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Fred Callon Dies Unexpectedly

Fred Callon, chairman and CEO of Callon Petroleum Co., who helped propel the namesake independent into a leading Permian Basin operator, died on Wednesday.

Authorities said Callon, 67, had been on a business trip to Denver. The company, headquartered in Natchez, MS, announced his death to employees on Thursday morning.

"It is with great sorrow that we announce the untimely passing of our dear friend and esteemed CEO," CFO  Joe Gatto said. "Fred was, and always will be, the symbol of Callon's core values and dedication to our employees. We extend our deepest sympathies to Fred's family."

The board of directors planned to convene Thursday "to ensure the continuity of its strategic direction and operations," Gatto said.

Callon, CEO of the company since January 1997 and chairman since May 2004, previously was president and COO. He had worked for the company since 1984 as the son of co-founder Sim C. Callon and nephew of co-founder John S. Callon.

Callon graduated from Millsaps College in 1972 and received his master's degree from the Wharton School of Finance in 1974. Following graduation and until his employment by Callon Petroleum Operating Co., he was employed by Peat, Marwick, Mitchell & Co., certified public accountants.

The company, which trades on the New York Stock Exchange under "CPE,” was founded in Natchez in 1950 and today also has offices in Houston and in Midland, TX.

Callon Petroleum has been on a tear in the Permian over the last couple of years. In December the company agreed to pay $615 million to gain entry into the Southern Delaware sub-basin, giving it a 30% boost in acreage and a complement to its Midland sub-basin operations.

Fred Callon said in December the Delaware entry had capped "a transformative year" for the company. Last September the company paid $327 million to buy 5,667 net acres primarily in Howard County, TX, within the Midland sub-basin. That deal built on a $334 million purchase of 16,000 net acres last April, also in the Midland.

During a first quarter results conference call held earlier this month, Fred Callon reflected on the company's Permian growth.

"We're off to a good start so far this year, with double-digit production growth coupled with a 17% reduction in our lease operating expenses," the CEO said. He also outlined the company's planned strategy for the next several quarters within its Permian operating areas.

"As always, we will be focused on full-cycle returns and we'll be investing in the proper infrastructure and facilities to increase capital efficiency," Callon added. "We will also remain focused on preserving a strong balance sheet and liquidity position, which will allow us to manage any commodity price volatility as well as, opportunistically, add bolt-on acreage at attractive prices within our existing financial means. Overall, we see 2017 as a year that will highlight the growth potential of our WildHorse position, underpinned by the underlying strength at our Monarch drilling program as well as a return to drilling in the Ranger area."

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