Miller,
Yes. your post did sound a little negative but that is the reality of the oil industry; there is always a chance of running into a problematic hole, or even a string of dry holes. If any of this was a sure thing there wouldn't be a stock market and we wouldn't be "betting" large sums of money on our horse coming in. Another game of chance but I like the odds assigned to CWEI; very strong fundamentals going in and a large piece of property to work with that has a very good chance of being "on-trend" with the pinnacle reef play. I agree with you that CWEI wouldn't be bringing in the 3rd rig to drill on the Austin Chalk if they didn't think they had more oil to recover there. I think what I meant to say about production was that it isn't the same quarter-to-quarter, and there are other factors involved there. In the second quarter of 1996 CWEI posted higher numbers than in the 1996 first quarter; the second quarter had very high numbers. The third quarter numbers were what might be considered an average of the two preceding quarters. We are all curious as to what the fourth quarter production numbers are; if they are at least equal to the third quarter numbers, then CWEI will have a really great quarter based on Kendell's estimates using those numbers. Lesser production numbers would still provide a great quarter for CWEI, while higher production numbers would provide what we all dream about, a blowout. I think those scenarios provide earnings in the 0.60 to 0.80 range, all beating the street estimate of 0.57. Based on the fundamentals in place now CWEI should continue increasing in price.
Craig, the recent rapid falloff in gas prices is due to warmer weather predictions for the U.S., but yes the price of gas is very seasonal, with, of course, winter being the highest. If you check out the 1st URL in the Intro paragraph to this thread, I have the prices that CWEI received for natural gas in the first three quarters of this year and that should give you an idea of the variation in prices.
Buzz |
