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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: R L H odges who wrote (284)1/13/1997 10:52:00 PM
From: Buzz Mills   of 1017
 
R L : Info from CWEI:

I Emailed Lajuanda Holder, Director of CWEI Investor Relations, the following questions:

1) Does CWEI have a stock split price in mind at this time; i.e. is there a price at which CWEI would think about reducing the stock price by doing a 2 for 1 split.

2) At any time, would CWEI consider a buyout offer. (I believe I remember reading that CWEI has a "poison pill defense" in place to prevent hostile takeovers).

3) I would like to know when the 3-D survey commences, whenever that happens.

4) I noticed in the Hanifen and PW estimates that you sent me, they used $22.50 and $22.90 respectively, as the average per barrel price CWEI received for oil in the fourth quarter. I realize that CWEI discounts their oil relative to the Market Spot Price but the prices they used in their estimates seemed ridiculously low to me--I figured the number should be more like $23.75.

I received the following response from Lajuanda:

1) Management has no specific plan regarding a stock split or a specific price around which a split might occur. I will give them each a copy of your email questions.

2) At the time we did the IPO, Wall Street seem to have a poor opinion of poison pills so we didn't make such a provision. Also, Mr. Williams has owned over 50% of the shares outstanding from the beginning so an anti-takeover measure wouldn't be needed. I don't know if Management would consider a buy out offer or not. I would think not since Mr. Williams is really excited about the Cotton Valley potential. (Buzz's note: In the Secondary Offering Prospectus on Page 12 under "Certain Anti-Takeover Provisions" is states that the Directors have the ability to issue serial preferred stock without shareholders approval"--this is what I judged to be a poison pill defense --Incorporation is under Delaware General Corporation Law).

3) I will be glad to let you know when the 3-D shoot starts.

4) The Hanifen oil prices are a little conservative. We don't know the average price for 4th quarter and I couldn't say what the price was if I knew. Sorry!
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