Clayton Williams Energy, Inc. (NASDAQ: CWEI) today
filed a Form 8-K with the Securities and Exchange Commission to
provide financial guidance disclosures for the year ending December
31, 2010. This guidance was furnished to provide public disclosure
of the estimates being used by the Company to model its anticipated
results of operations for the periods presented.
A copy of these disclosures accompanies this release or may be
obtained electronically by accessing the Company’s website at
www.claytonwilliams.com.
Clayton Williams Energy, Inc. is an independent energy company
located in Midland, Texas.
This release contains 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. All statements, other
than statements of historical or current facts, that address
activities, events, outcomes and other matters that we plan,
expect, intend, assume, believe, budget, predict, forecast,
project, estimate or anticipate (and other similar expressions)
will, should or may occur in the future are forward-looking
statements. These forward-looking statements are based on
management’s current belief, based on currently available
information, as to the outcome and timing of future events. The
Company cautions that its future oil and natural gas production,
revenues, cash flows, liquidity, plans for future operations,
expenses, outlook for oil and natural gas prices, timing of capital
expenditures and other forward-looking statements are subject to
all of the risks and uncertainties, many of which are beyond our
control, incident to the exploration for and development,
production and marketing of oil and gas.
These risks include, but are not limited to, the possibility of
unsuccessful exploration and development drilling activities, our
ability to replace and sustain production, commodity price
volatility, domestic and worldwide economic conditions, the
availability of capital on economic terms to fund our capital
expenditures and acquisitions, our level of indebtedness, the
impact of the current economic environment on our business
operations, financial condition and ability to raise capital,
declines in the value of our oil and gas properties resulting in a
decrease in our borrowing base under our credit facility and
impairments, the ability of financial counterparties to perform or
fulfill their obligations under existing agreements, the
uncertainty inherent in estimating proved oil and gas reserves and
in projecting future rates of production and timing of development
expenditures, drilling and other operating risks, lack of
availability of goods and services, regulatory and environmental
risks associated with drilling and production activities, the
adverse effects of changes in applicable tax, environmental and
other regulatory legislation, and other 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.
Financial Guidance Disclosures
Follow
CLAYTON WILLIAMS ENERGY,
INC.FINANCIAL GUIDANCE DISCLOSURES FOR 2010
Overview
Clayton Williams Energy, Inc. and its subsidiaries have prepared
this document to provide public disclosure of certain financial and
operating estimates in order to permit the preparation of models to
forecast our operating results for each quarter during the year
ending December 31, 2010. These estimates are based on
information available to us as of the date of this filing, and
actual results may vary materially from these estimates. We do not
undertake any obligation to update these estimates as conditions
change or as additional information becomes available.
The estimates provided in this document are based on assumptions
that we believe are reasonable. Until our actual results of
operations for these periods have been compiled and released, all
of the estimates and assumptions set forth herein constitute
“forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, included in this document that
address activities, events or developments that we expect, project,
believe or anticipate will or may occur in the future, or may have
occurred through the date of this filing, including such matters as
production of oil and gas, product prices, oil and gas reserves,
drilling and completion results, capital expenditures and other
such matters, are forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties, and
other factors that may cause our actual results, performance, or
achievements to be materially different from the results,
performance, or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the
following: the volatility of oil and gas prices; the unpredictable
nature of our exploratory drilling results; the reliance upon
estimates of proved reserves; operating hazards and uninsured
risks; competition; government regulation; and other factors
referenced in filings made by us with the Securities and Exchange
Commission.
As a matter of policy, we
generally do not attempt to provide guidance on:
(a) production which may be obtained through future
exploratory drilling; (b) dry hole and abandonment costs that may
result from future exploratory drilling; (c) the effects of
Statement of Financial Accounting Standards No. 133, “Accounting
for Derivative Instruments and Hedging Activities” superseded by
topic 815-10 of the Financial Accounting Standards Board Accounting
Standards Codification; (d) gains or losses from sales of property
and equipment unless the sale has been consummated prior to the
filing of financial guidance; (e) capital expenditures related to
completion activities on exploratory wells or acquisitions of
proved properties until the expenditures are estimable and likely
to occur; and (f) revenues and expenses related to Desta Drilling,
L.P., a wholly-owned subsidiary of the Company which provides
contract drilling services for the Company.
Summary of Estimates
The following table sets forth actual and certain estimates
being used by us to model our anticipated results of operations for
each quarter during the fiscal year ending December 31, 2010. When
a single value is provided, such value represents the mid-point of
the approximate range of estimates. Otherwise, each range of values
provided represents the expected low and high estimates for such
financial or operating factor. See “Supplementary Information.”
Year Ending December 31, 2010 Actual
Actual Estimated Estimated
First Quarter Second Quarter Third Quarter
Fourth Quarter (Dollars in thousands, except per unit
data) Average Daily Production: Oil (Bbls) 8,356 8,879
9,425 to 9,625 10,000 to 10,200 Gas (Mcf) 36,978 30,846 25,000 to
29,000 24,500 to 28,500 Natural gas liquids (Bbls) 633 659 800 to
850 750 to 800 Total oil equivalents (BOE) 15,152 14,679 14,392 to
15,308 14,833 to 15,750
Differentials: Oil (Bbls) $
(2.72 ) $ (3.77 ) $(2.75) to $(3.25) $(2.75) to $(3.25) Gas (Mcf) $
0.72 $ 0.80 $0.05 to $0.35 $0.05 to $0.35 Natural gas liquids
(Bbls) $ (32.54 ) $ (37.91 ) $(32.00) to $(38.00) $(32.00) to
$(38.00)
Costs Variable by Production ($/BOE):
Production expenses (including production taxes) $ 15.34 $ 15.39
$14.75 to $15.75 $14.50 to $15.50 DD&A – Oil and gas properties
$ 18.03 $ 18.57 $18.00 to $19.00 $18.00 to $19.00
Other
Revenues (Expenses): Natural gas services: Revenues $ 503 $ 452
$450 to $550 $450 to $550 Operating costs $ (348 ) $ (306 ) $(300)
to $(500) $(300) to $(500) Exploration costs: Abandonments and
impairments $ (2,878 ) $ (2,891 ) $(1,500) to $(3,500) $(1,500) to
$(3,500) Seismic and other $ (1,660 ) $ (974 ) $(250) to $(750)
$(250) to $(750) DD&A – Other (a) $ (171 ) $ (170 ) $(250) to
$(350) $(250) to $(350) General and administrative (a) $ (6,166 ) $
(7,783 ) $(6,100) to $(6,300) $(6,000) to $(6,200) Interest expense
(a) $ (6,108 ) $ (6,242 ) $(5,700) to $(5,900) $(5,900) to $(6,100)
Other income (expense) $ 828 $ 1,016 $250 to $350 $250 to $350 Gain
(loss) on sales of assets, net $ 286 $ (1,330 ) $3,000 to $3,200
$-
Effective Federal and State Income Tax Rate:
Current 0 % 0 % 0 % 0 % Deferred 36 % 35 % 36 % 36 %
Weighted Average Shares Outstanding (In thousands):
Basic 12,146 12,146 12,146 12,146 Diluted 12,146 12,146 12,146
12,146
______________
(a) Excludes amounts derived from Desta Drilling, L.P.
Capital Expenditures
The following table sets forth, by area, our actual expenditures
for exploration and development activities for the first half of
2010 and our planned expenditures for the year ending December 31,
2010.
Actual Planned
Expenditures Expenditures 2010 Six Months
Ended Year Ended Percentage June 30, 2010
December 31, 2010 of Total (In thousands)
Permian Basin $ 98,800 $ 224,900 71 % Austin Chalk (Trend)/Eagle
Ford Shale 32,100 74,200 24 % South Louisiana 5,000 8,700 3 %
California 700 2,000 1 % Other 3,800 5,600 1 % $
140,400 $ 315,400 100 %
We currently plan to spend approximately $315.4 million on
exploration and development activities in fiscal 2010 compared to
our prior estimate of $281.9 million. A significant portion of the
increase is attributable to our acquisition of certain leases in
our Wolfberry play in Andrews County, Texas for $9.6 million, after
giving effect to customary closing adjustments. Our actual
expenditures during fiscal 2010 may be substantially higher or
lower than these estimates since our plans for exploration and
development activities may change during the year. Other factors,
such as prevailing product prices and the availability of capital
resources, could also increase or decrease the ultimate level of
expenditures during fiscal 2010.
Based on these current estimates, approximately 96% of our
planned expenditures for exploration and development activities for
fiscal 2010 will relate to developmental prospects, as compared to
approximately 60% in fiscal 2009.
Supplementary Information
Oil and Gas Production
The following table summarizes, by area, our actual and
estimated daily net production for each quarter during the year
ending December 31, 2010. These estimates represent the approximate
mid-point of the estimated production range.
Daily Net Production for 2010 Actual
Actual Estimated Estimated
First Quarter Second Quarter Third Quarter
Fourth Quarter Oil (Bbls): Permian Basin 4,909 5,390
5,884 6,272 Austin Chalk (Trend)/Eagle Ford Shale 2,595 2,835 2,946
3,197 North Louisiana 148 137 - - South Louisiana 627 435 641 598
Other 77 82 54 33 Total 8,356 8,879 9,525 10,100
Gas
(Mcf): Permian Basin 13,911 13,263 14,185 14,054 Austin Chalk
(Trend)/Eagle Ford Shale 2,531 1,810 2,033 2,022 North Louisiana
8,718 5,747 - 391 South Louisiana 7,513 4,930 6,359 5,848 Cotton
Valley Reef Complex 3,529 4,072 3,380 3,239 Other 776 1,024 1,043
946 Total 36,978 30,846 27,000 26,500
Natural Gas Liquids
(Bbls): Permian Basin 272 356 434 384 Austin Chalk
(Trend)/Eagle Ford Shale 271 185 228 228 Other 90 118 163 163 Total
633 659 825 775
Accounting for
Derivatives
The following summarizes information concerning our net
positions in open commodity derivatives applicable to periods
subsequent to June 30, 2010. The settlement prices of commodity
derivatives are based on NYMEX futures prices.
Swaps:
Oil Gas Bbls Price MMBtu
(a) Price Production Period:
3rd Quarter 2010
522,000 $ 76.40 1,750,000 $ 6.80
4th Quarter 2010
480,000 $ 76.24 1,680,000 $ 6.80
2011
1,656,000 $ 84.38 6,420,000 $ 7.07 2,658,000 9,850,000
_____________
(a) One MMBtu equals one Mcf at a
Btu factor of 1,000.
In March 2009, we terminated certain fixed-priced oil swaps
covering 157,000 barrels at a price of $57.35 from July 2010
through December 2010, resulting in an aggregate loss of
approximately $636,000, which will be paid to the counterparty
monthly as the applicable contracts are settled.
We did not designate any of the derivatives shown in the
preceding table as cash flow hedges; therefore, all changes in the
fair value of these contracts prior to maturity, plus any realized
gains or losses at maturity, will be recorded as other income
(expense) in our statement of operations.
Williams (CLAYTON) Energy, Inc. (NYSE:CWEI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Williams (CLAYTON) Energy, Inc. (NYSE:CWEI)
Historical Stock Chart
From Jul 2023 to Jul 2024