Steve,
The 0.08 estimate by ABN AMRO (Paul Feretti) is for the second quarter of 1997, so we haven't gone from 0.77 to 0.08; ABN AMRO's estimate for the first quarter 1997 is 0.27; Hanifen's estimate is 0.51 for the first quarter 1997. The average price CWEI recived for oil during the 1996 fourth quarter when CWEI earned 0.77 was 23.81, and natural gas was $3.16. Oil is now at $20.75 per barrel and natural gas is at $1.92 (CWEI receives approx. 20% more for their natural gas than the stated price). For the first quarter 1997, based on my calculations, CWEI should receive for their oil and gas approximately the same amount they received in the third quarter 1996, $21.19 and $2.62, respectively; so the amount they earn in at least the first quarter, as compared to the fourth quarter, will be reduced accordingly. Secondly, over at least the first two quarters of 1997, and probably running into the third quarter, CWEI will be expensing the $4M cost of the 3-D seismic survey. I am guestimating they will write-off about $1.5M of the $4M cost of the survey in the first quarter. Keep in mind that CWEI now has three rigs drilling in the Austin Chalk, and during the first quarter we will see production from the third rig for two of those months, and from then on, in all three months of the quarters. Again, as stated in a prior post, ABN AMRO used $19.75 per barrel as the price of oil to do their estimates, and stated that for each $1.00 increase in oil, CWEI would see a $0.35 to $0.40 increase in earnings for the year. Hope this clarifies it for you.
CWEI does not have a working relationship with ABN AMRO; Rodman, Renshaw did, and does (they and Hanifen's were the Underwriters for the Secondary Offering). ABN AMRO did not have any clients in the stock.
Buzz |
