Clayton Williams Energy (CWEI) OIL Message Board

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Gold/Mining/Energy : Clayton Williams Energy (CWEI) OIL

CWEI 131.90

0.0%

Apr 25 5:00 PM EST

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To: Christiaan McDonald who wrote (814)	8/9/1997 11:26:00 AM
From: Buzz Mills	of 1017

It depends on what geological formation a company is drilling in as to whether they produce oil or gas. In CWEI's case they are drilling mostly in the shallow Austin Chalk which produces almost completely oil. Other formations at varying depths in Texas include the Georgetown, Buda, and Pinnacle reef. CWEI's biggest exploration play presently is in the North Giddings Block (where coincidentally they also currrently drill the shallow Austin Chalk 4500-7000 feet); they are 85% complete with a 3D seismic survey in search of pinnacle reef formations (pinnacle reef formations are at 14000-19000 feet). The preparation for the search for pinnacle reef wells started in the middle of 1996 and included a secondary offering in Nov. 1996--the 3-D began late Feb. of this year. Pinnacle reef wells are very expensive and high risk to drill but they can be very prodigious ---one good pinnacle reef well could double the size of CWEI. Regarding the deficit on gas--from all the articles I have read it appears the price of gas will continue to increase dramatically-- pre-winter storage this year is far behind where it was last year at this time.

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