UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 11-K

ANNUAL REPORT PURSUANT TO SECTION 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

þ		Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2007.

OR

o		Transition report pursuant to Section 15(d) of the Securities Exchange Act of l934

For the transition period from                      to                                         

A.

Full title of plan and the address of the plan, if different from that of the issuer named below:

B.

Name of the issuer of the securities held pursuant to the plan and the address of its executive office:

CALLON PETROLEUM COMPANY

200 NORTH CANAL STREET
NATCHEZ, MISSISSIPPI 39120

 

 

The Callon Petroleum Company Employee Savings and Protection Plan (the “Plan”) is subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Attached hereto are the financial statements of the Plan for the fiscal year ended December 31, 2007 prepared in accordance with the financial reporting requirements of ERISA.

CALLON PETROLEUM COMPANY
EMPLOYEE SAVINGS AND
PROTECTION PLAN
Employer I.D. Number 94-0744280
Plan Number 002

December 31, 2007 and 2006 and
Year Ended December 31, 2007

CONTENTS

Report of Independent Registered Public Accounting Firm			1
Financial Statements
Statements of Net Assets Available for Benefits			2
Statement of Changes in Net Assets Available for Benefits			3
Notes to Financial Statements			4 – 9
Supplementary Information
Schedule of Assets (Held at End of Year)			10 – 12
Consent of HORNE LLP

Note: Supplemental schedules required by the Employee Retirement Income Security Act of 1974 not included herein are deemed not applicable to Callon Petroleum Company Employee Savings and Protection Plan.

REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

To Participants and Plan Administrators
   of the Callon Petroleum Company
   Employee Savings and Protection Plan

We have audited the accompanying statements of net assets available for benefits of the Callon Petroleum Company Employee Savings and Protection Plan (the “Plan”) as of December 31, 2007 and 2006, and the related statement of changes in net assets available for benefits for the year ended December 31, 2007. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Callon Petroleum Company Employee Savings and Protection Plan as of December 31, 2007 and 2006, and the changes in net assets available for benefits for the year ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held at end of year as of December 31, 2007 is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the United States Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Jackson, Mississippi
June 25, 2008

CALLON PETROLEUM COMPANY
EMPLOYEE SAVINGS AND PROTECTION PLAN

Statements of Net Assets Available for Benefits
December 31, 2007 and 2006

		2007				2006
ASSETS
Investments
Participant directed
Pooled separate accounts		$	14,955,637			$	12,941,331
Participant loans			932,753				781,787
Employer securities			2,665,773				2,602,797
Total investments			18,554,163				16,325,915
Employer contribution receivable			43,920				34,949
Total assets		$	18,598,083			$	16,360,864
Net assets available for benefits		$	18,598,083			$	16,360,864

See accompanying notes.

CALLON PETROLEUM COMPANY
EMPLOYEE SAVINGS AND PROTECTION PLAN

Statement of Changes in Net Assets
Available for Benefits
Year Ended December 31, 2007

Additions to net assets attributed to
Investment income
Net appreciation in fair value of investments		$	740,719
Interest			39,607
Dividends			276,148
Total investment income			1,056,474
Contributions
Employer — cash			563,847
Employer — noncash			200,188
Employee			732,295
Rollover			17,675
Total contributions			1,514,005
Total additions			2,570,479
Deductions from net assets attributed to
Benefits paid to participants			308,892
Administrative and other expenses			3,060
Total deductions			311,952
Net increase			2,258,527
Transfers from the plan			(21,308	)
Net assets available for plan benefits
Beginning of year			16,360,864
End of year		$	18,598,083

See accompanying notes.

CALLON PETROLEUM COMPANY
EMPLOYEE SAVINGS AND PROTECTION PLAN
December 31, 2007 and 2006 and
Year Ended December 31, 2007

NOTES TO FINANCIAL STATEMENTS

Note 1. Description of the Plan

The following description of the Callon Petroleum Company Employee Savings and Protection Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.

General

Employees of Callon Petroleum Company (the “Company”) become eligible to participate in the Plan on the first eligibility date of their employment and attainment of age twenty-one. Eligibility dates are the first day of each month. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

Contributions

Participating employees may make salary deferrals up to the maximum allowable by the Internal Revenue Service. For the year ended December 31, 2007, the Company contributed a 2.5 percent non-matching contribution in cash and a 2.5 percent non-matching contribution in the form of Callon Petroleum Company common stock for each employee’s eligible compensation. The Company also made a matching contribution at the rate of .625 percent in cash of every 1 percent that was deferred by the participant, limited to a maximum matching contribution by the Company of 5 percent in cash.

Participant Accounts

Each participant’s account is credited with the participant’s contribution, the Company’s matching contribution and earnings thereon and an allocation of the Company’s non-matching contribution, and Plan earnings. Allocations are based on participant compensation or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

Investment Options

Participants direct contributions, including employer cash matching contributions, into any of the investment options offered by ING. Participants may change their investment options at any time.

Vesting

Participants are immediately vested in their voluntary contributions plus actual earnings thereon and in the Company’s contributions and earnings thereon.

CALLON PETROLEUM COMPANY
EMPLOYEE SAVINGS AND PROTECTION PLAN
December 31, 2007 and 2006 and
Year Ended December 31, 2007

NOTES TO FINANCIAL STATEMENTS

Note 1. Continued

Participant Loans

Loans are available to participants on a reasonably equivalent basis, at a minimum amount of $1,000 and bearing interest at a reasonable rate. Participants have up to 5 years to repay the loan unless it is for a principal residence, in which case the repayment period is 30 years. Each loan is secured by the borrowing participant’s vested account balance; however, additional collateral may also be required. For the year ended December 31, 2007, the Plan allowed participants to borrow up to seven loans at a time, which consist of five regular loans and two residential loans. The maximum of any new loans, when added to the outstanding balance of all other loans from the Plan, will be limited to the lesser of (a) $50,000 reduced by the excess, if any, of the participant’s highest outstanding balance of loans from the Plan during the one-year period ending on the day before the date of the new loan over the participant’s current outstanding balance of loans as of the date of the new loan, or (b) one-half of the participant’s vested interest in the Plan.

Payment of Benefits

Upon termination of service, a participant may elect to (a) receive a lump sum equal to the value of the participant’s vested interest in his or her account, or (b) receive installments over a period not to exceed the employee’s and beneficiary’s assumed life expectancy.

Plan Termination

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA.

Note 2. Summary of Significant Accounting Principles

Basis of Presentation

The accompanying financial statements of the Plan have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

CALLON PETROLEUM COMPANY
EMPLOYEE SAVINGS AND PROTECTION PLAN
December 31, 2007 and 2006 and
Year Ended December 31, 2007

NOTES TO FINANCIAL STATEMENTS

Note 2. Continued

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

Investment Valuation and Income Recognition

All Plan investments as of December 31, 2007 and 2006 are held by ING, the Plan custodian. Investments in pooled separate accounts are reported at the value reported to the Plan by ING, which approximates fair value. Investments in the Company common stock is reported at quoted market values. Participant’s loans are valued at their outstanding principal balances, which approximate fair value.

Investment security transactions are accounted for on the date the securities are purchased or sold (trade date). Interest income is recorded as it is earned. Dividends are recorded on the ex-dividend date.

Payment of Benefits

Benefits are recorded when paid.

Administrative Expenses

The Company absorbs substantially all administrative expenses of the Plan. The Company paid approximately $33,000 for administrative expenses for 2007.

Note 3. Investments

The following table presents the fair value of the Plan’s investments that represent 5 percent or more of the Plan’s net assets at December 31, 2007 and 2006.

		2007				2006
Pooled separate accounts
ING Fixed Account		$	7,004,180			$	6,734,740
Fidelity VIP Growth Portfolio		$	1,263,366			$	773,387

CALLON PETROLEUM COMPANY
EMPLOYEE SAVINGS AND PROTECTION PLAN
December 31, 2007 and 2006 and
Year Ended December 31, 2007

NOTES TO FINANCIAL STATEMENTS

Note 3. Continued

		2007				2006
Employer securities
Callon Petroleum Company Stock		$	2,665,773			$	2,602,797
Participant loans		$	932,753			$	781,787

The Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated $740,719 during the year ended December 31, 2007 as follows:

Pooled separate accounts		$	496,412
Employer securities
Callon Petroleum Company stock			244,307
Net appreciation in fair value of investments		$	740,719

Note 4. Tax Status of Plan

The trust established under the Plan to hold the Plan’s assets is qualified pursuant to the appropriate section of the Internal Revenue Code, and, accordingly, the trust’s net investment income is exempt from income taxes. The Plan has obtained a favorable tax determination letter from the Internal Revenue Service. Although the Plan has been amended since receiving the determination letter, the Plan’s Administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code.

Note 5. Related-Party Transactions

The investment in pooled separate accounts is managed by ING. ING is the custodian of the Plan assets as defined by the Plan and, therefore, transactions in these investments, as well as investments in employer securities and participant loans, qualify as exempt party-in-interest transactions. Fees paid by the Company for the investment management services totaled to approximately $33,000 for the year ended December 31, 2007.

Note 6. Risks and Uncertainties

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain

CALLON PETROLEUM COMPANY
EMPLOYEE SAVINGS AND PROTECTION PLAN
December 31, 2007 and 2006 and
Year Ended December 31, 2007

NOTES TO FINANCIAL STATEMENTS

Note 6. Continued

investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits.

Note 7. Prohibited Transactions

During 2007, the Plan sponsor inadvertently failed to deposit approximately $900 of participant loan repayments within the timeframe required by the United States Department of Labor (“DOL”). The DOL considers late deposits to be prohibited transactions. The Plan sponsor will file Form 5330 and pay applicable excise tax. The excise tax payments will be made from the Plan sponsor’s assets and not from assets of the Plan.

Note 8. Reconciliation of Financial Statements to Form 5500

The financial information included in the Plan’s Form 5500 is reported on the cash basis of accounting. Therefore, the following reconciliation is included to reconcile the net assets available for benefits and the net increase in net assets available for benefits per the financial statements to the Form 5500.

The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:

		December 31,
		2007				2006
Net assets available for benefits per the financial statements		$	18,598,083			$	16,360,864
Employer contribution receivable			(43,920	)			(34,949	)
Net assets available for benefits per the Form 5500		$	18,554,163			$	16,325,915

CALLON PETROLEUM COMPANY
EMPLOYEE SAVINGS AND PROTECTION PLAN
December 31, 2007 and 2006 and
Year Ended December 31, 2007

NOTES TO FINANCIAL STATEMENTS

Note 8. Continued

The following is a reconciliation of net increase in net assets available for benefits per the financial statements to the Form 5500:

		Year Ended
		December 31,
		2007
Net increase in net assets available for benefits per the financial statements		$	2,258,527
Less current year employer contribution receivable			(43,920	)
Plus prior year employer contribution receivable			34,949
Net increase in net assets available for benefits per the Form 5500		$	2,249,556

Page 1 of 3

CALLON PETROLEUM COMPANY
EMPLOYEE SAVINGS AND PROTECTION PLAN
Employee Identification Number 94-0744280
Plan Number 002
Schedule H, line 4(i)

Schedule of Assets (Held at End of Year)
December 31, 2007

		(c) Description of Investment,
(b) Identity of Issue,		Including Maturity Date,
Borrower, Lessor		Rate of Interest, Collateral,						(e) Current
or Similar Party		Par or Maturity Value		(d) Cost				Value
Pooled accounts
*ING		Fixed Account						$	7,004,180
*ING		VP Money Market Portfolio 14,250.171 shares							170,250
*ING		GNMA Income Fund 4,012.971 shares							51,346
*ING		PIMCO Total Return 4,274.714 shares							57,749
*ING		Pioneer High Yield Fund 18,388.697 shares							308,939
*ING		Van Kampen Equity & Income Fund 11,602.426 shares							163,540
*ING		VP Strategic Allocation Balanced 3,769.960 shares							48,304
*ING		VP Strategic Allocation Income 6,151.147 shares							81,629
*ING		Oppenheimer Capital Income Fund 32,945.614 shares							475,000
*ING		Alliance Bernstein VPS Growth and Income Portfolio 48,828.525 shares							702,867
*ING		Van Kampen Comstock Portfolio 15,128.838 shares							222,863
*ING		VP Index Plus Large Cap Portfolio 31,360.058 shares							325,001
*ING		Fidelity VIP Growth Portfolio 137,804.517 shares							1,263,366
*ING		Fidelity VIP II Contrafund 34,746.277 shares							563,834
*ING		T. Rowe Price Growth Equity Portfolio 14,152.137 shares							159,388

Page 2 of 3

CALLON PETROLEUM COMPANY
EMPLOYEE SAVINGS AND PROTECTION PLAN
Employee Identification Number 94-0744280
Plan Number 002
Schedule H, line 4(i)
Schedule of Assets (Held at End of Year)
December 31, 2007

		(c) Description of Investment,
(b) Identity of Issue,		Including Maturity Date,
Borrower, Lessor		Rate of Interest, Collateral,						(e) Current
or Similar Party		Par or Maturity Value		(d) Cost				Value
*ING		Ariel Appreciation Fund 1,902.315 shares						$	25,921
*ING		Ariel Fund 18,929.802 shares							385,468
*ING		Baron Growth Fund 22,044.350 shares							447,625
*ING		Fidelity Advisor Mid Cap Fund 10,517.061 shares							164,905
*ING		Franklin Balance Sheet Investment Fund 2,185.162 shares							45,267
*ING		Franklin Small-Mid Cap Growth Fund 31,869.538 shares							280,723
*ING		American Century Small Cap Value Portfolio 4,026.794 shares							64,696
*ING		VP Index Plus Small Cap Portfolio 1,794.881 shares							30,321
*ING		Lord Abbett Mid-Cap Value Fund 8,796.438 shares							156,527
*ING		Jennison Equity Opportunity Fund 8,688.848 shares							129,223
*ING		VP International Value Portfolio 24,149.257 shares							474,574
*ING		Oppenheimer Global Portfolio 15,370.648 shares							273,298
*ING		Templeton Foreign Fund 7,409.405 shares							151,593
*ING		Templeton Growth Fund 6,118.164 shares							117,722
*ING		Solution 2015 Portfolio 15,853.112 shares							196,257

Page 3 of 3

CALLON PETROLEUM COMPANY
EMPLOYEE SAVINGS AND PROTECTION PLAN
Employee Identification Number 94-0744280
Plan Number 002
Schedule H, line 4(i)
Schedule of Assets (Held at End of Year)
December 31, 2007

		(c) Description of Investment,
(b) Identity of Issue,		Including Maturity Date,
Borrower, Lessor		Rate of Interest, Collateral,						(e) Current
or Similar Party		Par or Maturity Value		(d) Cost				Value
*ING		Solution 2025 Portfolio 13,312.657 shares						$	171,071
*ING		Solution 2035 Portfolio 8,473.645 shares							112,801
*ING		Solution 2045 Portfolio 12.952 shares							178
*ING		Solution Income Portfolio 11,091.302 shares							129,211
		Total pooled accounts							14,955,637
*Participant Loans		4.75 percent interest rate, maturity of up to 5 years, with residential loans maturing in 30 years							932,753
*Callon Petroleum Company		162,053.070 shares							2,665,773
								$	18,554,163

SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on their behalf by the undersigned hereunto duly authorized.

				CALLON PETROLEUM COMPANY (Registrant)
Date:		June 30, 2008		By:		/s/ Fred L. Callon
				Fred L. Callon
				President and Chief Executive Officer
				(on behalf of the registrant and as the principal financial officer)

EXHIBIT INDEX

Exhibit Index		Description
23.1		Consent of HORNE LLP, independent registered public accounting firm