Clayton Williams Energy, Inc. (the “Company”) (NYSE:CWEI) today
reported its financial results for the third quarter of 2016.
Summary
- Oil and Gas Production of 14
MBOE/d
- Cash Flow from Operations of $24.1
million; EBITDAX2 (non-GAAP) of $18.4
million
- Liquidity of $321.1 million,
including cash and short-term investments
- Sold Glasscock County, Texas assets
for $19.4 million
- Announced sale of Giddings Area
assets for $400 million
- Recent Actions to Improve Balance
Sheet
Financial Results for the Third Quarter of 2016
The Company reported a net loss for the third quarter of 2016
(“3Q16”) of $148.8 million, or $10.62 per share, as compared to a
net loss of $9.4 million, or $0.77 per share, for the third quarter
of 2015 (“3Q15”). Adjusted net loss1 (non-GAAP) for 3Q16 was $35.1
million, or $2.50 per share, as compared to adjusted net loss1
(non-GAAP) of $14.9 million, or $1.23 per share, for 3Q15. Cash
flow from operations for 3Q16 was $24.1 million as compared to
$26.4 million for 3Q15. EBITDAX2 (non-GAAP) for 3Q16 was $18.4
million as compared to $28.7 million for 3Q15.
For the nine months ended September 30, 2016, net loss
attributable to Company stockholders was $265 million, or $20.72
per share, as compared to net loss of $51 million, or $4.19 per
share, for the same period in 2015. Adjusted net loss1 (non-GAAP)
for the nine-month period in 2016 was $96.1 million, or $7.52 per
share, as compared to adjusted net loss1 (non-GAAP) of $48.5
million, or $3.99 per share, for the same period in 2015. Cash flow
from operations for the nine-month period in 2016 was $8 million as
compared to $55 million during the same period in 2015. EBITDAX2
(non-GAAP) for the nine-month period in 2016 was $41.3 million as
compared to $91.4 million for the same period in 2015.
The key factors affecting the comparability of financial results
for 3Q16 versus 3Q15 were:
- Oil and gas sales for 3Q16, excluding
amortized deferred revenues, decreased $7.5 million compared to
3Q15. Production variances accounted for a $5.7 million decrease
and price variances accounted for a $1.8 million decrease. Average
realized oil prices were $40.62 per barrel in 3Q16 versus $43.26
per barrel in 3Q15, average realized gas prices were $2.94 per Mcf
in 3Q16 versus $2.71 per Mcf in 3Q15, and average realized natural
gas liquids (“NGL”) prices were $13.14 per barrel in 3Q16 versus
$11.01 per barrel in 3Q15. Amortized deferred revenue in 3Q16
totaled $0.4 million as compared to $0.8 million in 3Q15.
- Oil, gas and NGL production per barrel
of oil equivalent (“BOE”) decreased 10% in 3Q16 as compared to
3Q15, with oil production decreasing 11% to 9,935 barrels per day,
gas production decreasing 19% to 13,989 Mcf per day, and NGL
production increasing 9% to 1,685 barrels per day. Oil and NGL
production accounted for approximately 83% of the Company’s total
BOE production in 3Q16 versus 82% in 3Q15. After giving effect to
the sale of interests in certain wells in Glasscock County, Texas
in July 2016 and the sale of selected leases and wells in South
Louisiana in September 2015, oil, gas and NGL production per BOE
decreased 7% in 3Q16 as compared to 3Q15. See accompanying tables
for additional information about the Company’s oil and gas
production.
- Production costs in 3Q16 were $17.8
million versus $20.7 million in 3Q15 due to lower oilfield service
costs. Production costs on a BOE basis, excluding production taxes,
decreased 3% to $12.25 per BOE in 3Q16 versus $12.68 per BOE in
3Q15.
- Interest expense for 3Q16 was $26.6
million versus $13.6 million for 3Q15. The increase was due
primarily to $13.9 million of incremental interest expense on
funded indebtedness incurred under a second lien term loan credit
facility issued in connection with a refinancing in March 2016 (the
“Refinancing”). For 3Q16, the Company elected to pay interest on
the term loan facility in-kind and resulted in an increase in the
principal amount of the term loan to $377.2 million.
- The Company accounts for the warrants
issued in connection with the Refinancing as derivative instruments
and carries the warrants as a non-current liability at their fair
value. The Company recorded a $123.4 million loss on change in fair
value in 3Q16 due primarily to the impact on the valuation model of
a 211% increase in the market price of the Company’s common stock
from $27.46 at June 30, 2016 to $85.44 at September 30, 2016.
- Gain on commodity derivatives for 3Q16
was $1.3 million (net of a $2.4 million loss on settled contracts)
versus a gain on commodity derivatives in 3Q15 of $18.1 million
(including a $6.4 million gain on settled contracts). See
accompanying tables for additional information about the Company’s
accounting for derivatives.
- Lower commodity prices negatively
impacted our results of operations due to asset impairments. We
recorded an impairment of proved properties of $1.1 million in 3Q16
related primarily to non-core prospects in California and the
Cotton Valley area of Texas versus $3.1 million in 3Q15 related to
non-core prospects in the Permian Basin and California.
- General and administrative expenses for
3Q16 were $5.6 million versus $4.6 million for 3Q15. Changes in
compensation expense related to the Company’s APO reward plans
accounted for $0.9 million of the increase ($1.1 million credit in
3Q16 versus $2 million credit in 3Q15), and additional expense
related to issuances of restricted stock and stock options under
the Company’s recent long-term incentive plan accounted for a $0.8
million increase. These increases were partially offset by
reductions in salary and personnel expense.
- The Company redeemed $100 million of
7.75% Senior Notes due 2019 in a tender offer in August 2016 and
recorded a gain on early extinguishment of long-term debt during
3Q16 of $4 million.
1
See “Computation of Adjusted Net Loss (non-GAAP)” below for an
explanation of how the Company calculates and uses adjusted net
loss (non-GAAP) and for a reconciliation of net loss (GAAP) to
adjusted net loss (non-GAAP). 2 See “Computation of EBITDAX
(non-GAAP)” below for an explanation of how the Company calculates
and uses EBITDAX (non-GAAP) and for a reconciliation of net loss
(GAAP) to EBITDAX (non-GAAP).
Balance Sheet and Liquidity
As of September 30, 2016, total long-term debt was $846.5
million, consisting of $351.5 million (net of $25.7 million of
original issue discount and debt issuance costs) under the second
lien term loan credit facility and $495 million, net of costs, of
7.75% Senior Notes due 2019 (the “Notes”). The borrowing base
established by the banks under the revolving credit facility and
the aggregate lender commitment was $100 million at
September 30, 2016. The Company had $98.1 million of
availability under the revolving credit facility after allowing for
outstanding letters of credit of $1.9 million. Liquidity,
consisting of cash, short-term investments and funds available on
the revolving credit facility, totaled $321.1 million.
In July 2016, the Company entered into an agreement to sell
5,051,100 shares of common stock to funds managed by Ares
Management, L.P. for cash proceeds of $150 million or approximately
$29.70 per share, which transaction closed on August 29, 2016. In
connection with the transaction, lenders under the Company’s term
loan credit facility waived certain restrictions to enable the
Company to use proceeds from equity issuances and specified asset
sales for debt reduction and capital expenditures.
In July 2016, the Company commenced a modified “Dutch Auction”
cash tender offer to purchase up to $100 million aggregate
principal amount of Notes, which offer expired on August 29, 2016.
The Company accepted for purchase $100 million in aggregate
principal amount of Notes at a purchase price of $947.50 per $1,000
principal amount, which included an early tender premium of $30.00
for each $1,000 principal amount of Notes so purchased.
Operational Update
During 3Q16, the Company drilled and completed two wells in
Reeves County, Texas. For the remainder of the year, the Company
plans to drill four more wells in Reeves County, Texas targeting
the Wolfcamp A and Wolfcamp C benches. For 2016, the Company
expects to have eight wells drilled by year end, with five on
production and three in various stages of completion.
The Collier 34-51 #1H, the Company’s first slick water
completion, that had an initial seven day flow-back of just over
2,100 BOE per day continues to perform above our expectations. The
peak 30-day production from this well averaged 2,089 BOE per day
(82% Oil, 9% NGL). This well has been on production since mid-July
and is currently producing at a daily rate of 1,312 BOE.
We plan to announce our 2017 capital program and annual public
guidance during the first quarter of 2017.
Subsequent Events
On October 24, 2016, the Company announced that it had entered
into a definitive purchase and sale agreement with a third party to
sell substantially all of the Company’s assets in the Giddings Area
in East Central Texas for a sale price of $400 million. The sale is
subject to customary closing conditions and adjustments. The
Company expects to close the sale in December 2016 and use the
proceeds from the sale to fund development in the Delaware Basin
and repay a portion of its outstanding indebtedness.
Scheduled Conference Call
The Company will host a conference call to discuss these results
and other forward-looking items Thursday, November 3rd at 9:30
a.m. CT (10:30 a.m. ET).
A live webcast for investors and analysts will be available on
the Company’s website at www.claytonwilliams.com under the “Investors”
section. The webcast will be archived on the site for 30 days
following the call.
Participants should call (877) 868-1835 and indicate 4131903 as
the conference passcode. A replay will be available from 12:30 p.m.
CT (1:30 p.m. ET) on November 3rd until November 10th. To
listen to the replay dial (855) 859-2056 and enter passcode
4131903.
Clayton Williams Energy, Inc. is an independent energy company
located in Midland, Texas.
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. All statements, other
than statements of historical or current facts, that address
activities, events, outcomes and other matters that we plan,
expect, intend, assume, believe, budget, predict, forecast,
project, estimate or anticipate (and other similar expressions)
will, should or may occur in the future are forward-looking
statements. These forward-looking statements are based on
management's current belief, based on currently available
information, as to the outcome and timing of future events. The
Company cautions that its future natural gas and liquids
production, revenues, cash flows, liquidity, plans for future
operations, expenses, outlook for oil and natural gas prices,
timing of capital expenditures and other forward-looking statements
are subject to all of the risks and uncertainties, many of which
are beyond our control, incident to the exploration for and
development, production and marketing of oil and gas.
These risks include, but are not limited to, the possibility of
unsuccessful exploration and development drilling activities, our
ability to replace and sustain production, commodity price
volatility, domestic and worldwide economic conditions, the
availability of capital on economic terms to fund our capital
expenditures and acquisitions, our level of indebtedness, the
impact of the current economic recession on our business
operations, financial condition and ability to raise capital,
declines in the value of our oil and gas properties resulting in a
decrease in our borrowing base under our credit facility and
impairments, the ability of financial counterparties to perform or
fulfill their obligations under existing agreements, the
uncertainty inherent in estimating proved oil and gas reserves and
in projecting future rates of production and timing of development
expenditures, drilling and other operating risks, lack of
availability of goods and services, regulatory and environmental
risks associated with drilling and production activities, the
adverse effects of changes in applicable tax, environmental and
other regulatory legislation, and other 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 EndedSeptember
30,
Nine Months EndedSeptember
30,
2016 2015 2016
2015 REVENUES Oil and gas sales $ 43,470 $ 51,307 $ 113,351
$ 178,539 Midstream services 1,538 1,500 3,897 4,714 Drilling rig
services — — — 23 Other operating revenues 10,430
1,774 10,699 8,678 Total
revenues 55,438 54,581 127,947
191,954 COSTS AND EXPENSES Production
17,776 20,665 54,160 67,188 Exploration: Abandonments and
impairments 2,483 874 3,507 5,005 Seismic and other (8 ) 239 421
1,210 Midstream services 195 406 1,364 1,339 Drilling rig services
1,125 922 3,591 4,418 Depreciation, depletion and amortization
38,349 36,861 115,140 121,636 Impairment of property and equipment
1,091 3,089 3,438 5,620 Accretion of asset retirement obligations
1,290 1,001 3,360 2,936 General and administrative 5,571 4,631
23,027 25,102 Other operating expenses 579
5,632 3,094 8,479 Total costs
and expenses 68,451 74,320
211,102 242,933 Operating loss (13,013
) (19,739 ) (83,155 ) (50,979 ) OTHER
INCOME (EXPENSE) Interest expense (26,580 ) (13,565 ) (70,224 )
(40,451 ) Gain on early extinguishment of long-term debt 3,967 —
3,967 — Loss on change in fair value of common stock warrants
(123,351 ) — (154,956 ) — Gain (loss) on commodity derivatives
1,330 18,099 (13,997 ) 10,431 Impairment of investment and other
1,367 743 (5,832 ) 2,307
Total other income (expense) (143,267 ) 5,277
(241,042 ) (27,713 ) Loss before income taxes
(156,280 ) (14,462 ) (324,197 ) (78,692 ) Income tax benefit
7,504 5,039 59,223 27,705
NET LOSS $ (148,776 ) $ (9,423 ) $ (264,974 ) $ (50,987 )
Net loss per common share: Basic $ (10.62 ) $ (0.77 ) $
(20.72 ) $ (4.19 ) Diluted $ (10.62 ) $ (0.77 ) $ (20.72 ) $ (4.19
) Weighted average common shares outstanding: Basic 14,013
12,170 12,789 12,170
Diluted 14,013 12,170
12,789 12,170
CLAYTON
WILLIAMS ENERGY, INC. CONSOLIDATED BALANCE SHEETS (In
thousands) ASSETS September
30, December 31, 2016 2015
CURRENT ASSETS
(Unaudited) Cash and cash equivalents
$ 182,993 $ 7,780 Short-term investments 40,041 — Accounts
receivable: Oil and gas sales 16,529 16,660 Joint interest and
other, net 4,764 3,661 Affiliates 187 260 Inventory 26,648 31,455
Deferred income taxes 8,778 6,526 Prepaids and other 2,031
2,463 281,971 68,805
PROPERTY AND EQUIPMENT Oil and gas properties, successful
efforts method 2,622,942 2,585,502 Pipelines and other midstream
facilities 62,609 60,120 Contract drilling equipment 123,931
123,876 Other 22,268 19,371 2,831,750
2,788,869 Less accumulated depreciation, depletion and amortization
(1,684,423 ) (1,587,585 ) Property and equipment, net
1,147,327 1,201,284 OTHER ASSETS
Investments and other 7,654 17,331 $
1,436,952 $ 1,287,420
LIABILITIES AND
STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable:
Trade $ 37,438 $ 29,197 Oil and gas sales 19,750 19,490 Affiliates
1,209 383 Fair value of commodity derivatives 10,136 — Accrued
liabilities and other 24,262 16,669
92,795 65,739 NON-CURRENT LIABILITIES
Long-term debt 846,507 742,410 Deferred income taxes 52,025 108,996
Fair value of commodity derivatives 1,490 — Fair value of common
stock warrants 171,720 — Asset retirement obligations 62,478 48,728
Accrued compensation under non-equity award plans 22,585 16,254
Deferred revenue from volumetric production payment and other
4,572 5,695 1,161,377
922,083 STOCKHOLDERS’ EQUITY Preferred stock, par
value $.10 per share — — Common stock, par value $.10 per share
1,749 1,216 Additional paid-in capital 300,309 152,686 Retained
earnings (accumulated deficit) (119,278 ) 145,696
Total stockholders' equity 182,780
299,598 $ 1,436,952 $ 1,287,420
CLAYTON WILLIAMS ENERGY, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited) (In
thousands)
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2016 2015 2016
2015 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $
(148,776 ) $ (9,423 ) $ (264,974 ) $ (50,987 ) Adjustments to
reconcile net loss to cash provided by operating activities:
Depreciation, depletion and amortization 38,349 36,861 115,140
121,636 Impairment of property and equipment 1,091 3,089 3,438
5,620 Abandonments and impairments 2,483 874 3,507 5,005 (Gain)
loss on sales of assets and impairment of inventory, net (9,901 )
3,414 (7,938 ) (835 ) Deferred income tax benefit (7,504 ) (5,039 )
(59,223 ) (27,705 ) Non-cash employee compensation (623 ) (2,679 )
7,245 4,405 (Gain) loss on commodity derivatives (1,330 ) (18,099 )
13,997 (10,431 ) Cash settlements of commodity derivatives (2,347 )
6,352 (2,371 ) 4,585 Loss on change in fair value of common stock
warrants 123,351 — 154,956 — Accretion of asset retirement
obligations 1,290 1,001 3,360 2,936 Amortization of debt issue
costs and original issue discount 1,564 746 5,517 2,241 Gain on
early extinguishment of long-term debt (3,967 ) — (3,967 ) — Paid
in-kind interest expense 13,925 — 27,196 — Amortization of deferred
revenue from volumetric production payment (427 ) (1,680 ) (1,066 )
(5,181 ) Impairment of investment and other 149 265 8,530 669
Changes in operating working capital: Accounts receivable (1,325 )
4,280 (898 ) 25,307 Accounts payable 9,654 (5,846 ) (1,702 )
(32,057 ) Other 8,416 12,260
7,219 9,788 Net cash provided by operating
activities 24,072 26,376 7,966
54,996 CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (33,357 ) (30,413 ) (62,331 )
(155,680 ) Termination of volumetric production payment — (13,703 )
— (13,703 ) Net (purchase) redemption of short-term investments
53,910 — (40,041 ) — Proceeds from sales of assets 22,193 14,744
27,369 47,484 Decrease in equipment inventory 1,075 103 1,552 1,130
Proceeds from volumetric production payment and other (821 )
1,001 (689 ) 1,499 Net cash
provided by (used in) investing activities 43,000
(28,268 ) (74,140 ) (119,270 ) CASH FLOWS FROM
FINANCING ACTIVITIES Proceeds from long-term debt — 3,000 343,237
45,000 Net repayments of Senior Notes (95,001 ) — (95,001 ) —
Repayments of long-term debt — — (160,000 ) — Payment of debt
issuance costs (51 ) — (10,958 ) — Proceeds from sale of common
stock 147,346 — 147,346 — Proceeds from issuance of common stock
warrants — — 16,763
— Net cash provided by financing activities
52,294 3,000 241,387
45,000 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
119,366 1,108 175,213 (19,274 ) CASH AND CASH EQUIVALENTS Beginning
of period 63,627 7,634 7,780
28,016 End of period $ 182,993 $ 8,742
$ 182,993 $ 8,742
CLAYTON WILLIAMS ENERGY, INC.
COMPUTATION OF ADJUSTED NET LOSS
(NON-GAAP)
(Unaudited)
(In thousands, except per
share)
Adjusted net loss is presented as a supplemental non-GAAP
financial measure because of its wide acceptance by financial
analysts, investors, debt holders, banks, rating agencies and other
financial statement users as a tool for operating trends analysis
and industry comparisons. Adjusted net loss is not an alternative
to net loss presented in conformity with GAAP.
The Company defines adjusted net loss as net loss before changes
in fair value of commodity derivatives and common stock warrants,
abandonments and impairments, impairments of property and
equipment, net (gain) loss on sales of assets and impairment of
inventory, gain on early extinguishment of long-term debt,
amortization of deferred revenue from volumetric production
payment, impairment of investments, certain non-cash and unusual
items and the impact on taxes of the adjustments for each period
presented.
The following table is a reconciliation of net loss (GAAP) to
adjusted net loss (non-GAAP):
Three Months Ended Nine
Months Ended September 30, September 30,
2016 2015 2016
2015 Net loss $ (148,776 ) $ (9,423 ) $ (264,974 ) $
(50,987 ) (Gain) loss on commodity derivatives (1,330 ) (18,099 )
13,997 (10,431 ) Cash settlements of commodity derivatives (2,347 )
6,352 (2,371 ) 4,585 Loss on change in fair value of common stock
warrants 123,351 — 154,956 — Abandonments and impairments 2,483 874
3,507 5,005 Impairment of property and equipment 1,091 3,089 3,438
5,620 Net (gain) loss on sales of assets and impairment of
inventory (9,901 ) 3,414 (7,938 ) (835 ) Gain on early
extinguishment of long-term debt (3,967 ) — (3,967 ) — Amortization
of deferred revenue from volumetric production payment (427 )
(1,680 ) (1,066 ) (5,181 ) Non-cash employee compensation (623 )
(2,679 ) 7,245 4,405 Impairment of investment and other 149 265
8,530 669 Tax impact (a) 5,205 2,945
(7,481 ) (1,351 )
Adjusted net loss $ (35,092
) $ (14,942 ) $ (96,124 ) $ (48,501 )
Adjusted earnings
per share: Diluted $ (2.50 ) $ (1.23 ) $ (7.52 ) $ (3.99 )
Weighted average common shares outstanding: Diluted
14,013 12,170 12,789 12,170
Effective tax rates 35.0
% 34.8 % 35.0 % 35.2 %
_______
(a) The tax impact is computed utilizing the Company’s
effective tax rate on the adjustments for each period presented,
giving effect to the loss on change in fair value of common stock
warrants being non-deductible for income tax purposes.
CLAYTON WILLIAMS ENERGY, INC.
COMPUTATION OF EBITDAX
(NON-GAAP)
(Unaudited)
(In thousands)
EBITDAX is presented as a supplemental non-GAAP financial
measure because of its wide acceptance by financial analysts,
investors, debt holders, banks, rating agencies and other financial
statement users as an indication of an entity's ability to meet its
debt service obligations and to internally fund its exploration and
development activities. EBITDAX is not an alternative to net loss
or cash flow from operating activities, or any other measure of
financial performance presented in conformity with GAAP.
The Company defines EBITDAX as net loss before interest expense,
income taxes, exploration costs, net (gain) loss on sales of assets
and impairment of inventory, gain on early extinguishment of
long-term debt and all non-cash items in the Company's statements
of operations, including depreciation, depletion and amortization,
impairment of property and equipment, accretion of asset retirement
obligations, amortization of deferred revenue from volumetric
production payment, certain employee compensation, changes in fair
value of commodity derivatives and common stock warrants,
impairment of investments and certain non-cash and unusual
items.
The following table reconciles net loss to EBITDAX:
Three Months Ended Nine
Months Ended September 30, September 30,
2016 2015 2016
2015 Net loss $ (148,776 ) $ (9,423 ) $ (264,974 ) $ (50,987
) Interest expense 26,580 13,565 70,224 40,451 Income tax benefit
(7,504 ) (5,039 ) (59,223 ) (27,705 ) Exploration: Abandonments and
impairments 2,483 874 3,507 5,005 Seismic and other (8 ) 239 421
1,210 Net (gain) loss on sales of assets and impairment of
inventory (9,901 ) 3,414 (7,938 ) (835 ) Gain on early
extinguishment of long-term debt (3,967 ) — (3,967 ) —
Depreciation, depletion and amortization 38,349 36,861 115,140
121,636 Impairment of property and equipment 1,091 3,089 3,438
5,620 Accretion of asset retirement obligations 1,290 1,001 3,360
2,936 Amortization of deferred revenue from volumetric production
payment (427 ) (1,680 ) (1,066 ) (5,181 ) Non-cash employee
compensation (623 ) (2,679 ) 7,245 4,405 (Gain) loss on commodity
derivatives (1,330 ) (18,099 ) 13,997 (10,431 ) Cash settlements of
commodity derivatives (2,347 ) 6,352 (2,371 ) 4,585 Loss on change
in fair value of common stock warrants 123,351 — 154,956 —
Impairment of investment and other 149 265
8,530 669 EBITDAX $ 18,410
$ 28,740 $ 41,279 $ 91,378
The following table reconciles net cash provided by operating
activities to EBITDAX: Net cash provided by operating
activities $ 24,072 $ 26,376 $ 7,966 $ 54,996 Changes in operating
working capital (16,745 ) (10,694 ) (4,619 ) (3,038 ) Seismic and
other (8 ) 239 421 1,210 Cash interest expense 11,091
12,819 37,511 38,210
EBITDAX $ 18,410 $ 28,740 $ 41,279 $ 91,378
CLAYTON WILLIAMS
ENERGY, INC. SUMMARY PRODUCTION AND PRICE DATA
(Unaudited)
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2016 2015 2016
2015 Oil and Gas Production Data: Oil (MBbls) 914
1,026 2,707 3,330 Gas (MMcf) 1,287 1,590 3,756 4,458 Natural gas
liquids (MBbls) 155 142 427 418 Total (MBOE)(a) 1,284 1,433 3,760
4,491 Total (BOE/d) 13,952 15,576 13,723 16,451
Average Realized
Prices (b) (c): Oil ($/Bbl) $ 40.62 $
43.26 $ 36.44 $ 46.93 Gas ($/Mcf) $ 2.94 $ 2.71 $
2.19 $ 2.65 Natural gas liquids ($/Bbl) $ 13.14 $
11.01 $ 12.21 $ 13.09
Gain (Loss) on Settled Commodity
Derivative Contracts (c): ($ in thousands, except
per unit) Oil: Cash settlements received (paid) $ (2,347 ) $ 6,352
$ (2,371 ) $ 4,585 Per unit produced ($/Bbl) $ (2.57 ) $ 6.19 $
(0.88 ) $ 1.38
Average Daily Production (d):
Oil (Bbls): Permian Basin Area: Delaware Basin 3,749 3,175 3,161
3,561 Other (e) 2,789 3,221 2,856 3,141 Austin Chalk 1,635 1,806
1,705 1,884 Eagle Ford Shale 1,518 2,634 1,721 3,269 Other (f)
244 316 437 343 Total
9,935 11,152 9,880 12,198
Natural Gas (Mcf): Permian Basin Area: Delaware Basin 2,833 2,766
2,678 3,036 Other (e) 5,821 6,771 5,732 6,653 Austin Chalk 1,706
1,708 1,702 1,737 Eagle Ford Shale 299 451 339 540 Other (f)
3,330 5,587 3,257 4,364 Total
13,989 17,283 13,708
16,330 Natural Gas Liquids (Bbls): Permian Basin Area: Delaware
Basin 543 408 458 417 Other (e) 823 814 764 794 Austin Chalk 196
179 184 169 Eagle Ford Shale 82 121 84 126 Other (f) 41
21 68 25 Total 1,685
1,543 1,558 1,531 BOE/d: Permian
Basin Area: Delaware Basin 4,764 4,044 4,065 4,484 Other (e) 4,583
5,164 4,575 5,044 Austin Chalk 2,115 2,270 2,173 2,343 Eagle Ford
Shale 1,650 2,830 1,862 3,485 Other (f) 840
1,268 1,048 1,095 Total 13,952
15,576 13,723 16,451
Oil and
Gas Costs ($/BOE Produced): Production costs $ 13.84 $ 14.42 $
14.40 $ 14.96 Production costs (excluding production taxes) $ 12.25
$ 12.68 $ 13.00 $ 12.99 Oil and gas depletion $ 27.09 $ 23.26 $
27.64 $ 24.60
______
(a) Natural gas reserves have been converted to oil
equivalents at the ratio of six Mcf of gas to one Bbl of oil.
(b) Oil and gas sales includes $0.4 million for three months
ended September 30, 2016, $0.8 million for the three months ended
September 30, 2015, $1.1 million for the nine months ended
September 30, 2016 and $4.3 million for the nine months ended
September 30, 2015 of amortized deferred revenue attributable to a
volumetric production payment (“VPP”) transaction effective March
1, 2012. In August 2015, we terminated the VPP covering 277 MBOE of
oil and gas production from August 2015 through December 2019 for
$13.7 million. The calculation of average realized sales prices
excludes production of 7,371 barrels of oil and 4,898 Mcf of gas
for the three months ended September 30, 2015 and 53,026 barrels of
oil and 35,735 Mcf of gas for the nine months ended September 30,
2015 associated with the VPP. (c) No commodity derivatives
were designated as cash flow hedges in the table above. All gains
or losses on settled commodity derivatives were included in other
income (expense) - gain (loss) on commodity derivatives. (d)
Historical average daily production volumes have been reclassified
to conform with current period presentation. (e) The average
daily production related to interests in certain wells in Glasscock
County, Texas sold in July 2016 was 90 total BOE for the three
months ended September 30, 2016, 90 total BOE for the three months
ended September 30, 2015, 66 total BOE for the nine months ended
September 30, 2016 and 119 total BOE for the nine months ended
September 30, 2015. (f) The average daily production related
to selected leases and wells in South Louisiana sold in September
2015 was 584 total BOE for the three months ended September 30,
2015 and 521 total BOE for the nine months ended September 30,
2015.
CLAYTON WILLIAMS ENERGY, INC.
SUMMARY OF OPEN COMMODITY
DERIVATIVES
(Unaudited)
The following summarizes information concerning the Company’s
net positions in open commodity derivatives applicable to periods
subsequent to September 30, 2016. Settlement prices of
commodity derivatives are based on NYMEX futures prices.
Swaps:
Oil MBbls Price
Production Period: 4th Quarter 2016 619 $ 41.18 2017 407 $ 45.58
1,026
Costless Collars:
Oil Weighted
Weighted Average Average MBbls Floor
Price Ceiling Price Production Period: 2017 1,415 $
42.27 $ 51.66 1,415
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version on businesswire.com: http://www.businesswire.com/news/home/20161102006911/en/
Clayton Williams Energy, Inc.Patti Hollums,
432-688-3419Director of Investor
Relationscwei@claytonwilliams.comwww.claytonwilliams.comorJaime
R. Casas, 432-688-3224Chief Financial Officer
Williams (CLAYTON) Energy, Inc. (NYSE:CWEI)
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