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: Buzz Mills who wrote (68)	11/24/1996 5:24:00 PM
From: Kendell Phillips	of 1017

All of the eps data looks excellent. And I believe CWEI will have a good 4th quarter. EPS can deviate a bit based on capital expenditurest, however the current investments CWEI is making in its future will mean more to the futrure stock price than a dime or so on the eps for the quarter. I believe CWEI stock price will continure to advance due to discovery by more money managers and investors because it is fundamentally undervalued(P/E around 10 compared to P/E 27 of industry average). Getting to an industry average P/E along with consistentt EPS quarters will result in $35 - $40/share. If CWEI did not make one penny in the 4th quarter (which is not a possibility) the Stock could appreciate on industry average to .96 x 27 = $26 a share I would like to inform everyone that has not checked the quarterlys lately why CWEI is undervalued and selling at a huge discount. From the 3rd quarter 94 CWEI had negative eps for 6 quarter in a row(the 3rd quarter 95 was negative after the adjustment for one time gains due to selling equipment). I believe the company was on the brink of bankruptcy due to depressed oil prices in late 80s ($15/bbl). Once the reorginization 4Q 95 took affect, CWEI became profitable again which proves sound management and business practices. And the key was the 1q96 profit was accomplished when oil was selling for approx. $19/BBl. The excess in oil prices since then has allowed CWEI to pay down debt and invest(starting this quarter) in very high potential payoff exploration (Cotton Valley Pinnacle Reef). Cash flow is improving also. With 4Q positive eps(which will be the case after 4Q96) CWEI will receive more attention from major investment publications and show up on low P/E scans. The potential for this stock to double or maybe triple in the next few months is LARGE!

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