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: Gary Faykes who wrote (66)	11/23/1996 9:34:00 PM
From: Buzz Mills	of 1017

Finally figured out how CWEI was able to get such high oil and natural gas prices versus the graphs out of the Investors Business Daily I was looking at, and I think the numbers that Kendell provided. CWEI deals with the spot price of oil and natural gas and we were getting our numbers from futures prices which are 0.30 to 0.40 lower than the spot price. Even so, using the graphs out of the IBD, if I take an average, on oil CWEI gets just a little better than the average I come up with so I can still use it for a good estimate. On gas CWEI does get a premium and so the price they get is well above the average I come up with. Found it very hard to resist playing with the numbers but I calculated that CWEI has received an average of $24/barrel for oil sold so far in the quarter and calculated they have received an adjusted average of $3.10 for their natural gas so far in the quarter (the average for natural gas should increase substantially). Using the same production figures as the third quarter and I multiplied the differences in price and added that to the bottom line. Then I subtracted out $1.2M as an expense for the third drilling rig operating in December (they state that it costs $950K to drill a well and they drill one well/rig/month + $250K for added expense). I then divided that by 8.3M shares which should be the weighted average number of shares for the quarter. The number I came up with was 0.53 to which I added 0.02 for the reduced interest expense; they were going to use the $15M from the the stock offering to pay down debt. The end result is 0.55 for the quarter. That number could be adversely affected by the price of oil, production, unknown expenses and should be positively affected by the price of natural gas for the remainder of the quarter. What it really tells me is I am very glad I own this stock.

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