Clayton Williams Energy Announces 2006 Financial Results and Reserves.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 fourth quarter of 2006 of $8.9 million, or $.81 per share, as compared to net income of $1.3 million, or $.12 per share, for the fourth quarter of 2005. 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 for the fourth quarter of 2006 was $29.5 million, as compared to $36.8 million during the same period in 2005. For the year ended December 31, 2006, the Company reported net income of $17.8 million, or $1.58 per share, as compared to net income of $257,000, or $.02 per share, for 2005. Cash flow from operations for the year 2006 was $146 million, as compared to $163.5 million for 2005. Oil and gas sales for the fourth quarter of 2006 totaled $57.8 million compared to $62.1 million for the same quarter in 2005. Of the $4.2 million decrease in oil and gas sales, product prices accounted for a decrease of $14.1 million and higher production volumes accounted for a $9.9 million increase. Oil production for the fourth quarter of 2006 increased to 529,000 barrels, or 5,750 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. , up from 487,000 barrels, or 5,293 barrels per day in the 2005 quarter. Gas production increased 24% to 4 Bcf, or 43,272 Mcf per day, from 3.2 Bcf, or 34,815 Mcf per day in the 2005 quarter. Average realized oil prices in the fourth quarter of 2006 remained relatively flat at $57.41 compared to $56.99 per barrel in the 2005 period, while gas prices decreased 35% from $10.02 to $6.49 per Mcf. Average realized prices for 2006 and 2005 exclude the effects of any gains or losses realized on commodity hedging transactions since those derivatives were not designated as cash flow hedges A cash flow hedge is a hedge of the exposure to the variability of cash flow that
For the fourth quarter of 2006, the Company reported an $11.9 million net gain on derivatives, consisting of a $14.9 million non-cash gain to mark the Company's derivative positions to their fair value on December 31, 2006 and a $3 million charge for cash settlements during the quarter. For the same period in 2005, the Company reported a $3.6 million net loss on derivatives, consisting of a $15.6 million non-cash mark-to-market loss and a $12 million charge for cash settlements. Exploration costs related to abandonments and impairments were $29.4 million during the fourth quarter of 2006, which included $5.7 million for the abandonment of the Roberson et al #1 (Terryville) in North Louisiana North Louisiana, also known as Sportsman's Paradise, is a region in the U.S. state of Louisiana. The region has two metropolitan areas: Monroe and Shreveport-Bossier City. , $4.1 million for acreage impairments in Montana, $1.8 million for the abandonment of the Rose Chouest #1 (South Empire) in South Louisiana, and $17.1 million for previously announced dry holes in Louisiana and Colorado. The Company's exploration costs were $8.4 million in the fourth quarter of 2005. The Company recorded a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. during the fourth quarter of 2006 of $8.9 million for an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of proved properties pursuant to Statement of Financial Accounting Standards No. 144 "Accounting for Impairment or Disposal of Long-Lived Assets." The impairment, which applied to one area in West Texas and one area in New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). , was required to reduce the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of these proved properties to their estimated fair market value. The Company also announced today that its total proved oil and gas reserves as of December 31, 2006 were 271.5 Bcfe, consisting of 25.4 million barrels of oil and NGL NGL - A dialect of IGL. and 119.2 Bcf of natural gas. By comparison, the Company reported proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. of 293.8 Bcfe as of December 31, 2005, consisting of 27.8 million barrels of oil and NGL and 126.8 Bcf of natural gas. The pre-tax present value of estimated future net revenues from these reserves, discounted at 10% and computed in accordance with SEC guidelines, totaled $712.4 million at December 31, 2006, as compared to $1.1 billion at December 31, 2005. The estimates were based on weighted average oil and NGL prices of $57.18 per Bbl in 2006, as compared to $57.85 in 2005, and gas prices of $5.24 per Mcf in 2006, as compared to $10.65 per Mcf in 2005. During 2006, the Company replaced 100% of the 29.4 Bcfe produced in 2006 through extensions and discoveries, excluding purchases and downward revisions to previous estimates. The following table summarizes the changes in proved reserves during 2006 on a Bcfe basis and as a percentage of 2006 production. [TABLE OMITTED] Net downward revisions of 28.7 Bcfe consisted of approximately 22 Bcfe of downward revisions attributable to the effects of lower natural gas prices on the estimated quantities of proved reserves and approximately 6.7 Bcfe of downward revisions attributable to well performance primarily from properties in the Permian Basin The Permian Basin is a sedimentary basin largely contained in the western part of the U.S. state of Texas. It reaches from just south of Lubbock, Texas, to just south of Midland & Odessa, extending westward into the southeastern part of the adjacent state of New Mexico. . The Company will host a conference call to discuss these results and other forward-looking items today, March 15th at 1:30 p.m. CT (2:30 p.m. ET). The dial-in conference number is: 800-901-5213, passcode 59083952. The replay will be available for one week at 888-286-8010, passcode 41942892. To access the conference call via Internet webcast, please go to the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of 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 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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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