Energy Prospectus

Moody's Investors Service, ("Moody's") assigned a B3 rating to Callon Petroleum Company's ("Callon") proposed senior unsecured notes due 2026 and changed Callon Petroleum Company's outlook to positive from stable. Moody's also affirmed Callon's existing ratings, including the B2 Corporate Family Rating (CFR), B2-PD Probability of Default Rating and the B3 rating on the existing notes due 2024.

If you are investing for High Yield, take a look at Callon's preferred stock. Moody's upgrade is positive.

Dan,

Would appreciate your view of the market's current treatment of Callon. PPS has declined from $14 on 5/22 to $11 on 6/1. Yes, small caps are more volatile, and a 21% decline in 8 trading sessions certainly qualifies as volatile.

In addition to the upsized ($400 mm, as of 5/31) unsecured note offering, on 5/30 they announced closing of a common stock offering and full exercise of overallotment (total 25.3 mm shares), taking their total common s/o to 227.5 mm (so about 12% dilution).

Currently, there is a lot of publicity surrounding crude price differentials in the Permian, especially for smaller companies that do not have takeaway capacity secured contractually. Obviously also, capacity constraints for ngas there is in the news.

Does Callon have takeaway capacity contractually secured?

Besides the above, are there any other issues that might explain recent weakness?

Thanks.