Quarterly / Earnings Reports | Debt | Second Quarter (2Q) Update | Financial Results | Capital Markets | Drilling Program | Private Equity Activity

Clayton Williams Resumes Drilling in July

Share Print Bookmark    |    Friday,August 07,2015

Clayton Williams Energy, Inc. has reported its financial results for the second quarter 2015.

Summary

• Oil and gas production of 16.6 MBOE/d
• The downturn in commodity prices continues to have a significant impact on our business and results of operations. We suspended drilling operations in our core resource plays early in 2015 until well costs could adjust to a lower commodity price environment. 
• We resumed drilling activities in July 2015 with one rig in the Delaware Basin and one rig in the Eagle Ford.
• Oil and gas sales for 2Q15, excluding amortized deferred revenues, decreased $44.4 million compared to 2Q14. Price variances accounted for a $53.9 million decrease and production variances accounted for a $9.5 million increase. Average realized oil prices were $53.32 per barrel in 2Q15 versus $96.01 per barrel in 2Q14, average realized gas prices were $2.58 per Mcf in 2Q15 versus $4.49 per Mcf in 2Q14, and average realized natural gas liquids (NGL) prices were $15.30 per barrel in 2Q15 versus $31.55 per barrel in 2Q14. Oil and gas sales in 2Q15 also includes $1.7 million of amortized deferred revenue compared to $1.9 million in 2Q14 attributable to a volumetric production payment (VPP). Reported production and related average realized sales prices exclude volumes associated with the VPP.
• Oil, gas and NGL production per barrel of oil equivalent (BOE) increased 7% in 2Q15 as compared to 2Q14, with oil production increasing 8% to 12,363 barrels per day, gas production increasing 6% to 16,066 Mcf per day, and NGL production decreasing 1% to 1,560 barrels per day. Oil and NGL production accounted for approximately 84% of the Company’s total BOE production in 2Q15 and 2Q14.
• Production costs in 2Q15 were $23.1 million versus $24.6 million in 2Q14 due primarily to lower production taxes associated with a decrease in oil and gas sales. Production costs on a BOE basis, excluding production taxes, decreased 3% to $13.02 per BOE in 2Q15 versus $13.41 per BOE in 2Q14.
• Loss on derivatives for 2Q15 was $12.3 million (including a $1.8 million loss on settled contracts) versus a loss on derivatives in 2Q14 of $8.3 million (including a $3.5 million loss on settled contracts). See accompanying tables for additional information about the Company’s accounting for derivatives.

Balance Sheet and Liquidity

• As of June 30, 2015, total long-term debt was $746.7 million, consisting of $147 million of secured debt under a revolving credit facility and $599.7 million of 7.75% Senior Notes due 2019. The borrowing base established by the banks under the credit facility and the aggregate lender commitment was $500 million at June 30, 2015. Liquidity, consisting of cash plus funds available on the bank credit facility, totaled $358.7 million. 
• The Company’s liquidity position was supplemented during the quarter by the previously reported sale of 3,700 net acres in Burleson County, Texas for $22.1 million.