Clayton Williams Energy Announces Recent Sales of Assets
April 29 2008 - 7:55AM
Business Wire
Clayton Williams Energy, Inc. (NASDAQ:CWEI) reported that it had
recently closed two asset sales. On April 25, 2008, the Company and
its affiliates sold all of their interests in 16 producing wells in
South Louisiana to EnergyQuest II, LLC, a Quantum Energy Partners
IV, LP portfolio company, for approximately $95 million, based on
an effective date of March 1, 2008 and subject to customary closing
adjustments. The assets that were sold in this transaction
represented about half of the Company�s proved developed reserves
in South Louisiana. The Company retained its interests in the
Floyd, Alabama and Fleur prospects, as well as all of its holdings
in other undeveloped prospects in South Louisiana. None of the
Company�s holdings in North Louisiana were included in this sale.
The Company expects to record a gain of approximately $33 million
in the second quarter of 2008 in connection with this transaction.
Proceeds from the sale were used to repay indebtedness on the
Company�s revolving credit facility, reducing the balance
outstanding on the facility to approximately $60 million on the
closing date. Also, on April 23, 2008 the Company sold a surplus
well servicing unit to an undisclosed buyer for $1.8 million. In
2007, the Company recorded a loss on impairment of $1.1 million to
reduce the carrying value of this asset to its estimated fair value
of $1.5 million. The Company will record a gain of approximately
$300,000 on the sale of this asset in the second quarter of 2008.
Clayton Williams Energy, Inc. is an independent energy company
located in Midland, Texas. Except for historical information,
statements made in this release are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
statements are based on assumptions and estimates that management
believes are reasonable based on currently available information;
however, management's assumptions and the Company's future
performance are subject to a wide range of business risks and
uncertainties, and there is no assurance that these goals and
projections can or will be met. Any number of factors could cause
actual results to differ materially from expectations, volatility
of oil and gas prices, the need to develop and replace reserves,
the substantial capital expenditures required to fund operations,
exploration risks, uncertainties about estimates of reserves,
competition, government regulation, costs and results of drilling
new projects, and mechanical and other inherent risks associated
with oil and gas production. These risks and uncertainties are
described in the Company's filings with the Securities and Exchange
Commission. The Company undertakes no obligation to publicly update
or revise any forward-looking statements.
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