Gary,
Thanks for your reponse and your enthusiasm is appreciated. Your guess as to what CWEI's earnings and price may be as of February 1, 1996, is very optimistic, and it could happen, but rather than begin something that could verge on wild speculation, then turns into hype, it would be better if we used the information available and performed analysis to calculate what CWEI's earnings may be. Using actuals, and posting calculations, lends credence to the results obtained. Using $23/barrel for oil, $2.70 for gas, and the same expenses as the last quarter, I came up with a number over 0.50. However, Kendell just came up with additional information that the third drilling rig is going to begin operating in December and that creates additional expense. Prior to Kendell's information, it was my belief after reading the third quarter SEC filings, that the start date for the third rig was in January. I just went back to the final third quarter filing and found the paragraph: "The Company's capital expenditures are expected to be approximately $33 million in 1996, of which $25 million was incurred in the first nine months of 1996. In response to favorable oil prices and drilling results, the Company intends to accelerate its drilling program by contracting for a third
drilling rig beginning in December 1996." CWEI appears, based on the news release regarding the 3-D seismic shoot, to be moving their schedules up and that means additional costs may be incurred in the fourth quarter. We do know the numbers will be good, we do know the price of oil remains high and that gas has gone through the roof, and we do know that Hanifen has released (but not to Zack's or First Call) an estimate of 0.42 EPS and $1.17 CFPS for the fourth quarter, and that in every other quarter of this year CWEI has beaten the Hanifen estimate by at least 25% (0.45 actual vs 0.36 estimated in the third quarter). But anyway, after all is said and done, in CWEI we have a company who's earnings for the year will be outstanding relative to their current stock prices, especially given the price of oil and gas, and it is only a matter of the information on their "value" getting out into the financial world. That will happen in time.
Buzz |
