Steve,
You are right Steve. Mr. Williams is very high on CWEI. As you said, he has to believe in it fully to give those shares as gifts to friends and family.
Lajuanda Holder, Director of CWEI Investor Relations, when asked if CWEI would consider a buyout offer responded, "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."
CWEI has existing 2-D seismic surveys of the Cotton Valley formation and they had to have seen something that leads them to believe very strongly in the existence of pinnacle reef wells in the North Giddings Block.
I too believed that CWEI was going to take a breather at this point, prior to its next big move which will break the 20 barrier. There should be very little resistance between here and 20. I think most of the sellers that were going to sell, have already sold, and it should be clear sailing.
Looking out beyond the 1996 earnings report in early March, which we know is going to be outstanding, Hanifen's has estimated that CWEI will earn 0.44 in the 1997 first quarter. That can be compared to 0.19 earned in the 1996 first quarter. If CWEI meets that number that will keep CWEI pointed upwards in price. In the 0.44 estimate, Hanifen priced crude at $20.00 per barrel, and natural gas at $2.80. For at least the first two weeks of the year the average for crude is close to $26.00 per barrel, and natural gas should be at least $3.50--so we are running on a very strong positive towards meeting those estimates. Another factor is: being that the 3-D seismic survey has not yet started, (the crew is finishing up another project elsewwhere), that may mean that the entire $3.1M charge won't go against the 1997 first quarter--which again would help the earnings. As I see it right now, in early May CWEI will again come out with a very good earnings report for the first quarter of 1997. CWEI continues to be very positive. |
