MIDLAND, Texas--(BUSINESS WIRE)--
Clayton Williams Energy, Inc. (the “Company”) (CWEI) today provided insight on its plans for 2015 and an update on its Eagle Ford and Delaware Basin operations.
Plans for 2015
The Company announced today that its strategy for 2015 is to preserve the Company’s ability to resume long term production growth once crude oil prices recover. In the current low price environment, the Company has little incentive to accelerate oil production by continuing with non-essential drilling operations. The Company has suspended drilling operations in both of its core resource plays until the combination of higher oil prices and lower drilling and completion costs provides the Company with an acceptable profit margin. The Company has also implemented measures to reduce overhead and trim field level operating costs. Assuming drilling operations remain substantially suspended for the remainder of 2015, the Company expects combined oil and gas production for fiscal 2015 to average between 14,200 and 14,600 BOE per day, representing an 8% to 10% decline from fiscal 2014, and capital expenditures will total approximately $107.4 million for fiscal 2015, down 73% from fiscal 2014 expenditures of $404.3 million. Most of the estimated 2015 capital expenditures relate to drilling activities in progress at the end of 2014 and to lease renewals and extensions throughout the year.
Delaware Basin Operations
The Company has 20 horizontal Wolfcamp A wells in Reeves County, Texas that have been on production for 30 or more days. The peak 30-day production for these wells has averaged 760 BOE per day (79% oil; 10% NGL). Three additional Wolfcamp A wells have been on production for less than 30 days, and two Wolfcamp A wells have been drilled but are yet to be completed.
Additionally, the Company has three Wolfcamp C horizontal wells in Reeves County that have been on production for 30 or more days. The peak 30-day production for these wells has averaged 765 BOE per day (78% oil; 11% NGL). One additional Wolfcamp C well has been drilled but is yet to be completed.
The Company also reported the termination of a previously announced farmout and exploration agreement with Caza Oil and Gas, Inc. (“Caza”) covering approximately 15,000 net undeveloped acres located along the western flank of the Company’s acreage block in Reeves County, Texas. The agreement was terminated due to Caza’s failure to commence drilling operations on the initial horizontal Wolfcamp well as required under the agreement. As a result, all of the farmout acreage will be retained by the Company.
Eagle Ford Operations
On its Eagle Ford play in Burleson, Robertson and Lee Counties, Texas, the Company currently has 33 horizontal wells that have been on production for 30 or more days. The peak 30-day production rate for these wells has averaged 492 BOE per day (96% oil). Five additional wells have been on production for less than 30 days.
As previously announced the Company is currently testing sequential fracturing operations and increased well densities in Burleson County. During the fourth quarter of 2014, the Company sequentially fractured three adjacent wells on the Marsh 129 lease that were drilled on 660-foot spacing, and another group of three adjacent wells on the Marshall 140 lease that were drilled on 990-foot spacing. The Company continues to evaluate the relative performance of each test as compared to direct offset single well completions. The results of these tests, which are expected to take 6-12 months, will be used to better optimize oil recovery and total project economics for future development of the field.
Clayton Williams Energy, Inc. is an independent energy company located in Midland, Texas.
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical or current facts, that address activities, events, outcomes and other matters that we plan, expect, intend, assume, believe, budget, predict, forecast, project, estimate or anticipate (and other similar expressions) will, should or may occur in the future are forward-looking statements. These forward-looking statements are based on management's current belief, based on currently available information, as to the outcome and timing of future events. The Company cautions that its future natural gas and liquids production, revenues, cash flows, liquidity, plans for future operations, expenses, outlook for oil and natural gas prices, timing of capital expenditures and other forward-looking statements are subject to all of the risks and uncertainties, many of which are beyond our control, incident to the exploration for and development, production and marketing of oil and gas.
These risks include, but are not limited to, the possibility of unsuccessful exploration and development drilling activities, our ability to replace and sustain production, commodity price volatility, domestic and worldwide economic conditions, the availability of capital on economic terms to fund our capital expenditures and acquisitions, our level of indebtedness, the impact of the current economic recession on our business operations, financial condition and ability to raise capital, declines in the value of our oil and gas properties resulting in a decrease in our borrowing base under our credit facility and impairments, the ability of financial counterparties to perform or fulfill their obligations under existing agreements, the uncertainty inherent in estimating proved oil and gas reserves and in projecting future rates of production and timing of development expenditures, drilling and other operating risks, lack of availability of goods and services, regulatory and environmental risks associated with drilling and production activities, the adverse effects of changes in applicable tax, environmental and other regulatory legislation, and other risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements.