Clayton Williams Energy, Inc. Provides Operations Update
July 28 2011 - 7:55AM
Business Wire
Clayton Williams Energy, Inc. (the “Company”) (NASDAQ:CWEI)
today provided an operations update on its drilling activities, by
area:
Wolfbone Oil Play (Reeves County, Texas)
The Company is in the early stages of a major oil play in Reeves
County targeting the Bone Springs and Wolfcamp formations
(Wolfbone). The Company has leased 20,000 acres and will add
significantly more acreage through a drill to earn farm-out
agreement with Chesapeake Exploration. CWEI earns a 75% interest in
640 net acres for each well that it carries Chesapeake to the tanks
for a quarter interest.
The Company is making significant front-end investments in this
play: to acquire the acreage, the Chesapeake Carry, and to build
pipelines and other infrastructure. The amount and timing of these
investments will depend on drilling results.
Drilling and completion operations have begun on 13 wells. We
are currently running seven rigs in Reeves County and plan to
increase the rig count to 11 rigs in the near future.
“Early indications are encouraging,” stated Clayton W. Williams,
Jr., President and Chief Executive Officer of the Company, “but we
need more production data. We are accelerating drilling operations
to meet the Chesapeake agreement and to further evaluate our
acreage.”
Wolfberry Oil Play (Andrews County, Texas)
To date, the Company has drilled 154 Wolfberry wells in Andrews
County, 128 on 80-acre spacing and 26 on 40-acre spacing. The
Company has an inventory of approximately 80 80-acre locations and
180 40-acre locations for future development drilling. The Company
currently has three rigs running in Andrews County, but plans to
reduce the rig count to one rig in the near future.
During the second quarter of 2011, the Company produced
approximately 2,800 barrels of oil and natural gas liquids per day
and 1,250 Mcf of natural gas per day from this area, as compared to
1,600 barrels and 400 Mcf per day during the second quarter of
2010.
Deep Bossier Trend
The Company has begun drilling the Hamill Foundation #1, an
18,000-foot exploratory well in Leon County, Texas. This well
targets a Deep Bossier sand that is offsetting and updip to the
Company’s Big Bill Simpson #1. The well is expected to cost
approximately $10 million to drill to casing point.
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 natural gas and liquids
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 recession 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.
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