The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Business Wire

Clayton Williams Energy, Inc. Provides Operations Update

Thursday, July 28, 2011

Clayton Williams Energy, Inc. Provides Operations Update07:55 EDT Thursday, July 28, 2011 MIDLAND, Texas (Business Wire) -- Clayton Williams Energy, Inc. (the “Company”) (NASDAQ:CWEI) today provided an operations update on its drilling activities, by area: Wolfbone Oil Play (Reeves County, Texas) The Company is in the early stages of a major oil play in Reeves County targeting the Bone Springs and Wolfcamp formations (Wolfbone). The Company has leased 20,000 acres and will add significantly more acreage through a drill to earn farm-out agreement with Chesapeake Exploration. CWEI earns a 75% interest in 640 net acres for each well that it carries Chesapeake to the tanks for a quarter interest. The Company is making significant front-end investments in this play: to acquire the acreage, the Chesapeake Carry, and to build pipelines and other infrastructure. The amount and timing of these investments will depend on drilling results. Drilling and completion operations have begun on 13 wells. We are currently running seven rigs in Reeves County and plan to increase the rig count to 11 rigs in the near future. “Early indications are encouraging,” stated Clayton W. Williams, Jr., President and Chief Executive Officer of the Company, “but we need more production data. We are accelerating drilling operations to meet the Chesapeake agreement and to further evaluate our acreage.” Wolfberry Oil Play (Andrews County, Texas) To date, the Company has drilled 154 Wolfberry wells in Andrews County, 128 on 80-acre spacing and 26 on 40-acre spacing. The Company has an inventory of approximately 80 80-acre locations and 180 40-acre locations for future development drilling. The Company currently has three rigs running in Andrews County, but plans to reduce the rig count to one rig in the near future. During the second quarter of 2011, the Company produced approximately 2,800 barrels of oil and natural gas liquids per day and 1,250 Mcf of natural gas per day from this area, as compared to 1,600 barrels and 400 Mcf per day during the second quarter of 2010. Deep Bossier Trend The Company has begun drilling the Hamill Foundation #1, an 18,000-foot exploratory well in Leon County, Texas. This well targets a Deep Bossier sand that is offsetting and updip to the Company's Big Bill Simpson #1. The well is expected to cost approximately $10 million to drill to casing point. 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.Patti Hollums, Director of Investor Relations, 432-688-3419cwei@claytonwilliams.comwww.claytonwilliams.comorMichael L. Pollard, Chief Financial Officer, 432-688-3029