation, operation}

{cost, regulation, environmental}

{property, intellectual, protect}

{control, financial, internal}

{competitive, industry, competition}

{operation, international, foreign}

A decrease in 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. Information about reserves constitutes forward-looking information. See Forward-Looking Statements for information regarding forward-looking information. Unless we are able to replace reserves which 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 focus on exploration projects increases 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 two of our deepwater properties. Our deepwater operations have special operational risks that may negatively affect the value of those assets. 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. 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 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. Factors beyond our control affect our ability to market production and our financial results. If oil and gas prices decrease, we may be required to take 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.

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928022--3/17/2008--CALLON_PETROLEUM_CO