Clayton Williams Energy Announces Second Quarter Results.Business Editors & Energy Writers MIDLAND Midland, town, Canada Midland, town (1991 pop. 13,865), S Ont., Canada, on Georgian Bay, NW of Toronto. Midland is a port and has grain elevators and plants that manufacture textiles, cameras, optical goods, and other products. , Texas--(BUSINESS WIRE)--Aug. 8, 2002 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:CWEI CWEI Combat Warfare Electronic Intelligence ) today reported net income for the quarter ended June June: see month. 30, 2002 of $1.3 million, or $.14 per share, as compared to a net loss of $8.2 million, or $.89 per share for the second quarter of 2001. Earnings before interest, income taxes, exploration costs, non-cash charges 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. and other income/expense (EBITDAX Earnings Before Interest, Taxes, Depreciation, Depletion, Amortization, and Exploration Expenses - EBITDAX An indicator of a company's financial performance calculated as: ) for the current quarter totaled $12.9 million, or $1.37 per share, as compared to $24.3 million, or $2.62 per share, for the comparable quarter in 2001. For the six months ended June 30, 2002, the Company reported a net loss of $1.7 million, or $.18 per share, as compared to a net loss of $6 million, or $.64 per share, for the six months ended June 30, 2001. EBITDAX for the six-month period in 2002 totaled $24.9 million, or $2.70 per share, as compared to $51.5 million, or $5.56 per share, for the comparable period in 2001. Net income/loss for the periods reported include income from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $81,000 and $136,000 for the quarters ended June 30, 2002 and 2001, respectively, and $139,000 and $303,000 for the six-month periods in 2002 and 2001, respectively. The discontinued operations relate to the sale of certain producing properties in Wharton County, Texas Wharton County is a county located in the U.S. state of Texas. In 2000, its population was 41,188. Its county seat is Wharton6. Geography According to the U.S. Census Bureau, the county has a total area of 2,835 km² (1,094 mi²). , that were classified as held for sale at June 30, 2002. Lower oil and gas prices accounted for most of the decline in EBITDAX for the current quarter. Oil and gas sales for the second quarter of 2002 totaled $18.8 million, as compared to $30.2 million in 2001. Realized gas prices declined 42% from $4.58 per Mcf to $2.64 per Mcf, while oil prices declined 16% from $26.61 per Bbl to $22.38 per Bbl. The 2002 prices include realized net losses 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 $2.7 million, or $.52 per Mcf and $2.37 per Bbl, and the 2001 prices include net gains on hedging transactions totaling $166,000, or a gain of $.10 per Mcf and a loss of $.22 per Bbl. Despite lower product prices, net earnings were higher in the 2002 quarter as compared to 2001 due to higher expenses in the 2001 quarter related primarily to abandonments and impairments of proved and unproved properties. Gas production for the second quarter of 2002 increased 16% to 3.4 Bcf, or 37,099 Mcf per day, from 2.9 Bcf, or 31,846 Mcf per day, in 2001. Oil and NGL NGL - A dialect of IGL. production for the 2002 quarter declined 31% to 457,000 Bbls, or 5,022 Bbls per day, from 661,000 Bbls, or 7,263 Bbls per day, in 2001. Clayton Williams Energy Inc. is an independent energy company located in 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. . Certain statements contained herein constitute "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 the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 (the "Reform Act"). Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. Such factors include, among others, the following: the 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 of oil and gas prices, the Company's drilling results, the Company's ability to replace short-lived reserves, the availability of capital resources, the reliance upon estimates of 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. , operating hazards
Hazards is an independent, union-friendly magazine based in Sheffield, England, which has won major international awards. and uninsured risks, competition, government regulation, the ability of the Company to implement its business strategy, and other factors referenced in the Company's public filings with the Securities and Exchange Commission.
CLAYTON WILLIAMS ENERGY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2002 2001 2002 2001
-------- -------- -------- --------
REVENUES
Oil and gas sales $ 18,797 $ 30,202 $ 37,415 $ 62,952
Natural gas services 1,418 2,678 2,617 5,529
-------- -------- -------- --------
Total revenues 20,215 32,880 40,032 68,481
-------- -------- -------- --------
COSTS AND EXPENSES
Lease operations 4,850 5,164 10,020 10,106
Exploration:
Abandonments and
impairments 2,514 13,006 8,743 19,341
Seismic and other 1,902 1,919 3,610 10,427
Natural gas services 1,181 1,841 2,175 4,497
Depreciation, depletion
and amortization 6,747 11,020 13,826 19,186
Impairment of property
and equipment -- 10,353 -- 10,353
General and administrative 1,948 1,948 3,823 2,908
-------- -------- -------- --------
Total costs and expenses 19,142 45,251 42,197 76,818
-------- -------- -------- --------
Operating income (loss) 1,073 (12,371) (2,165) (8,337)
-------- -------- -------- --------
OTHER INCOME (EXPENSE)
Interest expense (891) (685) (1,852) (1,239)
Gain on sales of property
and equipment 60 4 69 17
Change in fair value
of derivatives 52 (30) (660) (220)
Other 1,584 89 1,705 142
-------- -------- -------- --------
Total other income (expense) 805 (622) (738) (1,300)
-------- -------- -------- --------
Income (loss) before
income taxes 1,878 (12,993) (2,903) (9,637)
Income tax expense (benefit) 611 (4,623) (1,098) (3,522)
-------- -------- -------- --------
Income (loss) from
continuing operations 1,267 (8,370) (1,805) (6,115)
Cumulative effect of
accounting change,
net of tax -- -- -- (164)
Income from discontinued
operations, net of tax 81 136 139 303
-------- -------- -------- --------
NET INCOME (LOSS) $ 1,348 $ (8,234) $ (1,666) $ (5,976)
======== ======== ======== ========
Net income (loss)
per common share:
Basic:
Income (loss) from
continuing operations $ 0.14 $ (0.90) $ (0.20) $ (0.66)
======== ======== ======== ========
Net income (loss) $ 0.15 $ (0.89) $ (0.18) $ (0.64)
======== ======== ======== ========
Diluted:
Income (loss) from
continuing operations $ 0.14 $ (0.90) $ (0.20) $ (0.66)
======== ======== ======== ========
Net income (loss) $ 0.14 $ (0.89) $ (0.18) $ (0.64)
======== ======== ======== ========
Weighted average common
shares outstanding:
Basic 9,236 9,273 9,219 9,267
======== ======== ======== ========
Diluted 9,375 9,273 9,219 9,267
======== ======== ======== ========
Total comprehensive
income (loss) $ 1,728 $ (7,876) $ (8,366) $ (5,610)
======== ======== ======== ========
CLAYTON WILLIAMS ENERGY INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
ASSETS
June 30, December 31,
2002 2001
--------- ---------
CURRENT ASSETS
Cash and cash equivalents $ 8,934 $ 2,856
Accounts receivable:
Oil and gas sales, net 8,996 7,489
Joint interest and other, net 2,222 2,103
Affiliates 264 210
Inventory 3,602 2,663
Deferred income taxes 412 438
Fair value of derivatives -- 4,426
Prepaids and other 2,420 1,035
--------- ---------
26,850 21,220
--------- ---------
PROPERTY AND EQUIPMENT
Oil and gas properties,
successful efforts method 577,923 576,784
Natural gas gathering
and processing systems 14,915 14,513
Other 11,588 11,370
--------- ---------
604,426 602,667
Less accumulated depreciation,
depletion and amortization (450,672) (443,307)
--------- ---------
Property and equipment, net 153,754 159,360
--------- ---------
OTHER ASSETS
Deferred income taxes 5,058 401
Fair value of derivatives 0 505
Investments and other 1,862 1,793
--------- ---------
6,920 2,699
--------- ---------
$ 187,524 $ 183,279
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable:
Trade $ 13,681 $ 28,742
Oil and gas sales 7,447 7,890
Affiliates 1,207 374
Fair value of derivatives 6,439 659
Accrued liabilities and other 861 1,334
--------- ---------
29,635 38,999
--------- ---------
LONG-TERM DEBT 84,000 62,000
--------- ---------
STOCKHOLDERS' EQUITY:
Preferred stock,
par value $.10 per share -- --
Common stock,
par value $.10 per share 925 925
Additional paid-in capital 72,500 72,525
Retained earnings 5,353 7,019
Accumulated other
comprehensive income (loss) (4,889) 1,811
--------- ---------
73,889 82,280
--------- ---------
$ 187,524 $ 183,279
========= =========
CLAYTON WILLIAMS ENERGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2002 2001 2002 2001
-------- -------- -------- --------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss) $ 1,348 $ (8,234) $ (1,666) $ (5,976)
Adjustments to reconcile
net income (loss) to cash
provided by operating
activities:
Depreciation, depletion
and amortization 6,747 11,020 13,826 19,186
Impairment of proved
properties -- 10,353 -- 10,353
Exploration costs 2,514 13,006 8,743 19,341
Gain on sales of property
and equipment (60) (4) (69) (17)
Deferred income taxes 611 (4,623) (1,098) (3,522)
Non-cash employee
compensation (44) (62) (69) (261)
Change in fair value
of derivatives 5 30 403 220
Non-cash effect of
discontinued operations,
net of tax 87 141 167 278
Cumulative effect of
accounting change,
net of tax -- -- -- 164
Other 514 118 623 229
-------- -------- -------- --------
11,722 21,745 20,860 39,995
Changes in operating
working capital:
Accounts receivable (629) 1,331 (1,680) 705
Accounts payable 2,002 2,952 (3,126) 7,767
Other (1,264) (1,675) (1,417) (37)
-------- -------- -------- --------
Net cash provided by
operating activities 11,831 24,353 14,637 48,430
-------- -------- -------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES
Additions to property
and equipment (14,338) (33,542) (33,967) (68,545)
Proceeds from sales of
property and equipment 4,116 5 4,125 34
Other (22) (1,637) (69) (1,816)
-------- -------- -------- --------
Net cash used in
investing activities (10,244) (35,174) (29,911) (70,327)
-------- -------- -------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from
long-term debt 3,900 11,600 22,000 21,700
Proceeds from sale
of common stock -- 62 -- 95
Repurchase and cancellation
of common stock (135) -- (648) --
-------- -------- -------- --------
Net cash provided by
financing activities 3,765 11,662 21,352 21,795
-------- -------- -------- --------
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS 5,352 841 6,078 (102)
CASH AND CASH EQUIVALENTS
Beginning of period 3,582 1,441 2,856 2,384
-------- -------- -------- --------
End of period $ 8,934 $ 2,282 $ 8,934 $ 2,282
======== ======== ======== ========
Clayton Williams Energy Inc.
Summary Production and Price Data
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2002 2001 2002 2001
-------- -------- -------- --------
Average Daily Production:
Natural Gas (Mcf):
Austin Chalk (Trend) 3,820 4,651 3,912 4,608
Cotton Valley Reef Complex 23,029 21,515 22,488 17,700
Louisiana 4,545 975 3,283 885
New Mexico/West Texas 2,029 1,859 1,831 1,855
Other 3,676 2,846 3,773 2,963
-------- -------- -------- --------
Total 37,099 31,846 35,287 28,011
======== ======== ======== ========
Oil (Bbls):
Austin Chalk (Trend) 3,435 5,381 3,605 5,222
Louisiana 87 70 85 96
New Mexico/West Texas 756 1,057 788 946
Other 52 41 41 40
-------- -------- -------- --------
Total 4,330 6,549 4,519 6,304
======== ======== ======== ========
Natural gas liquids (Bbls):
Austin Chalk (Trend) 532 565 472 492
New Mexico/West Texas 151 122 144 123
Other 9 27 8 31
-------- -------- -------- --------
Total 692 714 624 646
======== ======== ======== ========
Total Production:
Natural Gas (MMcf) 3,376 2,898 6,387 5,070
Oil (MBbls) 394 596 818 1,141
Natural gas liquids (MBbls) 63 65 113 117
-------- -------- -------- --------
Gas Equivalents (MMcfe) 6,118 6,864 11,973 12,618
Average Realized Prices:
Gas ($/Mcf):
Before hedging $ 3.16 $ 4.48 $ 2.72 $ 5.41
Hedging gain (loss) (0.52) 0.10 0.12 0.36
-------- -------- -------- --------
Combined $ 2.64 $ 4.58 $ 2.84 $ 5.77
======== ======== ======== ========
Oil ($/Bbl):
Before hedging $ 24.75 $ 26.83 $ 22.39 $ 27.44
Hedging gain (loss) (2.37) (0.22) (1.03) 0.04
-------- -------- -------- --------
Combined $ 22.38 $ 26.61 $ 21.36 $ 27.48
======== ======== ======== ========
Natural gas liquids ($/Bbl) $ 13.68 $ 19.11 $ 12.45 $ 20.77
======== ======== ======== ========
Clayton Williams Energy Inc.
Supplemental Information
(Unaudited)
(In thousands, except per share)
Discretionary cash flow and EBITDAX (as defined in the
accompanying notes) are presented herein because of their wide
acceptance as financial indicators of a company's ability to
internally fund exploration and development activities and to service
or incur debt. These financial measures should not be considered in
isolation, or as a substitute for net income, cash flow provided by
operating activities or other income or cash flow data prepared in
accordance with generally accepted accounting principles, or as a sole
measure of a company's profitability or liquidity.
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2002 2001 2002 2001
-------- -------- -------- --------
EBITDAX:
Net income (loss) $ 1,348 $ (8,234) $ (1,666) $ (5,976)
Interest expense 891 685 1,852 1,239
Income tax
expense (benefit) 611 (4,623) (1,098) (3,522)
Exploration costs:
Abandonments
and impairments 2,514 13,006 8,743 19,341
Seismic and other 1,902 1,919 3,610 10,427
Depreciation, depletion
and amortization 6,747 11,020 13,826 19,186
Impairment of property
and equipment -- 10,353 -- 10,353
Non-cash employee
compensation (44) (62) (69) (261)
Change in fair value
of derivatives (52) 30 660 220
Non-cash effect of
discontinued operations,
net of tax 87 141 167 278
Cumulative effect of
accounting change,
net of tax -- -- -- 164
Other non-cash expenses 514 118 623 229
Loss (gain) on sales
of property and equipment (60) (4) (69) (17)
Other expense (income) (1,584) (89) (1,705) (142)
-------- -------- -------- --------
$ 12,874 $ 24,260 $ 24,874 $ 51,519
======== ======== ======== ========
Per common share -- diluted $ 1.37 $ 2.62 $ 2.70 $ 5.56
======== ======== ======== ========
Discretionary Cash Flow:
Net cash provided
by operating activities
(before changes in
working capital) $ 11,722 $ 21,745 $ 20,860 $ 39,995
Seismic and other 1,902 1,919 3,610 10,427
-------- -------- -------- --------
$ 13,624 $ 23,664 $ 24,470 $ 50,422
======== ======== ======== ========
Per common share -- diluted $ 1.45 $ 2.55 $ 2.65 $ 5.44
======== ======== ======== ========
Weighted average common
shares outstanding
-- diluted 9,375 9,273 9,219 9,267
======== ======== ======== ========
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