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Gold/Mining/Energy : Clayton Williams Energy (CWEI) OIL
CWEI 131.900.0%Apr 25 5:00 PM EST
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To: Craig Gantner who wrote (227)12/26/1996 11:30:00 AM
From: Kendell Phillips   of 1017
 
Craig,

Excellent question. I would like to add one comment to Buzz's response. CWEI set 6500/bbls a day as a goal early this year. They have fallen shy every quarter, but came darn close. CWEI's business startegy is not to maintain but rather grow aggressively. Around the middle of December CWEI planned on adding another drilling rig capable 12,500 ft with 4.5" pipe. This is a 50% increase in drilling capability. They were drilling an average of 2 wells per month, now they can drill 3. From all the info I have, CWEI will be able to maintain and increase productioin in the current Austin Chalk area until they move into COtton Valley Pinnacle Reefs. I expect to see higher production numbers in the future. If not for the 4th quarter then for the 1st quarter 97. For the 4th quarter I will be extremely happy with maintaining production numbers from the 3rd quarter since the spot prices are up over 20% from the 3q prices CWEI received for crude. Natural gas is up over 50% from 3q prices. A rough breakdown is 1/3 revenues from gas, 2/3 from crude oil. Check the 3rd q earnings for exact breakdown.
One other point, we beleive CWEI is relatively undiscovered by Wall Street investors. This is evident by the fundamentals versus the stock price. Maintaining production could still result in significant stock price appreciation in 97.
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