Clayton Williams Energy Announces 2004 Third Quarter Results.MIDLAND, Texas Midland is the county seat of Midland CountyGR6 located on the Southern Plains of the western area of the U.S. State of Texas. As of the 2006 U.S. Census estimate, the city had a total population of 102,073. -- Clayton Williams Clayton Wheat Williams, Jr. (b. 1931), a businessman from Midland, Texas, was the unsuccessful Republican gubernatorial nominee in 1990 against the Democratic State Treasurer Dorothy Ann Willis Richards even though he initially led in opinion polls by twenty points. Energy, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CWEI CWEI Combat Warfare Electronic Intelligence ) reported a net loss for the third quarter of 2004 of $9.2 million, or $.85 per share, as compared to net income of $7.6 million, or $.79 per share, for the third quarter of 2003. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was $32.5 million compared to $29.2 million during the same period in 2003. For the nine months ended September September: see month. 30, 2004, the Company reported a net loss of $1.5 million, or $.16 per share, compared to net income of $30.2 million, or $3.19 per share for the nine months ended September 30, 2003. Cash flow from operations during the first nine months of 2004 was $83.2 million compared to $98.8 million for the same period in 2003. The Company's operating results for the third quarter of 2004 were negatively impacted by a $24.6 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta loss related to the change in fair value of derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. , including a $17.3 million non-cash provision based on changes in mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. valuations from June June: see month. 30, 2004 to September 30, 2004. Since the Company does not presently designate des·ig·nate tr.v. des·ig·nat·ed, des·ig·nat·ing, des·ig·nates 1. To indicate or specify; point out. 2. To give a name or title to; characterize. 3. its derivatives as cash flow hedges A cash flow hedge is a hedge of the exposure to the variability of cash flow that
Oil and gas sales for the third quarter of 2004 increased 38% to $52.5 million as compared to $38 million in the 2003 quarter due primarily to higher product prices. Average realized oil prices in the third quarter of 2004 increased 52% from $27.53 to $41.71 per Bbl, while gas prices increased 21% from $4.41 to $5.32 per Mcf. The 2003 prices include realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. on hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. transactions totaling $3.1 million. Realized losses of $7.2 million on hedging transactions for the 2004 period are included in other income/expense since the hedges were not designated as cash flow hedges under applicable accounting standards. Oil production increased 61% to 624,000 barrels, or 6,783 barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. , from 388,000 barrels, or 4,217 barrels per day, primarily as a result of the acquisition of Southwest Southwest or south west is the ordinal direction halfway between south and west, the opposite of northeast. Southwest or south west may also refer to:
Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, most typically an intellectual property (IP) right. , Inc. in May 2004. Gas production, on the other hand, declined 22% to 4.5 Bcf, or 49,250 Mcf per day, from 5.8 Bcf, or 63,293 Mcf per day in 2003. Most of the decline in gas production stems from the Cotton Valley area and south Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , offset in part by additional production from the Southwest
Royalties acquisition. As previously reported, production from several
of the Company's wells in south Louisiana was suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. due to structural damage caused by Hurricane Ivan This article is about the Atlantic hurricane of 2004. For other storms of the same name, see Tropical Storm Ivan (disambiguation). Hurricane Ivan was the strongest hurricane of the 2004 Atlantic hurricane season. in mid-September n. 1. the middle part of September. Noun 1. mid-September - the middle part of September period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue . Higher exploration costs also contributed to the net loss for the third quarter of 2004. Exploration costs related to abandonments and impairments were $11.2 million during the 2004 quarter as compared to $4 million during the 2003 quarter. Included in the current period was $6.5 million related to the abandonment abandonment, in law, voluntary, intentional, and absolute relinquishment of rights or property without conveying them to any other person. Abandonment also means willfully leaving one's spouse or children, intending not to return (see desertion). of the Mervine Jankower #1 (Helen Helen, in Greek mythology, the most beautiful of women; daughter of Leda and Zeus, and sister of Castor and Pollux and Clytemnestra. While still a young girl Helen was abducted to Attica by Theseus and Polydeuces, but Castor and Pollux rescued her. Gayle Gayle is a variant of the female name Gail, or the surname of several famous people. It may also refer to a number of places. You may be looking for: Computers:
The Company will host a conference to discuss these results and other forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. items today at 2:00 pm CT (3:00 pm ET). To access the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the webcast, please go to the Company's website at www.claytonwilliams.com and click on "Live Webcast." Following the live webcast, the call will be archived for a period of 90 days on the Company's website. 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 those in the forward-looking statements, including, but not limited to, production variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality from expectations, volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the or 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.
CLAYTON WILLIAMS ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- ------------------
2004 2003 2004 2003
-------- ------- -------- --------
REVENUES
Oil and gas sales $ 52,517 $38,039 $129,968 $129,785
Natural gas services 2,074 2,202 6,973 6,504
Gain (loss) on sales of
property and equipment (68) (12) (2) 201
-------- ------- -------- --------
Total revenues 54,523 40,229 136,939 136,490
-------- ------- -------- --------
COSTS AND EXPENSES
Production 12,372 7,227 27,502 21,477
Exploration:
Abandonments and
impairments 11,197 3,953 29,296 17,347
Seismic and other 1,350 1,481 5,087 5,445
Natural gas services 1,882 2,075 6,529 6,064
Depreciation, depletion and
amortization 11,583 10,055 29,354 31,279
Impairment of property and
equipment - 170 - 170
Accretion of abandonment
obligations 413 171 853 477
General and administrative 2,493 2,039 8,080 6,969
-------- ------- -------- --------
Total costs and expenses 41,290 27,171 106,701 89,228
-------- ------- -------- --------
Operating income 13,233 13,058 30,238 47,262
-------- ------- -------- --------
OTHER INCOME (EXPENSE)
Interest expense (2,806) (697) (4,715) (2,550)
Change in fair value of
derivatives (24,580) 412 (27,982) 1,154
Other 764 (1,239) 727 (1,356)
-------- ------- -------- --------
Total other income
(expense) (26,622) (1,524) (31,970) (2,752)
-------- ------- -------- --------
Income (loss) before income
taxes (13,389) 11,534 (1,732) 44,510
Income tax expense (benefit) (4,201) 3,980 (226) 14,524
-------- ------- -------- --------
Income (loss) before
extraordinary items (9,188) 7,554 (1,506) 29,986
Cumulative effect of accounting
change, net of tax - - - 207
-------- ------- -------- --------
NET INCOME (LOSS) $ (9,188) $ 7,554 $ (1,506) $ 30,193
======== ======= ======== ========
Net income (loss) per common
share:
Basic:
Income (loss) before
extraordinary items $ (0.85) $ 0.81 $ (0.16) $ 3.22
======== ======= ======== ========
Net income (loss) $ (0.85) $ 0.81 $ (0.16) $ 3.24
======== ======= ======== ========
Diluted:
Income (loss) before
extraordinary items $ (0.85) $ 0.79 $ (0.16) $ 3.17
======== ======= ======== ========
Net income (loss) $ (0.85) $ 0.79 $ (0.16) $ 3.19
======== ======= ======== ========
Weighted average common shares
outstanding:
Basic 10,769 9,330 9,560 9,318
======== ======= ======== ========
Diluted 10,769 9,565 9,560 9,463
======== ======= ======== ========
Total comprehensive income
(loss) $ (9,188) $14,105 $ (1,506) $ 36,744
======== ======= ======== ========
CLAYTON WILLIAMS ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
ASSETS
September 30, December 31,
2004 2003
------------ ------------
CURRENT ASSETS
Cash and cash equivalents $ 15,359 $ 15,454
Accounts receivable:
Oil and gas sales, net 20,225 16,725
Joint interest and other, net 3,568 2,972
Affiliates 1,324 453
Inventory 6,822 787
Deferred income taxes 485 1,241
Prepaids and other 2,512 1,518
------------ ------------
50,295 39,150
------------ ------------
PROPERTY AND EQUIPMENT
Oil and gas properties, successful
efforts method 963,523 656,531
Natural gas gathering and processing
systems 17,374 16,829
Other 13,505 12,300
------------ ------------
994,402 685,660
Less accumulated depreciation, depletion
and amortization (531,226) (504,101)
------------ ------------
Property and equipment, net 463,176 181,559
------------ ------------
OTHER ASSETS 7,639 3,724
------------ ------------
$ 521,110 $ 224,433
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable:
Trade $ 36,155 $ 33,523
Oil and gas sales 10,740 10,086
Affiliates 1,938 1,254
Current maturities of long-term debt 5,196 2,453
Fair value of derivatives 23,935 2,233
Accrued liabilities and other 3,356 2,720
------------ ------------
81,320 52,269
------------ ------------
NON-CURRENT LIABILITIES
Long-term debt 217,696 53,295
Deferred income taxes 43,157 8,504
Fair value of derivatives 29,239 -
Other 19,799 9,584
------------ ------------
309,891 71,383
------------ ------------
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.10 per share - -
Common stock, par value $.10 per share 1,078 937
Additional paid-in capital 104,455 73,972
Retained earnings 24,366 25,872
------------ ------------
129,899 100,781
------------ ------------
$ 521,110 $ 224,433
============ ============
CLAYTON WILLIAMS ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- --------------------
2004 2003 2004 2003
-------- -------- --------- --------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss) $ (9,188) $ 7,554 $ (1,506) $ 30,193
Adjustments to reconcile
net income (loss) to cash
provided by operating
activities:
Depreciation, depletion
and amortization 11,583 10,055 29,354 31,279
Impairment of property
and equipment - 170 - 170
Exploration costs 11,197 3,953 29,296 17,347
(Gain) loss on sales
of property and
equipment 68 12 2 (201)
Deferred income taxes (4,201) 3,445 (226) 13,989
Non-cash employee
compensation 116 160 272 738
Change in fair value
of derivatives 20,575 (756) 22,273 (981)
Accretion of
abandonment
obligations 413 171 853 477
Cumulative effect of
accounting change,
net of tax - - - (207)
Changes in operating
working capital, net of
the effects of a business
acquisition in 2004:
Accounts receivable 1,176 3,668 6,243 (857)
Accounts payable 791 (4,354) 536 5,651
Other (31) 5,088 (3,938) 1,247
-------- -------- --------- --------
Net cash provided by
operating activities 32,499 29,166 83,159 98,845
-------- -------- --------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES
Additions to property
and equipment (27,494) (13,694) (93,593) (49,931)
Investment in SWR (363) - (168,204) -
Proceeds from sales of
property and equipment 4 (13) 441 236
Other 251 (95) 354 (407)
-------- -------- --------- --------
Net cash used in
investing activities (27,602) (13,802) (261,002) (50,102)
-------- -------- --------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from long-term
debt 5,138 - 191,800 -
Repayments of long-term
debt (10,258) (20,515) (35,258) (43,956)
Proceeds from sale of
common stock 5 139 30,008 243
Payment of debt issue
costs - - (4,156) -
Derivative settlements (3,385) - (4,646) -
-------- -------- --------- --------
Net cash provided by
(used in) financing
activities (8,500) (20,376) 177,748 (43,713)
-------- -------- --------- --------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (3,603) (5,012) (95) 5,030
CASH AND CASH EQUIVALENTS
Beginning of period 18,962 15,718 15,454 5,676
-------- -------- --------- --------
End of period $ 15,359 $ 10,706 $ 15,359 $ 10,706
======== ======== ========= ========
CLAYTON WILLIAMS ENERGY, INC.
SUMMARY PRODUCTION AND PRICE DATA
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
------- ------- ------- -------
Average Daily Production:
Natural Gas (Mcf):
Austin Chalk (Trend) 3,021 3,294 3,266 3,726
Cotton Valley Reef
Complex 21,579 38,152 24,321 46,081
Louisiana 8,745 17,516 9,790 18,415
New Mexico / West Texas 1,504 1,877 1,760 1,778
SWR 13,152 - 6,245 -
Other 1,249 2,454 1,381 2,326
------- ------- ------- -------
Total 49,250 63,293 46,763 72,326
======= ======= ======= =======
Oil (Bbls):
Austin Chalk (Trend) 2,104 2,825 2,244 2,821
Louisiana 1,295 541 911 598
New Mexico / West Texas 673 726 829 720
SWR 2,656 - 1,301 -
Other 55 125 58 84
------- ------- ------- -------
Total 6,783 4,217 5,343 4,223
======= ======= ======= =======
Natural gas liquids (Bbls):
Austin Chalk (Trend) 301 437 270 283
New Mexico / West Texas 321 247 197 183
Other 215 207 194 168
------- ------- ------- -------
Total 837 891 661 634
======= ======= ======= =======
Total Production:
Natural Gas (MMcf) 4,531 5,823 12,813 19,745
Oil (MBbls) 624 388 1,464 1,153
Natural gas liquids (MBbls) 77 82 181 173
------- ------- ------- -------
Gas Equivalents (MMcfe) 8,737 8,643 22,683 27,701
Average Realized Prices:
Gas ($/Mcf):
Before hedging $ 5.32 $ 4.84 $ 5.39 $ 5.52
Hedging gain (loss) - (a) (0.43) - (a) (0.76)
------- ------- ------- -------
Combined $ 5.32 $ 4.41 $ 5.39 $ 4.76
======= ======= ======= =======
Oil ($/Bbl):
Before hedging $ 41.71 $ 28.95 $ 38.25 $ 29.93
Hedging gain (loss) - (a) (1.42) - (a) (2.45)
------- ------- ------- -------
Combined $ 41.71 $ 27.53 $ 38.25 $ 27.48
======= ======= ======= =======
Natural gas liquids
($/Bbl) $ 28.79 $ 19.96 $ 25.93 $ 21.05
======= ======= ======= =======
CLAYTON WILLIAMS ENERGY, INC.
Notes to tables and supplemental information
(a) The Company did not designate any of its 2004 derivatives as cash
flow hedges under Statement of Financial Accounting Standards No.
133, as amended. All changes in the fair value of these contracts
prior to maturity, plus any realized gains or losses at maturity,
are recorded as other income (expense) in the Company's statements
of operations and are excluded from the computation of average
realized prices from oil and gas sales. Actual losses on settled
contracts totaled $7.2 million in the third quarter of 2004.
Certain reclassifications in 2003 have been made to conform to
current period presentations.
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