Clayton Williams Energy Provides Financial Guidance For 2004.Energy Editors/Business Editors 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)--Feb. 12, 2004 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 filed a Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. with the Securities and Exchange Commission to provide financial guidance disclosures for the year ending Dec. 31, 2004. This guidance was furnished fur·nish tr.v. fur·nished, fur·nish·ing, fur·nish·es 1. To equip with what is needed, especially to provide furniture for. 2. 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 accompany To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require beginning drivers or drivers under a certain age to be accompanied by a licensed adult driver whenever operating an automobile. this release or may be obtained electronically by accessing the Company's Web site at www.claytonwilliams.com. 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. Financial Guidance Disclosures Follow CLAYTON WILLIAMS ENERGY INC. FINANCIAL GUIDANCE DISCLOSURES FOR 2004 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 Dec. 31, 2004. 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 results of operations for this period have been finally 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 a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , 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 do not attempt to provide guidance on: (a) production which may be obtained through future exploratory drilling; (b) dry hole and 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). costs that may result from future exploratory drilling; (c) the effects of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. and 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. Activities"; (d) gains or losses from sales of property and equipment unless the sale has been consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. prior to the filing of financial guidance; and (e) capital expenditures related to completion activities on exploratory wells or acquisitions of proved properties until the expenditures are estimable es·ti·ma·ble adj. 1. Possible to estimate: estimable assets; an estimable distance. 2. Deserving of esteem; admirable: an estimable young professor. and likely to occur. As discussed in "Capital Expenditures," a significant portion of our 2004 planned exploration and development expenditures relate to exploratory prospects. Exploratory prospects involve a higher degree of risk than development prospects. To offset the higher risk, we generally strive to achieve a higher reserve potential and rate of return on investments in exploratory prospects. Actual results from our exploratory drilling activities, when ultimately reported, may have a material impact on the estimates of oil and gas production and exploration costs stated in this guidance. Summary of Estimates The following table sets forth certain estimates being used by us to model our anticipated results of operations for each quarter during the fiscal year ending Dec. 31, 2004. When a single value is provided, such value represents the mid-point of the approximate range Noun 1. approximate range - near to the scope or range of something; "his answer wasn't even in the right ballpark" ballpark ambit, range, scope, reach, compass, orbit - an area in which something acts or operates or has power or control: "the range of a of estimates. Otherwise, each range of values provided represents the expected low and high estimates for such financial or operating factor.
Year Ending Dec. 31, 2004
------------------------------------------
Estimated Estimated
First Second
Quarter Quarter
------------------------------------------
(Dollars in thousands, except per unit data)
Average Daily
Production:
Gas (Mcf) 40,000 to 46,000 38,000 to 44,000
Oil (Bbls) 3,700 to 3,900 3,475 to 3,675
Natural gas
liquids (Bbls) 550 to 650 525 to 625
Total gas
equivalents
(Mcfe) 65,500 to 73,300 62,000 to 69,800
Differentials:
Gas ($/Mcf) $(.20) to $(.40) $(.20) to $(.40)
Oil ($/Bbl) $(.75) to $(1.25) $(.75) to $(1.25)
Natural gas
liquids ($/Bbl) $(9.00) to $(13.00) $(9.00) to $(13.00)
Costs Variable by
Production ($/Mcfe):
Lease operating
expenses
(including
production
taxes) $1.00 to $1.20 $1.05 to $1.25
DD&A - Oil and gas
properties $1.15 to $1.45 $1.15 to $1.45
Other Revenues
(Expenses):
Natural gas
services:
Revenues $1,950 to $2,050 $1,950 to $2,050
Operating
costs $(1,850) to $(1,950) $(1,850) to $(1,950)
Exploration costs:
Abandonments
and
impairments $(1,000) to $(2,000) $(1,000) to $(2,000)
Seismic and
other $(1,600) to $(2,400) $(1,600) to $(2,400)
DD&A - Other $(425) to $(475) $(425) to $(475)
General and
administrative $(2,000) to $(2,200) $(2,300) to $(2,500)
Interest expense $(300) to $(350) $(350) to $(400)
Other income $25 to $50 $25 to $50
(expense)
Income Tax Rate:
Current 2% 2%
Deferred 33% 33%
Weighted Average
Shares Outstanding
(in thousands):
Basic 9,350 to 9,450 9,350 to 9,450
Diluted 9,450 to 9,650 9,450 to 9,650
Year Ending Dec. 31, 2004
------------------------------------------
Estimated Estimated
Third Fourth
Quarter Quarter
------------------------------------------
(Dollars in thousands, except per unit data)
Average Daily
Production:
Gas (Mcf) 35,500 to 41,500 32,500 to 38,500
Oil (Bbls) 3,700 to 3,900 3,700 to 3,900
Natural gas
liquids (Bbls) 600 to 700 600 to 700
Total gas
equivalents
(Mcfe) 61,300 to 69,100 58,300 to 66,100
Differentials:
Gas ($/Mcf) $(.20) to $(.40) $(.20) to $(.40)
Oil ($/Bbl) $(.75) to $(1.25) $(.75) to $(1.25)
Natural gas
liquids ($/Bbl) $(9.00) to $(13.00) $(9.00) to $(13.00)
Costs Variable by
Production ($/Mcfe):
Lease operating
expenses
(including
production
taxes) $1.05 to $1.25 $1.10 to $1.30
DD&A - Oil and gas
properties $1.15 to $1.45 $1.15 to $1.45
Other Revenues
(Expenses):
Natural gas
services:
Revenues $1,950 to $2,050 $1,950 to $2,050
Operating
costs $(1,850) to $(1,950) $(1,850) to $(1,950)
Exploration costs:
Abandonments
and
impairments $(1,000) to $(2,000) $(1,000) to $(2,000)
Seismic and
other $(1,600) to $(2,400) $(1,600) to $(2,400)
DD&A - Other $(425) to $(475) $(425) to $(475)
General and
administrative $(2,100) to $(2,300) $(2,500) to $(2,700)
Interest expense $(375) to $(425) $(350) to $(400)
Other income
(expense) $25 to $50 $25 to $50
Income Tax Rate:
Current 2% 2%
Deferred 33% 33%
Weighted Average
Shares Outstanding
(in thousands):
Basic 9,350 to 9,450 9,350 to 9,450
Diluted 9,450 to 9,650 9,450 to 9,650
Capital Expenditures The following table sets forth, by area, certain information about our planned exploration and development activities for 2004.
Total
Planned
Expenditures
Year Ended Percentage
Dec. 31, 2004 of Total
----------------- ----------------
(In thousands)
South Louisiana $ 51,900 69%
Cotton Valley Reef Complex 7,500 10%
Mississippi 7,200 10%
New Mexico 3,400 4%
Austin Chalk (Trend) 3,000 4%
Other 2,600 3%
---------------- ----------------
$ 75,600 100%
================ ================
More than 90% of the planned expenditures shown in the preceding table relate to exploratory prospects. Exploratory prospects involve a higher degree of risk than developmental prospects. To offset the higher risk, we generally strive to achieve a higher reserve potential and rate of return on investments in exploratory prospects. Actual expenditures during 2004 may be substantially higher or lower than these estimates as our plans for exploration and development activities change during the year. We do not attempt to forecast our success rate on exploratory drilling. Accordingly, these current estimates do not include any costs we may incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. to complete our successful exploratory wells and construct the required production facilities for these wells. Also, we are actively searching for other opportunities to increase our oil and gas reserves, including the evaluation of new prospects for exploratory and developmental drilling activities and potential acquisitions of proved oil and gas reserves. Other factors, such as prevailing product prices and the availability of capital resources, could also increase or decrease the ultimate level of expenditures during 2004. Recent Drilling Activities The following table summarizes certain information concerning our drilling activities from Jan. 1, 2003 through the date of this report. This information excludes insignificant drilling activities, such as wells drilled in non-core areas and small interests in non-operated properties.
Approximate
Spud Well Name County or Depth Current
Date (Prospect) Parish (feet) Status
-------------- --------------- ---------- ----------- ---------
Cotton Valley
Reef Complex
Jan 2003 Muse-Patranella Robertson, 17,000 Dry
Gas Unit #1 TX
South Louisiana
Mar 2003 State Lease 17521 St. Mary, 2,000 Dry
#1 (Clio) LA
Mar 2003 State Lease 17569 Plaquemines, 12,500 Dry
#1 (Auguste Bay) LA
Apr 2003 LL&E #1 - fka Plaquemines, 12,800 Producing
State Lease 3279 LA
#1 (Floretta)
May 2003 Romere Pass #113 Plaquemines, 2,250 Producing
LA
Aug 2003 Romere Pass #117 Plaquemines, 9,550 Producing
LA
Sep 2003 Romere Pass #115 Plaquemines, 11,600 Producing
LA
Oct 2003 State Lease 17378 Cameron, LA 18,000 Waiting
#1 (Fleur) on
comple-
tion
Oct 2003 State Lease 17639 Plaquemines, 8,500 Dry
#1 (Neva) LA
Oct 2003 State Lease 17620 Plaquemines, 10,500 Waiting
#1 (Pelican LA on
Point) pipeline
Oct 2003 State Lease 16656 Plaquemines, 12,300 Dry
#1 (Whiskey Bay) LA
Oct 2003 State Lease 17613 Jefferson, 13,200 Dry
#1 (Top) LA
Oct 2003 State Lease 17620 Plaquemines, 11,000 Dry
#2 (Pelican Point) LA
Dec 2003 State Lease 17642 Lafourche, 11,000 Dry
#1 (Brusile) LA
Dec 2003 State Lease 17707 St. Charles, 12,500 Dry
#1 (Jones Point) LA
Dec 2003 Allen Gautreaux Acadia, LA 13,200 In
#1 (King) progress
Feb 2004 Louisiana Fruit Plaquemines, 13,200 In
Co. #1 (Tiger LA progress
Pass)
Supplementary Information Oil and Gas Production The following table summarizes, by area, our estimated daily net production for each quarter during the year ending Dec. 31, 2004. These estimates represent the approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. mid-point of the estimated production range.
Daily Net Production for 2004
----------------------------------------
Estimated Estimated Estimated Estimated
First Second Third Fourth
Quarter Quarter Quarter Quarter
--------- --------- --------- ---------
Gas (Mcf):
Austin Chalk (Trend) 2,333 2,484 2,630 2,457
Cotton Valley Reef Complex 23,601 19,978 16,997 15,011
Louisiana 13,344 15,077 15,395 14,532
New Mexico/West Texas 1,833 1,725 1,837 1,946
Other 1,889 1,736 1,641 1,554
--------- --------- --------- ---------
43,000 41,000 38,500 35,500
========= ========= ========= =========
Oil (Bbls):
Austin Chalk (Trend) 2,244 2,114 2,139 2,122
Louisiana 756 703 825 790
New Mexico/West Texas 733 692 771 823
Other 67 66 65 65
--------- --------- --------- ---------
3,800 3,575 3,800 3,800
========= ========= ========= =========
Natural Gas Liquids (Bbls):
Austin Chalk (Trend) 328 311 367 341
New Mexico/West Texas 207 198 220 245
Louisiana 65 66 63 64
--------- --------- --------- ---------
600 575 650 650
========= ========= ========= =========
The estimates shown in the preceding table include production that we expect to achieve (i) upon the completion of pipeline facilities for the State Lease 17620 #1 (Pelican Point), (ii) through developmental drilling planned for 2004 on existing acreage 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). , and (iii) through a limited water frac program planned for 2004 on existing wells in the Austin Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum Chalk (Trend). The estimates do not include production, if any, that may be achieved through the completion operations on the State Lease 17378 #1 (Fleur). Accounting for 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. The following summarizes information concerning our net positions in open commodity derivatives applicable to periods subsequent to Dec. 31, 2003.
Oil Swaps
-------------------
Average
Bbls Price
--------- ---------
Production Period:
1st Quarter 2004 100,000 $ 31.53
2nd Quarter 2004 150,000 $ 31.53
3rd Quarter 2004 150,000 $ 31.53
4th Quarter 2004 150,000 $ 31.53
---------
550,000
=========
Gas Collars
------------------------------
MMBtu(a) Floor Ceiling
--------- --------- ---------
Production Period:
1st Quarter 2004 3,200,000 $ 4.50 $ 7.04
2nd Quarter 2004 2,500,000 $ 4.20 $ 5.28
3rd Quarter 2004 2,220,000 $ 4.20 $ 5.28
4th Quarter 2004 690,000 $ 4.20 $ 5.28
---------
8,610,000
=========
(a) One MMBtu equals one Mcf at a Btu factor of 1,000.
We did not 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. any of the derivatives shown in the preceding tables as cash flow hedges A cash flow hedge is a hedge of the exposure to the variability of cash flow that
SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 133; therefore, all changes in the fair value of these contracts prior to maturity, plus any realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. or losses at maturity, will be recorded as other income (expense). |
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