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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Clayton Williams Energy, Inc. | NYSE:CWEI | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 131.90 | 0.00 | 01:00:00 |
Clayton Williams Energy, Inc. (the “Company”) (NYSE:CWEI) today reported its financial results for the quarter and year ended December 31, 2016.
Highlights
Fiscal 2016 Results
Year-End 2016 Reserves
Recent Transactions
Financial Results for Fiscal Year 2016
The Company reported a net loss for fiscal 2016 of $292.2 million, or $20.87 per share, as compared to net loss of $98.2 million, or $8.07 per share, for fiscal 2015. Adjusted net loss1 (non-GAAP) for 2016 was $127.7 million, or $9.12 per share, as compared to adjusted net loss1 (non-GAAP) of $70.4 million, or $5.78 per share, for 2015. Cash flow from operations for 2016 was $10.7 million as compared to $52.2 million for 2015. EBITDAX2 (non-GAAP) for 2016 was $54.6 million as compared to $112.1 million for 2015.
The key factors affecting the comparability of the past two years were:
Financial Results for the Fourth Quarter of 2016
The Company reported net loss for the fourth quarter of 2016 (“4Q16”) of $27.2 million, or $1.54 per share, as compared to a net loss of $47.2 million, or $3.88 per share, for the fourth quarter of 2015 (“4Q15”). Adjusted net loss1 (non-GAAP) for 4Q16 was $26.2 million, or $1.49 per share, as compared to adjusted net loss1 (non-GAAP) of $22.1 million, or $1.82 per share, for 4Q15. Cash flow from operations for 4Q16 was $2.8 million as compared to $(2.8) million for 4Q15. EBITDAX2 (non-GAAP) for 4Q16 was $13.3 million as compared to $20.7 million for 4Q15.
The key factors affecting the comparability of financial results for 4Q16 versus 4Q15 were:
Balance Sheet and Liquidity
As of December 31, 2016, total long-term debt was $848 million, consisting of $352.5 million (net of $24.7 million of original issue discount and debt issuance costs) under the second lien term loan credit facility and $495.5 million (net of $4.5 million of original issue discount and debt issuance costs) of 2019 Senior Notes. The borrowing base established by the banks under the revolving credit facility and the aggregate lender commitment was $100 million at December 31, 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 and funds available on the revolving credit facility, totaled $671.1 million.
Subsequent Events
Proposed Merger with Noble Energy, Inc.
On January 16, 2017, the Company and Noble Energy, Inc. (“Noble Energy”) announced that the Boards of Directors of both companies unanimously approved and executed a definitive agreement under which Noble Energy will acquire all of the outstanding common stock of the Company for $2.7 billion in Noble Energy common stock and cash. The merger is expected to close in the second quarter of 2017.
Purchase of Net Mineral Acres in Southern Reeves County, Texas
In January 2017, the Company purchased approximately 1,900 net mineral acres in Southern Reeves County, Texas from a private seller, for cash consideration totaling $44.3 million. The acreage is located in and around the Company’s existing contiguous acreage block. Also included in the deal was a non-operated gross working interest of approximately 26% in an existing horizontal well.
Reserves
The Company reported total estimated proved oil and gas reserves as of December 31, 2016 of 34.8 million barrels of oil equivalent (“MMBOE”), consisting of 24.3 million barrels of oil, 4.8 million barrels of NGL and 33.6 Bcf of natural gas. On a BOE basis, oil and NGL comprised 84% of total proved reserves at year-end 2016 versus 83% at year-end 2015. Proved developed reserves at year-end 2016 were 22 MMBOE, or 63% of total proved reserves, versus 36.3 MMBOE, or 78% of total proved reserves, at year-end 2015. The present value of estimated future net cash flows from total proved reserves, before deductions for estimated future income taxes and asset retirement obligations, discounted at 10% (referred to as “PV-10”), totaled $204.4 million at year-end 2016 versus $442.8 million at year-end 2015. See accompanying tables for a reconciliation of PV-10 (a non-GAAP financial measure) to standardized measure of discounted future net cash flows (a GAAP financial measure).
The following table summarizes the changes in total proved reserves during 2016 on an MMBOE basis:
MMBOE Total proved reserves, December 31, 2015 46.6 Extensions and discoveries 4.1 Revisions (0.2 ) Sales of reserves (10.7 ) Production (5.0 ) Total proved reserves, December 31, 2016 34.8The Company replaced 82% of its 2016 oil and gas production through extensions and discoveries. Most of the 4.1 MMBOE of reserve additions in 2016 are attributable to the Company’s Delaware Basin program in Southern Reeves County, Texas. Oil and NGL accounted for 85.1% of the 2016 reserve additions.
The 0.2 MMBOE of net downward revisions in proved reserves resulted from a combination of (1) net upward revisions of 11.6 MMBOE related to performance in the Company’s Delaware Basin reserves in Southern Reeves County, Texas, and (2) downward revisions of 11.8 MMBOE related to the effects of lower commodity prices on the estimated quantities of proved reserves.
SEC guidelines require that the Company’s estimated proved reserves and related PV-10 be determined using benchmark commodity prices equal to the unweighted arithmetic average of the first-day-of-the-month prices for the 12-month period prior to the effective date of each reserve estimate. The benchmark averages for 2016 were $42.75 per barrel of oil and $2.49 per MMBtu of natural gas, as compared to $50.28 per barrel of oil and $2.58 per MMBtu of natural gas for 2015. These benchmark prices were further adjusted for quality, energy content, transportation fees and other price differentials specific to the Company’s properties, resulting in an average adjusted price over the remaining life of the proved reserves of $36.60 per barrel of oil, $13.60 per barrel of NGL and $2.36 per Mcf of natural gas for year-end 2016, as compared to $45.75 per barrel of oil, $15.84 per barrel of NGL and $2.52 per Mcf of natural gas for year-end 2015.
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 EndedDecember 31,
Year EndedDecember 31,
2016 2015 2016 2015 REVENUES Oil and gas sales $ 46,980 $ 38,946 $ 160,331 $ 217,485 Midstream services 1,791 1,408 5,688 6,122 Drilling rig services — — — 23 Other operating revenues 112,693 64 123,392 8,742 Total revenues 161,464 40,418 289,411 232,372 COSTS AND EXPENSES Production 16,760 20,369 70,920 87,557 Exploration: Abandonments and impairments 29 1,504 3,536 6,509 Seismic and other 504 108 925 1,318 Midstream services 809 349 2,173 1,688 Drilling rig services 347 820 3,938 5,238 Depreciation, depletion and amortization 30,474 40,626 145,614 162,262 Impairment of property and equipment 4,155 36,297 7,593 41,917 Accretion of asset retirement obligations 1,004 1,009 4,364 3,945 General and administrative (39 ) (2,314 ) 22,988 22,788 Other operating expenses 1,952 4,106 5,046 12,585 Total costs and expenses 55,995 102,874 267,097 345,807 Operating income (loss) 105,469 (62,456 ) 22,314 (113,435 ) OTHER INCOME (EXPENSE) Interest expense (23,469 ) (13,971 ) (93,693 ) (54,422 ) Gain on early extinguishment of long-term debt — — 3,967 — Loss on change in fair value of common stock warrants (75,024 ) — (229,980 ) — Gain (loss) on commodity derivatives (6,292 ) 2,088 (20,289 ) 12,519 Impairment of investment and other 1,035 (304 ) (4,797 ) 2,003 Total other income (expense) (103,750 ) (12,187 ) (344,792 ) (39,900 ) Income (loss) before income taxes 1,719 (74,643 ) (322,478 ) (153,335 ) Income tax (expense) benefit (28,896 ) 27,434 30,327 55,139 NET LOSS $ (27,177 ) $ (47,209 ) $ (292,151 ) $ (98,196 ) Net loss per common share: Basic $ (1.54 ) $ (3.88 ) $ (20.87 ) $ (8.07 ) Diluted $ (1.54 ) $ (3.88 ) $ (20.87 ) $ (8.07 ) Weighted average common shares outstanding: Basic 17,608 12,170 14,000 12,170 Diluted 17,608 12,170 14,000 12,170 CLAYTON WILLIAMS ENERGY, INC. CONSOLIDATED BALANCE SHEETS (In thousands) ASSETS December 31, December 31, 2016 2015 CURRENT ASSETS (Unaudited) Cash and cash equivalents $ 573,025 $ 7,780 Accounts receivable: Oil and gas sales 18,752 16,660 Joint interest and other, net 4,148 3,661 Affiliates 258 260 Inventory 25,781 31,455 Deferred income taxes 6,520 6,526 Prepaids and other 2,702 2,463 631,186 68,805 PROPERTY AND EQUIPMENT Oil and gas properties, successful efforts method 1,717,209 2,585,502 Pipelines and other midstream facilities 63,228 60,120 Contract drilling equipment 118,256 123,876 Other 20,822 19,371 1,919,515 2,788,869 Less accumulated depreciation, depletion and amortization (1,063,379 ) (1,587,585 ) Property and equipment, net 856,136 1,201,284 OTHER ASSETS Investments and other 7,317 17,331 $ 1,494,639 $ 1,287,420 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable: Trade $ 44,809 $ 29,197 Oil and gas sales 20,862 19,490 Affiliates 252 383 Fair value of commodity derivatives 12,895 — Accrued liabilities and other 27,948 16,669 106,766 65,739 NON-CURRENT LIABILITIES Long-term debt 847,995 742,410 Fair value of common stock warrants 246,743 — Deferred income taxes 76,590 108,996 Asset retirement obligations 47,223 48,728 Accrued compensation under non-equity award plans 4,655 16,254 Deferred revenue from volumetric production payment and other 4,136 5,695 1,227,342 922,083 SHAREHOLDERS’ EQUITY Preferred stock, par value $.10 per share — — Common stock, par value $.10 per share 1,763 1,216 Additional paid-in capital 305,223 152,686 Retained earnings (accumulated deficit) (146,455 ) 145,696 Total shareholders' equity 160,531 299,598 $ 1,494,639 $ 1,287,420 CLAYTON WILLIAMS ENERGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)Three Months EndedDecember 31,
Year EndedDecember 31,
2016 2015 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (27,177 ) $ (47,209 ) $ (292,151 ) $ (98,196 ) Adjustments to reconcile net loss to cash provided by (used in) operating activities: Depreciation, depletion and amortization 30,474 40,626 145,614 162,262 Impairment of property and equipment 4,155 36,297 7,593 41,917 Abandonments and impairments 29 1,504 3,536 6,509 (Gain) loss on sales of assets and impairment of inventory, net (110,848 ) 3,853 (118,786 ) 3,018 Deferred income tax expense (benefit) 26,823 (27,513 ) (32,400 ) (55,218 ) Non-cash employee compensation (13,264 ) (7,079 ) (6,019 ) (2,674 ) (Gain) loss on commodity derivatives 6,292 (2,088 ) 20,289 (12,519 ) Cash settlements of commodity derivatives (5,023 ) 7,934 (7,394 ) 12,519 Loss on change in fair value of common stock warrants 75,024 — 229,980 — Accretion of asset retirement obligations 1,004 1,009 4,364 3,945 Amortization of debt issue costs and original issue discount 1,589 1,005 7,106 3,246 Gain on early extinguishment of long-term debt — — (3,967 ) — Paid in-kind interest expense — — 27,196 — Amortization of deferred revenue from volumetric production payment (413 ) (1,641 ) (1,479 ) (6,822 ) Impairment of investment and other 221 873 8,751 1,542 Changes in operating working capital: Accounts receivable (1,679 ) 5,510 (2,577 ) 30,817 Accounts payable 12,359 (3,803 ) 10,657 (35,860 ) Other 3,195 (12,115 ) 10,414 (2,327 ) Net cash provided by (used in) operating activities 2,761 (2,837 ) 10,727 52,159 CASH FLOWS FROM INVESTING ACTIVITIES Additions to property and equipment (49,210 ) (24,147 ) (111,541 ) (179,827 ) Termination of volumetric production payment — — — (13,703 ) Net redemption of short-term investments 40,041 — — — Proceeds from sales of assets 396,536 23,976 423,905 71,460 (Increase) decrease in equipment inventory (138 ) 603 1,414 1,733 Proceeds from volumetric production payment and other 138 1,443 (551 ) 2,942 Net cash provided by (used in) investing activities 387,367 1,875 313,227 (117,395 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term debt — — 343,237 45,000 Net repayments of Senior Notes — — (95,001 ) — Repayments of long-term debt — — (160,000 ) — Payment of debt issuance costs (90 ) — (11,048 ) — Proceeds from sale of common stock (6 ) — 147,340 — Proceeds from issuance of common stock warrants — — 16,763 — Net cash provided by (used in) financing activities (96 ) — 241,291 45,000 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 390,032 (962 ) 565,245 (20,236 ) CASH AND CASH EQUIVALENTS Beginning of period 182,993 8,742 7,780 28,016 End of period $ 573,025 $ 7,780 $ 573,025 $ 7,780CLAYTON 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 Year Ended December 31, December 31, 2016 2015 2016 2015 Net loss $ (27,177 ) $ (47,209 ) $ (292,151 ) $ (98,196 ) (Gain) loss on commodity derivatives 6,292 (2,088 ) 20,289 (12,519 ) Cash settlements of commodity derivatives (5,023 ) 7,934 (7,394 ) 12,519 Loss on change in fair value of common stock warrants 75,024 — 229,980 — Abandonments and impairments 29 1,504 3,536 6,509 Impairment of property and equipment 4,155 36,297 7,593 41,917 Net (gain) loss on sales of assets and impairment of inventory (110,848 ) 3,853 (118,786 ) 3,018 Gain on early extinguishment of long-term debt — — (3,967 ) — Amortization of deferred revenue from volumetric production payment (413 ) (1,641 ) (1,479 ) (6,822 ) Non-cash employee compensation (13,264 ) (7,079 ) (6,019 ) (2,674 ) Impairment of investment and other 221 873 8,751 1,542 Tax impact (a) 44,807 (14,592 ) 31,972 (15,656 ) Adjusted net loss $ (26,197 ) $ (22,148 ) $ (127,675 ) $ (70,362 ) Adjusted earnings per share: Diluted $ (1.49 ) $ (1.82 ) $ (9.12 ) $ (5.78 ) Weighted average common shares outstanding: Diluted 17,608 12,170 14,000 12,170 Effective tax rates 37.7 % 36.8 % 32.8 % 36.0 %______
(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 Year Ended December 31, December 31, 2016 2015 2016 2015 Net loss $ (27,177 ) $ (47,209 ) $ (292,151 ) $ (98,196 ) Interest expense 23,469 13,971 93,693 54,422 Income tax expense (benefit) 28,896 (27,434 ) (30,327 ) (55,139 ) Exploration: Abandonments and impairments 29 1,504 3,536 6,509 Seismic and other 504 108 925 1,318 Net (gain) loss on sales of assets and impairment of inventory (110,848 ) 3,853 (118,786 ) 3,018 Gain on early extinguishment of long-term debt — — (3,967 ) — Depreciation, depletion and amortization 30,474 40,626 145,614 162,262 Impairment of property and equipment 4,155 36,297 7,593 41,917 Accretion of asset retirement obligations 1,004 1,009 4,364 3,945 Amortization of deferred revenue from volumetric production payment (413 ) (1,641 ) (1,479 ) (6,822 ) Non-cash employee compensation (13,264 ) (7,079 ) (6,019 ) (2,674 ) (Gain) loss on commodity derivatives 6,292 (2,088 ) 20,289 (12,519 ) Cash settlements of commodity derivatives (5,023 ) 7,934 (7,394 ) 12,519 Loss on change in fair value of common stock warrants 75,024 — 229,980 — Impairment of investment and other 221 873 8,751 1,542 EBITDAX (a) $ 13,343 $ 20,724 $ 54,622 $ 112,102 The following table reconciles net cash provided by (used in) operating activities to EBITDAX: Net cash provided by (used in) operating activities $ 2,761 $ (2,837 ) $ 10,727 $ 52,159 Changes in operating working capital (13,875 ) 10,408 (18,494 ) 7,370 Seismic and other 504 108 925 1,318 Current income tax provision 2,073 79 2,073 79 Cash interest expense 21,880 12,966 59,391 51,176 EBITDAX (a) $ 13,343 $ 20,724 $ 54,622 $ 112,102______
(a) In December 2016, the Company sold substantially all of its assets in the Giddings Area in East Central Texas. Revenue, net of direct expenses, associated with the sold properties was $8.1 million during the three months ended December 31, 2016, $8.7 million during the three months ended December 31 2015, $30.3 million for the year ended December 31, 2016 and $66.2 million for the year ended December 31, 2015. CLAYTON WILLIAMS ENERGY, INC. SUMMARY PRODUCTION AND PRICE DATA (Unaudited)Three Months EndedDecember 31,
Year EndedDecember 31,
2016 2015 2016 2015 Oil and Gas Production Data: Oil (MBbls) 916 927 3,623 4,257 Gas (MMcf) 1,137 1,340 4,893 5,798 Natural gas liquids (MBbls) 131 132 558 550 Total (MBOE)(a) 1,237 1,282 4,997 5,773 Total (BOE/d) 13,441 13,939 13,652 15,818 Average Realized Prices (b) (c): Oil ($/Bbl) $ 44.87 $ 36.91 $ 38.58 $ 44.76 Gas ($/Mcf) $ 2.70 $ 2.09 $ 2.31 $ 2.52 Natural gas liquids ($/Bbl) $ 16.72 $ 13.00 $ 13.26 $ 13.07 Gain (Loss) on Settled Commodity Derivative Contracts (c): ($ in thousands, except per unit) Oil: Cash settlements received (paid) $ (5,023 ) $ 7,934 $ (7,394 ) $ 12,519 Per unit produced ($/Bbl) $ (5.48 ) $ 8.56 $ (2.04 ) $ 2.94 Average Daily Production (d): Oil (Bbls): Permian Basin Area: Delaware Basin 4,091 3,026 3,395 3,426 Other 2,651 2,762 2,808 2,882 Austin Chalk 1,594 1,663 1,677 1,828 Eagle Ford Shale 1,365 2,347 1,632 3,037 Other 256 278 387 490 Total 9,957 10,076 9,899 11,663 Natural Gas (Mcf): Permian Basin Area: Delaware Basin 2,482 3,206 2,629 3,078 Other 5,551 5,648 5,689 5,873 Austin Chalk 1,724 1,687 1,706 1,725 Eagle Ford Shale 273 444 322 516 Other 2,329 3,580 3,023 4,693 Total 12,359 14,565 13,369 15,885 Natural Gas Liquids (Bbls): Permian Basin Area: Delaware Basin 367 386 435 409 Other 715 742 750 770 Austin Chalk 175 162 182 168 Eagle Ford Shale 66 113 80 123 Other 101 32 78 37 Total 1,424 1,435 1,525 1,507 BOE/d: Permian Basin Area: Delaware Basin 4,872 3,946 4,268 4,348 Other (e) 4,291 4,446 4,506 4,631 Austin Chalk (f) 2,056 2,106 2,143 2,284 Eagle Ford Shale(f) 1,477 2,534 1,766 3,246 Other (g) 745 907 969 1,309 Total 13,441 13,939 13,652 15,818 Oil and Gas Costs ($/BOE Produced): Production costs $ 13.55 $ 15.89 $ 14.19 $ 15.17 Production costs (excluding production taxes) $ 11.71 $ 14.07 $ 12.68 $ 13.23 Oil and gas depletion $ 21.89 $ 28.83 $ 26.21 $ 25.54______
(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 December 31, 2016, $0.3 million for the three months ended December 31, 2015, $1.5 million for the year ended December 31, 2016 and $4.5 million for the year ended December 31, 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 53,026 barrels of oil and 35,735 Mcf of gas for the year ended December 31, 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 none for the three months ended December 31, 2016, 57 total BOE/d for the three months ended December 31, 2015, 49 total BOE/d for the year ended December 31, 2016 and 104 total BOE/d for the year ended December 31, 2015. (f) The average daily production related to assets in the Giddings Area in East Central Texas sold in December 2016 was 3,681 total BOE/d for the three months ended December 31, 2016, 5,104 total BOE/d for the three months ended December 31, 2015, 4,145 total BOE/d for the year ended December 31, 2016 and 5,977 total BOE/d for the year ended December 31, 2015. (g) The average daily production related to selected leases and wells in South Louisiana sold in September 2015 was 390 total BOE/d for the year ended December 31, 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 December 31, 2016. Settlement prices of commodity derivatives are based on NYMEX futures prices.
Swaps:
Oil MBbls Price Production Period: 1st Quarter 2017 178 $ 44.85 2nd Quarter 2017 165 $ 44.65 3rd Quarter 2017 37 $ 50.00 4th Quarter 2017 27 $ 50.00 407Costless Collars:
Oil Weighted Weighted Average Average MBbls Floor Price Ceiling Price Production Period: 1st Quarter 2017 355 $ 42.26 $ 51.67 2nd Quarter 2017 354 $ 42.27 $ 51.67 3rd Quarter 2017 356 $ 42.27 $ 51.65 4th Quarter 2017 350 $ 42.27 $ 51.66 1,415CLAYTON WILLIAMS ENERGY, INC.
PROVED RESERVES
(Unaudited)
The following table sets forth the Company’s estimated quantities of proved reserves as of December 31, 2016 and 2015, all of which are located in the United States.
Proved Reserves Reserve CategoryOil(MBbls)
Natural GasLiquids (MBbls)
Natural Gas(MMcf)
Total OilEquivalents (a)(MBOE)
December 31, 2016 Developed 14,540 3,335 24,620 21,978 Undeveloped 9,807 1,476 8,957 12,776 Total Proved 24,347 4,811 33,577 34,754 December 31, 2015 Developed 25,349 4,266 39,987 36,280 Undeveloped 7,727 1,202 8,160 10,289 Total Proved 33,076 5,468 48,147 46,569 ______ (a) Natural gas reserves have been converted to oil equivalents at the rate of six Mcf to one barrel of oil.PV-10 totaled $204.4 million at December 31, 2016 versus $442.8 million at December 31, 2015. Commodity prices used at December 31, 2016 and 2015 were based on the 12-month weighted average of the first-day-of-the-month prices from January through December of the respective years and averaged $42.75 per barrel of oil and $2.49 per MMBtu of natural gas for 2016 and $50.28 per barrel of oil and $2.58 per MMBtu for 2015. These benchmark prices were further adjusted for quality, energy content, transportation fees and other price differentials specific to the Company’s properties, resulting in average adjusted commodity prices of $36.60 per barrel of oil, $13.60 per barrel of NGL and $2.36 per Mcf of natural gas for 2016 and $45.75 per barrel of oil, $15.84 per barrel of NGL and $2.52 per Mcf of natural gas for 2015.
PV-10 is a non-GAAP financial measure that the Company believes is useful as a supplemental disclosure to the standardized measure of discounted future net cash flows, a GAAP financial measure. While the standardized measure of discounted future net cash flows is dependent on the unique tax situation of each entity, PV-10 is based on prices and discount factors that are consistent for all entities and can be used within the industry and by securities analysts to evaluate proved reserves on a more comparable basis. The following table reconciles PV-10 to the standardized measure of discounted future net cash flows.
As of December 31, 2016 2015 (In thousands) PV-10, a non-GAAP financial measure $ 204,385 $ 442,775 Less present value, discounted at 10% of: Estimated asset retirement obligations (37,764 ) (35,406 ) Estimated future income taxes (7,658 ) (16,726 ) Standardized measure of discounted future net cash flows, a GAAP financial measure $ 158,963 $ 390,643
View source version on businesswire.com: http://www.businesswire.com/news/home/20170302006463/en/
Clayton Williams Energy, Inc.Patti Hollums, 432-688-3419Director of Investor Relationscwei@claytonwilliams.comwww.claytonwilliams.comorJaime R. Casas, 432-688-3224Chief Financial Officer
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