Clayton Williams Energy, Inc. (NASDAQ:CWEI) reported a net
loss attributable to Company stockholders for the second quarter of 2009
of $38.6 million, or $3.18 per share, as compared to a net loss of $21.2
million, or $1.75 per share, for the second quarter of 2008. Cash flow
from operations for the second quarter of 2009 was $26.6 million as
compared to $71.4 million during the same period in 2008.
For the six months ended June 30, 2009, the Company reported a net loss
attributable to Company stockholders of $60.9 million, or $5.02 per
share, as compared to a net loss of $14 million, or $1.19 per share, for
the same period in 2008. Cash flow from operations for the six-month
period in 2009 was $39.9 million as compared to $149.4 million during
the same period in 2008.
As previously reported, the current quarter included a non-cash charge
of $32.1 million related to the impairment of certain drilling rigs and
related equipment of Desta Drilling, LP (formerly Larclay JV) to reduce
the carrying value of the equipment to its estimated fair value.
The Company’s operating results continue to be negatively impacted by
the effects of the current global recession. Oil and gas sales decreased
57% from $134.3 million for the second quarter of 2008 to $57.2 million
for the same quarter in 2009. Substantially all of the reduction in oil
and gas sales was attributable to lower product prices. Average realized
oil prices for the second quarter of 2009 decreased 53% to $56.55 per
barrel from $121.51 per barrel in the 2008 period, while gas prices
decreased 65% to $3.84 per Mcf from $11.07 per Mcf in the same quarter
of 2008. Average realized prices for 2009 and 2008 exclude the effects
of any gains or losses realized on commodity hedging transactions since
those derivatives were not designated as cash flow hedges and have been
reported in the Company’s statements of operations as gain/loss on
derivatives under applicable accounting standards.
Oil production for the second quarter of 2009 increased 2% to 716,000
barrels, or 7,868 barrels per day, compared to 703,000 barrels, or 7,725
barrels per day, in the second quarter of 2008. Gas production for the
second quarter 2009 decreased 8% to 3.9 Bcf, or 42,374 Mcf per day, from
4.2 Bcf, or 45,901 Mcf per day, in the 2008 quarter.
For the second quarter of 2009, the Company reported a $21.8 million net
loss on derivatives, consisting of a $20.3 million non-cash loss to mark
the Company’s derivative positions to their fair value on June 30, 2009
and a $1.5 million realized loss on settled contracts. For the same
period in 2008, the Company reported a $148.6 million net loss on
derivatives, consisting of a $35 million realized loss on settled
contracts and a $113.6 million non-cash loss due to changes in
mark-to-market valuations.
The Company will host a conference call to discuss these results and
other forward-looking items today, August 5th at 1:30 pm CT (2:30 pm
ET). The dial-in conference number is: 800-901-5213, passcode 17565605.
The replay will be available for one week at 888-286-8010, passcode
92376806.
To access the conference call via Internet webcast, please go to the
Investor Relations 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.
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.
TABLES AND SUPPLEMENTAL INFORMATION FOLLOW . . .
|
CLAYTON WILLIAMS ENERGY, INC.
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
(In thousands, except per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
Oil and gas sales
|
|
$
|
57,206
|
|
|
$
|
134,291
|
|
|
$
|
108,002
|
|
|
$
|
253,210
|
|
|
|
Natural gas services
|
|
|
1,355
|
|
|
|
3,553
|
|
|
|
2,939
|
|
|
|
6,091
|
|
|
|
Drilling rig services
|
|
|
1,462
|
|
|
|
12,703
|
|
|
|
6,681
|
|
|
|
27,535
|
|
|
|
Gain on sales of assets
|
|
|
480
|
|
|
|
40,721
|
|
|
|
663
|
|
|
|
41,290
|
|
|
|
|
Total revenues
|
|
|
60,503
|
|
|
|
191,268
|
|
|
|
118,285
|
|
|
|
328,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
18,296
|
|
|
|
21,925
|
|
|
|
37,359
|
|
|
|
42,504
|
|
|
|
Exploration:
|
|
|
|
|
|
|
|
|
|
|
|
Abandonments and impairments
|
|
|
4,505
|
|
|
|
1,933
|
|
|
|
16,917
|
|
|
|
2,230
|
|
|
|
|
Seismic and other
|
|
|
1,388
|
|
|
|
1,562
|
|
|
|
5,658
|
|
|
|
5,237
|
|
|
|
Natural gas services
|
|
|
1,211
|
|
|
|
3,244
|
|
|
|
2,622
|
|
|
|
5,759
|
|
|
|
Drilling rig services
|
|
|
2,911
|
|
|
|
9,923
|
|
|
|
9,997
|
|
|
|
21,040
|
|
|
|
Depreciation, depletion and amortization
|
|
|
26,186
|
|
|
|
24,974
|
|
|
|
62,651
|
|
|
|
55,247
|
|
|
|
Impairment of property and equipment (a)
|
|
|
32,068
|
|
|
|
-
|
|
|
|
32,068
|
|
|
|
-
|
|
|
|
Accretion of abandonment obligations
|
|
|
748
|
|
|
|
485
|
|
|
|
1,466
|
|
|
|
1,015
|
|
|
|
General and administrative
|
|
|
6,256
|
|
|
|
7,944
|
|
|
|
10,784
|
|
|
|
11,392
|
|
|
|
Loss on sales of assets and inventory write-downs
|
|
|
396
|
|
|
|
277
|
|
|
|
3,845
|
|
|
|
286
|
|
|
|
|
Total costs and expenses
|
|
|
93,965
|
|
|
|
72,267
|
|
|
|
183,367
|
|
|
|
144,710
|
|
|
|
|
Operating income (loss)
|
|
|
(33,462
|
)
|
|
|
119,001
|
|
|
|
(65,082
|
)
|
|
|
183,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(5,736
|
)
|
|
|
(6,077
|
)
|
|
|
(11,174
|
)
|
|
|
(13,523
|
)
|
|
|
Loss on derivatives
|
|
|
(21,770
|
)
|
|
|
(148,587
|
)
|
|
|
(19,260
|
)
|
|
|
(194,696
|
)
|
|
|
Other
|
|
|
|
826
|
|
|
|
3,014
|
|
|
|
1,727
|
|
|
|
3,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
(26,680
|
)
|
|
|
(151,650
|
)
|
|
|
(28,707
|
)
|
|
|
(204,550
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(60,142
|
)
|
|
|
(32,649
|
)
|
|
|
(93,789
|
)
|
|
|
(21,134
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
21,943
|
|
|
|
11,642
|
|
|
|
34,321
|
|
|
|
7,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
|
|
(38,199
|
)
|
|
|
(21,007
|
)
|
|
|
(59,468
|
)
|
|
|
(13,714
|
)
|
|
|
Less income attributable to noncontrolling interest, net of tax (a)
|
|
|
(409
|
)
|
|
|
(164
|
)
|
|
|
(1,455
|
)
|
|
|
(278
|
)
|
|
Net Loss attributable to Clayton Williams Energy, Inc.
|
|
$
|
(38,608
|
)
|
|
$
|
(21,171
|
)
|
|
$
|
(60,923
|
)
|
|
$
|
(13,992
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share attributable to Clayton Williams
|
|
|
|
|
|
|
|
|
|
Energy, Inc. stockholders:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(3.18
|
)
|
|
$
|
(1.75
|
)
|
|
$
|
(5.02
|
)
|
|
$
|
(1.19
|
)
|
|
|
Diluted
|
|
$
|
(3.18
|
)
|
|
$
|
(1.75
|
)
|
|
$
|
(5.02
|
)
|
|
$
|
(1.19
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
12,142
|
|
|
|
12,111
|
|
|
|
12,132
|
|
|
|
11,749
|
|
|
|
Diluted
|
|
|
12,142
|
|
|
|
12,111
|
|
|
|
12,132
|
|
|
|
11,749
|
|
|
CLAYTON WILLIAMS ENERGY, INC.
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
|
|
2009
|
|
2008
|
|
|
|
|
|
(Unaudited)
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
15,943
|
|
|
$
|
41,199
|
|
|
|
Accounts receivable:
|
|
|
|
|
|
|
|
Oil and gas sales
|
|
|
23,223
|
|
|
|
26,009
|
|
|
|
|
Joint interest and other, net
|
|
|
6,229
|
|
|
|
14,349
|
|
|
|
|
Affiliates
|
|
|
554
|
|
|
|
227
|
|
|
|
Inventory
|
|
|
32,396
|
|
|
|
20,052
|
|
|
|
Deferred income taxes
|
|
|
3,637
|
|
|
|
3,637
|
|
|
|
Assets held for sale (a)
|
|
|
18,750
|
|
|
|
-
|
|
|
|
Prepaids and other
|
|
|
18,386
|
|
|
|
20,011
|
|
|
|
|
|
|
|
119,118
|
|
|
|
125,484
|
|
|
PROPERTY AND EQUIPMENT
|
|
|
|
|
|
|
Oil and gas properties, successful efforts method
|
|
|
1,564,547
|
|
|
|
1,526,473
|
|
|
|
Natural gas gathering and processing systems
|
|
|
17,816
|
|
|
|
17,816
|
|
|
|
Contract drilling equipment (a)
|
|
|
26,465
|
|
|
|
91,151
|
|
|
|
Other
|
|
|
|
15,869
|
|
|
|
14,954
|
|
|
|
|
|
|
|
1,624,697
|
|
|
|
1,650,394
|
|
|
|
Less accumulated depreciation, depletion and amortization
|
|
|
(890,043
|
)
|
|
|
(840,366
|
)
|
|
|
|
Property and equipment, net
|
|
|
734,654
|
|
|
|
810,028
|
|
|
|
|
|
|
|
|
|
|
OTHER ASSETS
|
|
|
|
|
|
|
Debt issue costs, net
|
|
|
5,671
|
|
|
|
6,225
|
|
|
|
Other
|
|
|
|
1,830
|
|
|
|
1,672
|
|
|
|
|
|
|
|
7,501
|
|
|
|
7,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
861,273
|
|
|
$
|
943,409
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
Accounts payable:
|
|
|
|
|
|
|
|
Trade
|
|
$
|
36,603
|
|
|
$
|
67,189
|
|
|
|
|
Oil and gas sales
|
|
|
26,817
|
|
|
|
24,702
|
|
|
|
|
Affiliates
|
|
|
1,518
|
|
|
|
1,627
|
|
|
|
Current maturities of long-term debt
|
|
|
18,750
|
|
|
|
18,750
|
|
|
|
Fair value of derivatives
|
|
|
17,626
|
|
|
|
-
|
|
|
|
Accrued liabilities and other
|
|
|
11,264
|
|
|
|
10,609
|
|
|
|
|
|
|
|
112,578
|
|
|
|
122,877
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
|
|
|
Long-term debt
|
|
|
355,550
|
|
|
|
347,225
|
|
|
|
Deferred income taxes
|
|
|
86,087
|
|
|
|
120,414
|
|
|
|
Fair value of derivatives
|
|
|
1,281
|
|
|
|
-
|
|
|
|
Other
|
|
|
|
37,034
|
|
|
|
32,617
|
|
|
|
|
|
|
|
479,952
|
|
|
|
500,256
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
Preferred stock, par value $.10 per share
|
|
|
-
|
|
|
|
-
|
|
|
|
Common stock, par value $.10 per share
|
|
|
1,214
|
|
|
|
1,212
|
|
|
|
Additional paid-in capital (a)
|
|
|
152,028
|
|
|
|
137,046
|
|
|
|
Retained earnings
|
|
|
115,501
|
|
|
|
176,424
|
|
|
|
|
Total Clayton Williams Energy, Inc. stockholders' equity
|
|
|
268,743
|
|
|
|
314,682
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest, net of tax (a)
|
|
|
-
|
|
|
|
5,594
|
|
|
|
|
Total equity
|
|
|
268,743
|
|
|
|
320,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
861,273
|
|
|
$
|
943,409
|
|
|
CLAYTON WILLIAMS ENERGY, INC.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(38,199
|
)
|
|
$
|
(21,007
|
)
|
|
$
|
(59,468
|
)
|
|
$
|
(13,714
|
)
|
|
|
Adjustments to reconcile net loss to cash
|
|
|
|
|
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
26,186
|
|
|
|
24,974
|
|
|
|
62,651
|
|
|
|
55,247
|
|
|
|
Impairment of property and equipment
|
|
|
32,068
|
|
|
|
-
|
|
|
|
32,068
|
|
|
|
-
|
|
|
|
Exploration costs
|
|
|
4,505
|
|
|
|
1,933
|
|
|
|
16,917
|
|
|
|
2,230
|
|
|
|
(Gain) loss on sales of assets and inventory write-downs, net
|
|
|
(84
|
)
|
|
|
(40,444
|
)
|
|
|
3,182
|
|
|
|
(41,004
|
)
|
|
|
Deferred income tax benefit
|
|
|
(21,943
|
)
|
|
|
(11,852
|
)
|
|
|
(34,321
|
)
|
|
|
(7,752
|
)
|
|
|
Non-cash employee compensation
|
|
|
244
|
|
|
|
1,568
|
|
|
|
627
|
|
|
|
1,910
|
|
|
|
Unrealized loss on derivatives
|
|
|
20,286
|
|
|
|
113,593
|
|
|
|
18,907
|
|
|
|
145,621
|
|
|
|
Settlements on derivatives with financing elements
|
|
|
-
|
|
|
|
14,374
|
|
|
|
-
|
|
|
|
24,789
|
|
|
|
Amortization of debt issue costs
|
|
|
316
|
|
|
|
439
|
|
|
|
624
|
|
|
|
785
|
|
|
|
Accretion of abandonment obligations
|
|
|
748
|
|
|
|
485
|
|
|
|
1,466
|
|
|
|
1,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating working capital:
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
475
|
|
|
|
(5,793
|
)
|
|
|
10,579
|
|
|
|
(19,662
|
)
|
|
|
Accounts payable
|
|
|
(3,219
|
)
|
|
|
(11,587
|
)
|
|
|
(16,626
|
)
|
|
|
398
|
|
|
|
Other
|
|
|
5,196
|
|
|
|
4,688
|
|
|
|
3,264
|
|
|
|
(442
|
)
|
|
|
|
Net cash provided by operating activities
|
|
|
26,579
|
|
|
|
71,371
|
|
|
|
39,870
|
|
|
|
149,421
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Additions to property and equipment
|
|
|
(26,456
|
)
|
|
|
(68,881
|
)
|
|
|
(69,082
|
)
|
|
|
(118,500
|
)
|
|
|
Proceeds from sales of assets
|
|
|
411
|
|
|
|
113,425
|
|
|
|
670
|
|
|
|
114,049
|
|
|
|
Change in equipment inventory
|
|
|
(6,577
|
)
|
|
|
(5,157
|
)
|
|
|
(12,594
|
)
|
|
|
(6,777
|
)
|
|
|
Other
|
|
|
13
|
|
|
|
716
|
|
|
|
(97
|
)
|
|
|
785
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
(32,609
|
)
|
|
|
40,103
|
|
|
|
(81,103
|
)
|
|
|
(10,443
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
10,800
|
|
|
|
4,000
|
|
|
|
25,200
|
|
|
|
4,000
|
|
|
|
Repayments of long-term debt
|
|
|
(4,688
|
)
|
|
|
(111,563
|
)
|
|
|
(9,375
|
)
|
|
|
(128,925
|
)
|
|
|
Proceeds from exercise of stock options
|
|
|
45
|
|
|
|
9,432
|
|
|
|
152
|
|
|
|
15,884
|
|
|
|
Settlements on derivatives with financing elements
|
|
|
-
|
|
|
|
(14,374
|
)
|
|
|
-
|
|
|
|
(24,789
|
)
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
6,157
|
|
|
|
(112,505
|
)
|
|
|
15,977
|
|
|
|
(133,830
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH
|
|
|
|
|
|
|
|
|
|
AND CASH EQUIVALENTS
|
|
|
127
|
|
|
|
(1,031
|
)
|
|
|
(25,256
|
)
|
|
|
5,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
15,816
|
|
|
|
18,523
|
|
|
|
41,199
|
|
|
|
12,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
$
|
15,943
|
|
|
$
|
17,492
|
|
|
$
|
15,943
|
|
|
$
|
17,492
|
|
|
Clayton Williams Energy, Inc.
|
|
Summary Production and Price Data
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Daily Production:
|
|
|
|
|
|
|
|
|
|
|
Natural Gas (Mcf):
|
|
|
|
|
|
|
|
|
|
|
|
Permian Basin
|
|
|
15,432
|
|
|
|
14,284
|
|
|
|
15,553
|
|
|
|
14,665
|
|
|
|
|
North Louisiana
|
|
|
11,445
|
|
|
|
15,233
|
|
|
|
12,989
|
|
|
|
14,611
|
|
|
|
|
South Louisiana
|
|
|
7,699
|
|
|
|
7,347
|
|
|
|
10,132
|
|
|
|
15,405
|
|
|
|
|
Austin Chalk (Trend)
|
|
|
2,412
|
|
|
|
2,133
|
|
|
|
2,718
|
|
|
|
2,333
|
|
|
|
|
Cotton Valley Reef Complex
|
|
|
3,781
|
|
|
|
6,277
|
|
|
|
4,026
|
|
|
|
5,857
|
|
|
|
|
Other
|
|
|
1,605
|
|
|
|
627
|
|
|
|
1,372
|
|
|
|
563
|
|
|
|
|
|
Total
|
|
|
42,374
|
|
|
|
45,901
|
|
|
|
46,790
|
|
|
|
53,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (Bbls):
|
|
|
|
|
|
|
|
|
|
|
|
Permian Basin
|
|
|
4,058
|
|
|
|
3,568
|
|
|
|
4,256
|
|
|
|
3,532
|
|
|
|
|
North Louisiana
|
|
|
273
|
|
|
|
386
|
|
|
|
271
|
|
|
|
365
|
|
|
|
|
South Louisiana
|
|
|
701
|
|
|
|
105
|
|
|
|
548
|
|
|
|
545
|
|
|
|
|
Austin Chalk (Trend)
|
|
|
2,742
|
|
|
|
3,575
|
|
|
|
2,942
|
|
|
|
3,104
|
|
|
|
|
Other
|
|
|
94
|
|
|
|
91
|
|
|
|
88
|
|
|
|
75
|
|
|
|
|
|
Total
|
|
|
7,868
|
|
|
|
7,725
|
|
|
|
8,105
|
|
|
|
7,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas liquids (Bbls):
|
|
|
|
|
|
|
|
|
|
|
|
Permian Basin
|
|
|
248
|
|
|
|
153
|
|
|
|
238
|
|
|
|
185
|
|
|
|
|
North Louisiana
|
|
|
37
|
|
|
|
5
|
|
|
|
19
|
|
|
|
3
|
|
|
|
|
South Louisiana
|
|
|
60
|
|
|
|
41
|
|
|
|
52
|
|
|
|
89
|
|
|
|
|
Austin Chalk (Trend)
|
|
|
290
|
|
|
|
241
|
|
|
|
299
|
|
|
|
258
|
|
|
|
|
Other
|
|
|
13
|
|
|
|
11
|
|
|
|
11
|
|
|
|
9
|
|
|
|
|
|
Total
|
|
|
648
|
|
|
|
451
|
|
|
|
619
|
|
|
|
544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Production:
|
|
|
|
|
|
|
|
|
|
|
Natural Gas (MMcf)
|
|
|
3,856
|
|
|
|
4,177
|
|
|
|
8,469
|
|
|
|
9,725
|
|
|
|
Oil (MBbls)
|
|
|
716
|
|
|
|
703
|
|
|
|
1,467
|
|
|
|
1,387
|
|
|
|
Natural gas liquids (MBbls)
|
|
|
59
|
|
|
|
41
|
|
|
|
112
|
|
|
|
99
|
|
|
|
Total (MBOE)
|
|
|
1,418
|
|
|
|
1,440
|
|
|
|
2,991
|
|
|
|
3,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Realized Prices (b):
|
|
|
|
|
|
|
|
|
|
|
Gas ($/Mcf):
|
|
$
|
3.84
|
|
|
$
|
11.07
|
|
|
$
|
4.25
|
|
|
$
|
9.81
|
|
|
|
Oil ($/Bbl):
|
|
|
$
|
56.55
|
|
|
$
|
121.51
|
|
|
$
|
46.55
|
|
|
$
|
109.05
|
|
|
|
Natural gas liquids ($/Bbl)
|
|
$
|
24.53
|
|
|
$
|
63.63
|
|
|
$
|
23.78
|
|
|
$
|
58.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains (Losses) on settled derivative contracts (b):
|
|
|
|
|
|
|
|
|
|
|
($ in thousands, except per unit)
|
|
|
|
|
|
|
|
|
|
|
Gas:
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain (loss)
|
|
$
|
3,088
|
|
|
$
|
(10,287
|
)
|
|
$
|
4,486
|
|
|
$
|
(11,171
|
)
|
|
|
Per unit produced ($/Mcf)
|
|
$
|
0.80
|
|
|
$
|
(2.46
|
)
|
|
$
|
0.53
|
|
|
$
|
(1.15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain (loss)
|
|
$
|
(4,572
|
)
|
|
$
|
(23,348
|
)
|
|
$
|
(4,839
|
)
|
|
$
|
(36,254
|
)
|
|
|
Per unit produced ($/Bbl)
|
|
$
|
(6.39
|
)
|
|
$
|
(33.21
|
)
|
|
$
|
(3.30
|
)
|
|
$
|
(26.14
|
)
|
|
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 June 30, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
Swaps:
|
|
Gas
|
|
Oil
|
|
|
|
MMBtu (a)
|
|
Price
|
|
Bbls
|
|
Price
|
|
Production Period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter 2009
|
|
1,450,000
|
|
$
|
5.47
|
|
440,000
|
|
$
|
48.13
|
|
4th Quarter 2009
|
|
1,850,000
|
|
$
|
5.47
|
|
400,000
|
|
$
|
46.15
|
|
2010
|
|
7,540,000
|
|
$
|
6.80
|
|
327,000
|
|
$
|
53.30
|
|
2011
|
|
6,420,000
|
|
$
|
7.07
|
|
-
|
|
$
|
-
|
|
|
|
17,260,000
|
|
|
|
1,167,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) One MMBtu equals one Mcf at a Btu factor of 1,000.
|
|
CLAYTON WILLIAMS ENERGY, INC.
|
|
Notes to tables and supplemental information
|
|
|
|
|
|
|
|
(a)
|
Effective April 15, 2009, the Company acquired the remaining 50%
equity interest in Desta Drilling, LP, a contract drilling limited
partnership formerly referred to as Larclay JV (the "Partnership"),
pursuant to an agreement with Lariat Services, Inc. ("Lariat") dated
March 13, 2009 (the "Assignment"). The Assignment from Lariat to the
Company also included all of Lariat's right, title and interest in
subordinated loans previously made by Lariat to the Partnership. As
consideration for the Assignment, the Company assumed all of the
obligations and liabilities of Lariat relating to the Partnership
from and after the effective date, including Lariat's obligations as
operator of the Partnership's drilling rigs. Upon consummation of
the Assignment, the Company contributed the subordinated loans to
the Partnership's capital.
|
|
|
|
|
|
Prior to the effective date of the Assignment, the Company met the
definition of the primary beneficiary of the Partnership's expected
cash flows under FIN 46R. Accordingly, the Company fully
consolidated the accounts of the Partnership in its consolidated
financial statements and accounted for the equity interest owned by
Lariat as a noncontrolling interest. Upon consummation of the
Assignment, the Company accounted for the related transactions by
recording an increase in additional paid-in capital of $14.8
million, consisting of the contribution to equity of $7.8 million of
principal and accrued interest on subordinated loans obtained from
Lariat and the conversion to equity of $7 million of cumulative
balance in the noncontrolling interest account attributable to the
equity interests acquired from Lariat.
|
|
|
|
|
|
Upon consummation of the Assignment, the Company adopted a plan of
disposition whereby it would commit to sell eight of the
Partnership's 12 drilling rigs. The plan of disposition meets the
criteria under SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets (as amended)" ("SFAS 144"), for the
designated assets to be classified as held for sale. SFAS 144
requires the Company to value the designated assets at the lower of
their carrying value or fair value, less cost to sell, as of the
date the plan of disposition was adopted. The Company estimates the
fair value of the designated assets to be approximately $18.8
million. As a result, the Company has reclassified the estimated
fair value of the designated assets to "Assets Held for Sale" in its
consolidated balance sheet, and has recorded a related charge for
impairment of property and equipment of approximately $32.1 million
in its consolidated statement of operations for the second quarter
of 2009.
|
|
|
|
|
(b)
|
Hedging gains/losses are only included in the determination of the
Company's average realized prices if the underlying derivative
contracts are designated as cash flow hedges under applicable
accounting standards. The Company did not designate any of its 2009
or 2008 derivative contracts as cash flow hedges. This means that
the Company's derivatives for 2009 and 2008 have been
marked-to-market through its statement of operations as other
income/expense instead of through accumulated other comprehensive
income on the Company's balance sheet. This also means that all
realized gains/losses on these derivatives are reported in other
income/expense instead of as a component of oil and gas sales.
|
Clayton Williams Energy, Inc.
Patti Hollums, 432-688-3419
Director
of Investor Relations
cwei@claytonwilliams.com
www.claytonwilliams.com
or
Mel
G. Riggs, 432-688-3431
Chief Financial Officer
