Clayton Williams Energy Provides Financial Guidance for 2004.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 ) 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 December December: see month. 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 website at www.claytonwilliams.com. 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. 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 December 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 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 of oil and gas prices, the unpredictable nature of our exploratory drilling results; 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; 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; 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 December 31, 2004. When a single value is
provided, such value represents the mid-point of the approximate range
of estimates. Otherwise, each range of values provided represents the
expected low and high estimates for such financial or operating
factor.
Year Ending December 31, 2004
--------------------------------------------
Actual Actual
First Quarter Second Quarter
------------------- ----------------------
(Dollars in thousands, except per unit data)
Average Daily Production:
Gas (Mcf) 45,901 45,110
Oil (Bbls) 4,121 5,110
Natural gas liquids
(Bbls) 758 385
Total gas equivalents
(Mcfe) 75,175 78,080
Differentials:
Gas ($/Mcf) $(.52) $(.29)
Oil ($/Bbl) (a) $(1.11) $(1.28)
Natural gas liquids
($/Bbl) $(10.58) $(15.98)
Costs Variable by
Production ($/Mcfe):
Production expenses
(including
production taxes) $1.02 $1.15
DD&A - Oil and gas
properties $1.14 $1.19
Other Revenues
(Expenses):
Natural gas services:
Revenues $2,527 $2,372
Operating costs $(2,352) $(2,295)
Exploration costs:
Abandonments and
impairments $(4,632) $(13,467)
Seismic and other $(1,925) $(1,812)
DD&A - Other $(733) $(770)
General and
administrative $(3,301) $(2,286)
Interest expense $(460) $(1,449)
Other income (expense) $(124) $87
Income Tax Rate:
Current and deferred 34% 34%
Weighted Average Shares
Outstanding (in
thousands):
Basic 9,371 9,923
Diluted 9,720 10,230
Year Ending December 31, 2004
--------------------------------------------
Actual Estimated
Third Quarter Fourth Quarter
---------------------- --------------------
(Dollars in thousands, except per unit data)
Average Daily Production:
Gas (Mcf) 49,250 46,000 to 52,000
Oil (Bbls) 6,783 6,650 to 6,850
Natural gas liquids
(Bbls) 837 700 to 800
Total gas equivalents
(Mcfe) 94,970 90,100 to 97,900
Differentials:
Gas ($/Mcf) $(.52) $(.40) to $(.70)
Oil ($/Bbl) (a) $(2.17) $(1.90) to $(2.60)
Natural gas liquids
($/Bbl) $(15.09) $(13.00) to $(17.00)
Costs Variable by
Production ($/Mcfe):
Production expenses
(including
production taxes) $1.42 $1.40 to $1.60
DD&A - Oil and gas
properties $1.24 $1.15 to $1.45
Other Revenues (Expenses):
Natural gas services:
Revenues $2,074 $2,000 to $2,200
Operating costs $(1,882) $(1,900) to $(2,100)
Exploration costs:
Abandonments and
impairments $(11,197) $(1,000) to $(2,000)
Seismic and other $(1,350) $(1,600) to $(2,400)
DD&A - Other $(765) $(800) to $(850)
General and
administrative $(2,493) $(3,100) to $(3,300)
Interest expense $(2,806) $(2,800) to $(3,000)
Other income (expense) $764 $25 to $50
Income Tax Rate:
Current and deferred 37% 35%
Weighted Average Shares
Outstanding (in
thousands):
Basic 10,769 10,800 to 10,900
Diluted 10,769 11,100 to 11,300
(a) We expect the increase in oil differentials for the third quarter
2004 to continue into the fourth quarter due to more of our oil
production being sold based on posted prices as compared to
NYMEX-based pricing.
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
December 31, 2004 of Total
------------------ ---------------
(In thousands)
South Louisiana $ 63,200 57%
Mississippi 19,400 17%
New Mexico/West Texas 10,100 9%
Cotton Valley Reef Complex 4,900 4%
SWR - New Mexico/West Texas 9,800 9%
Other 4,300 4%
----------------- ---------------
$ 111,700 100%
================= ===============
Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 80% 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 since our plans for exploration and development activities may 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 properties. 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.
Supplementary Information
Oil and Gas Production
----------------------
The following table summarizes, by area, our actual and estimated
daily net production for each quarter during the year ending December
31, 2004. These estimates represent the approximate mid-point of the
estimated production range.
Daily Net Production for 2004
--------------------------------------------
Actual Actual Actual Estimated
First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- ---------- ----------- ------------
Gas (Mcf):
Austin Chalk (Trend) 3,669 3,110 3,021 3,304
Cotton Valley Reef
Complex 28,119 23,295 21,579 18,152
Louisiana 10,739 9,898 8,745 13,197
New Mexico/West Texas 1,866 2,000 1,504 1,804
SWR (a) - 5,505 13,152 11,554
Other 1,508 1,302 1,249 989
-------- ---------- ----------- ------------
45,901 45,110 49,250 49,000
======== ========== =========== ============
Oil (Bbls):
Austin Chalk (Trend) 2,393 2,242 2,104 1,983
Louisiana 738 693 1,295 1,235
New Mexico/West Texas 940 878 673 672
SWR (a) - 1,231 2,656 2,795
Other 50 66 55 65
-------- ---------- ----------- ------------
4,121 5,110 6,783 6,750
======== ========== =========== ============
Natural Gas Liquids
(Bbls):
Austin Chalk (Trend) 371 136 301 321
New Mexico/West Texas 186 83 321 268
Louisiana 201 166 215 161
-------- ---------- ----------- ------------
758 385 837 750
======== ========== =========== ============
(a) We acquired Southwest Royalties, Inc. ("SWR") on May 21, 2004.
Average daily production for SWR during the second quarter
amounted to 12,525 Mcf of gas and 2,800 Bbls of oil based on the
40-day period.
The estimates shown in the preceding table include production from the State Lease 17620 #1 (Pelican Point) and the Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. Fruit Company
#1 and #2 (Tiger Pass) wells which were recently placed into production.
They also include estimated production from the State Lease 17378 #1 and
the State Lease 17378 #2 (Fleur) wells which are expected to add
production for a portion of this quarter.
Accounting for Derivatives
--------------------------
The following summarizes information concerning our net positions in
open commodity derivatives applicable to periods subsequent to
September 30, 2004.
Swaps:
Gas Oil
------------------- ------------------
MMBtu (a) Price Bbls Price
---------- ------ -------- -------
Production Period:
4th Quarter 2004 620,000 $7.87 150,000 $31.53
1st Quarter 2005 1,800,000 $8.28 -
---------- --------
2,420,000 150,000
========== ========
Floors:
Gas Oil
------------------- ------------------
MMBtu (a) Floor Bbls Floor
---------- ------ -------- -------
Production Period:
1st Quarter 2005 1,800,000 $4.50 117,000 $28.00
2nd Quarter 2005 1,820,000 $4.50 118,300 $28.00
3rd Quarter 2005 1,840,000 $4.50 119,600 $28.00
4th Quarter 2005 1,840,000 $4.50 119,600 $28.00
---------- --------
7,300,000 474,500
========== ========
Collars:
Gas Oil
------------------------- --------------------------
MMBtu (a) Floor Ceiling Bbls Floor Ceiling
---------- ------ ------- ---------- ------- -------
Production
Period:
4th Quarter
2004 690,000 $4.20 $5.28 175,000 $23.00 $25.46
4th Quarter
2004 685,000 $4.00 $5.24
1st Quarter
2005 649,000 $4.00 $5.23 170,000 $23.00 $25.41
2nd Quarter
2005 630,000 $4.00 $5.23 168,000 $23.00 $25.41
3rd Quarter
2005 607,000 $4.00 $5.23 165,000 $23.00 $25.41
4th Quarter
2005 588,000 $4.00 $5.23 162,000 $23.00 $25.41
2006 2,024,000 $4.00 $5.21 613,000 $23.00 $25.32
2007 1,831,000 $4.00 $5.18 562,000 $23.00 $25.20
2008 1,279,000 $4.00 $5.15 392,000 $23.00 $25.07
---------- ----------
8,983,000 2,407,000
========== ==========
(a) One MMBtu equals one Mcf at a Btu factor of 1,000.
The following summarizes information concerning the Company's
positions in interest rate derivatives applicable to periods
subsequent to September 30, 2004.
Principal Libor
Balance Rates
------------ -----
Period:
October 1, 2004 to November 1, 2004 $65,000,000 1.68%
November 1, 2004 to November 1, 2005 $60,000,000 2.97%
November 1, 2005 to November 1, 2006 $55,000,000 4.29%
November 1, 2006 to November 1, 2007 $50,000,000 5.19%
November 1, 2007 to November 1, 2008 $45,000,000 5.73%
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 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. 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). |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion