Clayton Williams Energy Announces Third Quarter 2015 Financial Results
Clayton Williams Energy Inc. (the “Company”) (NYSE:CWEI) today reported its financial results for the third quarter 2015.
Summary
- Oil and gas production of 15.6 MBOE/d
- Adjusted net loss1 (non-GAAP) of $14.9 million
- EBITDAX2 (non-GAAP) of $28.7 million
- Core drilling suspended pending improvement in oil prices
- Sold South Louisiana assets for $11.8 million in September 2015
- Terminated VPP covering 277 MBOE in August 2015 for $13.7 million
Financial Results for the Third Quarter of 2015
The Company reported a net loss for the third quarter of 2015 (“3Q15”) of $9.4 million, or $0.77 per share, as compared to net income of $27.4 million, or $2.25 per share, for the third quarter of 2014 (“3Q14”). Adjusted net loss1 (non-GAAP) for 3Q15 was $14.9 million, or $1.23 per share, as compared to adjusted net income1 (non-GAAP) of $17.4 million, or $1.43 per share, for 3Q14. Cash flow from operations for 3Q15 was $26.4 million as compared to $86.7 million for 3Q14. EBITDAX2 (non-GAAP) for 3Q15 was $28.7 million as compared to $78.1 million for 3Q14.
For the nine months ended September 30, 2015, net loss attributable to Company stockholders was $51 million, or $4.19 per share, as compared to net income of $48.1 million, or $3.96 per share, for the same period in 2014. Adjusted net loss1 (non-GAAP) for the nine-month period in 2015 was $48.5 million, or $3.99 per share, as compared to adjusted net income1 (non-GAAP) of $52.1 million, or $4.28 per share, for the same period in 2014. Cash flow from operations for the nine-month period in 2015 was $55 million as compared to $211.7 million during the same period in 2014. EBITDAX2 (non-GAAP) for the nine-month period in 2015 was $91.4 million as compared to $236.5 million for the same period in 2014.
The key factors affecting the comparability of financial results for 3Q15 versus 3Q14 were:
- The downturn in commodity prices continues to have a significant impact on our business and results of operations. After resuming limited drilling activities in July 2015, the Company drilled two Eagle Ford wells and one Wolfcamp A well before temporarily suspending drilling operations in September 2015 due to another decline in commodity prices.
- Oil and gas sales for 3Q15, excluding amortized deferred revenues, decreased $55 million compared to 3Q14. Price variances accounted for a $54.2 million decrease and production variances accounted for a $0.8 million decrease. Average realized oil prices were $43.26 per barrel in 3Q15 versus $90.73 per barrel in 3Q14, average realized gas prices were $2.71 per Mcf in 3Q15 versus $4.14 per Mcf in 3Q14, and average realized natural gas liquids (“NGL”) prices were $11.01 per barrel in 3Q15 versus $31.73 per barrel in 3Q14. Oil and gas sales in 3Q15 includes $0.8 million of amortized deferred revenue compared to $1.9 million in 3Q14 attributable to a volumetric production payment (“VPP”). In August 2015, the Company terminated the VPP covering 277 MBOE of oil and gas production from August 2015 through December 2019 for $13.7 million. Reported production and related average realized sales prices exclude volumes associated with the VPP through July 2015.
- Oil, gas and NGL production per barrel of oil equivalent (“BOE”) decreased less than 1% in 3Q15 as compared to 3Q14, with oil production decreasing 1% to 11,152 barrels per day, gas production increasing 6% to 17,283 Mcf per day, and NGL production decreasing 1% to 1,543 barrels per day. Oil and NGL production accounted for approximately 82% of the Company’s total BOE production in 3Q15 versus 83% in 3Q14. See accompanying tables for additional information about the Company’s oil and gas production.
- Production costs in 3Q15 were $20.7 million versus $25.9 million in 3Q14 due primarily to reductions in production taxes associated with a decrease in oil and gas sales. Production costs on a BOE basis, excluding production taxes, decreased 11% to $12.68 per BOE in 3Q15 versus $14.19 per BOE in 3Q14.
- Gain on derivatives for 3Q15 was $18.1 million (including a $6.4 million gain on settled contracts) versus a gain on derivatives in 3Q14 of $9.6 million (net of a $0.2 million loss on settled contracts). See accompanying tables for additional information about the Company’s accounting for derivatives.
- Lower commodity prices negatively impacted the Company’s results of operations due to asset impairments. The Company recorded an impairment of proved properties of $3.1 million related primarily to non-core prospects in the Permian Basin. Also, the Company recorded a charge to other operating expenses for a mark-to-market valuation of its tubular inventory.
- General and administrative expenses for 3Q15 were $4.6 million versus $0.8 million for 3Q14. Changes in compensation expense attributable to the Company’s APO reward plans accounted for a net increase of $3.7 million ($2 million credit in 3Q15 versus $5.7 million credit in 3Q14).
1 See “Computation of Adjusted Net Income (Loss) (non-GAAP)” below for an explanation of how the Company calculates and uses adjusted net income (loss) (non-GAAP) and for a reconciliation of net income (loss) (GAAP) to adjusted net income (loss) (non-GAAP).
2 See “Computation of EBITDAX (non-GAAP)” below for an explanation of how the Company calculates and uses EBITDAX (non-GAAP) and for a reconciliation of net income (loss) (GAAP) to EBITDAX (non-GAAP).
Balance Sheet and Liquidity
As of September 30, 2015, total long-term debt was $749.7 million, consisting of $150 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 September 30, 2015. The Company had $348.1 million of availability under the facility after allowing for outstanding letters of credit of $1.9 million. Liquidity, consisting of cash plus funds available on the bank credit facility, totaled $356.8 million.
Scheduled Conference Call
The Company will host a conference call to discuss these results and other forward-looking items Thursday, November 5th at 10:30 a.m. CT (11:30 a.m. ET).
A live webcast for investors and analysts will be available on the Company’s website at www.claytonwilliams.com under the “Investors” section. The webcast will be archived on the site for 30 days following the call.
Participants should call (877) 868-1835 and indicate 64931765 as the conference passcode. A replay will be available from 1:30 p.m. CT (2:30 p.m. ET) on November 5th until November 12th. To listen to the replay dial (855) 859-2056 and enter passcode 64931765.
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.
| CLAYTON WILLIAMS ENERGY, INC. | |||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| (In thousands, except per share) | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| REVENUES | |||||||||||||||||||||
| Oil and gas sales | $ | 51,307 | $ | 107,480 | $ | 178,539 | $ | 331,369 | |||||||||||||
| Midstream services | 1,500 | 1,883 | 4,714 | 5,336 | |||||||||||||||||
| Drilling rig services | — | 7,066 | 23 | 22,438 | |||||||||||||||||
| Other operating revenues | 1,774 | 2,854 | 8,678 | 14,640 | |||||||||||||||||
| Total revenues | 54,581 | 119,283 | 191,954 | 373,783 | |||||||||||||||||
| COSTS AND EXPENSES | |||||||||||||||||||||
| Production | 20,665 | 25,927 | 67,188 | 77,006 | |||||||||||||||||
| Exploration: | |||||||||||||||||||||
| Abandonments and impairments | 874 | 2,026 | 5,005 | 8,752 | |||||||||||||||||
| Seismic and other | 239 | 247 | 1,210 | 1,955 | |||||||||||||||||
| Midstream services | 406 | 624 | 1,339 | 1,648 | |||||||||||||||||
| Drilling rig services | 922 | 4,630 | 4,418 | 14,968 | |||||||||||||||||
| Depreciation, depletion and amortization | 36,861 | 37,037 | 121,636 | 112,242 | |||||||||||||||||
| Impairment of property and equipment | 3,089 | — | 5,620 | 3,406 | |||||||||||||||||
| Accretion of asset retirement obligations | 1,001 | 936 | 2,936 | 2,723 | |||||||||||||||||
| General and administrative | 4,631 | 811 | 25,102 | 33,980 | |||||||||||||||||
| Other operating expenses | 5,632 | 1,480 | 8,479 | 2,220 | |||||||||||||||||
| Total costs and expenses | 74,320 | 73,718 | 242,933 | 258,900 | |||||||||||||||||
| Operating income (loss) | (19,739 | ) | 45,565 | (50,979 | ) | 114,883 | |||||||||||||||
| OTHER INCOME (EXPENSE) | |||||||||||||||||||||
| Interest expense | (13,565 | ) | (12,609 | ) | (40,451 | ) | (37,975 | ) | |||||||||||||
| Gain (loss) on derivatives | 18,099 | 9,650 | 10,431 | (3,715 | ) | ||||||||||||||||
| Other | 743 | 385 | 2,307 | 2,274 | |||||||||||||||||
| Total other income (expense) | 5,277 | (2,574 | ) | (27,713 | ) | (39,416 | ) | ||||||||||||||
| Income (loss) before income taxes | (14,462 | ) | 42,991 | (78,692 | ) | 75,467 | |||||||||||||||
| Income tax (expense) benefit | 5,039 | (15,562 | ) | 27,705 | (27,319 | ) | |||||||||||||||
| NET INCOME (LOSS) | $ | (9,423 | ) | $ | 27,429 | $ | (50,987 | ) | $ | 48,148 | |||||||||||
| Net income (loss) per common share: | |||||||||||||||||||||
| Basic | $ | (0.77 | ) | $ | 2.25 | $ | (4.19 | ) | $ | 3.96 | |||||||||||
| Diluted | $ | (0.77 | ) | $ | 2.25 | $ | (4.19 | ) | $ | 3.96 | |||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||
| Basic | 12,170 | 12,166 | 12,170 | 12,166 | |||||||||||||||||
| Diluted | 12,170 | 12,166 | 12,170 | 12,166 | |||||||||||||||||
| CLAYTON WILLIAMS ENERGY, INC. | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (In thousands) | ||||||||||
| ASSETS | ||||||||||
| September 30, | December 31, | |||||||||
| 2015 | 2014 | |||||||||
| CURRENT ASSETS | (Unaudited) | |||||||||
| Cash and cash equivalents | $ | 8,742 | $ | 28,016 | ||||||
| Accounts receivable: | ||||||||||
| Oil and gas sales | 21,418 | 36,526 | ||||||||
| Joint interest and other, net | 4,436 | 14,550 | ||||||||
| Affiliates | 237 | 322 | ||||||||
| Inventory | 35,865 | 42,087 | ||||||||
| Deferred income taxes | 8,452 | 6,911 | ||||||||
| Fair value of derivatives | 5,846 | — | ||||||||
| Prepaids and other | 3,743 | 4,208 | ||||||||
| 88,739 | 132,620 | |||||||||
| PROPERTY AND EQUIPMENT | ||||||||||
| Oil and gas properties, successful efforts method | 2,591,408 | 2,684,913 | ||||||||
| Pipelines and other midstream facilities | 59,880 | 59,542 | ||||||||
| Contract drilling equipment | 123,876 | 122,751 | ||||||||
| Other | 20,307 | 20,915 | ||||||||
| 2,795,471 | 2,888,121 | |||||||||
| Less accumulated depreciation, depletion and amortization | (1,511,164 | ) | (1,539,237 | ) | ||||||
| Property and equipment, net | 1,284,307 | 1,348,884 | ||||||||
| OTHER ASSETS | ||||||||||
| Debt issue costs, net | 10,593 | 12,712 | ||||||||
| Investments and other | 16,011 | 16,669 | ||||||||
| 26,604 | 29,381 | |||||||||
| $ | 1,399,650 | $ | 1,510,885 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| CURRENT LIABILITIES | ||||||||||
| Accounts payable: | ||||||||||
| Trade | $ | 31,186 | $ | 93,650 | ||||||
| Oil and gas sales | 25,936 | 41,328 | ||||||||
| Affiliates | 266 | 717 | ||||||||
| Accrued liabilities and other | 30,137 | 20,658 | ||||||||
| 87,525 | 156,353 | |||||||||
| NON-CURRENT LIABILITIES | ||||||||||
| Long-term debt | 749,743 | 704,696 | ||||||||
| Deferred income taxes | 138,435 | 164,599 | ||||||||
| Asset retirement obligations | 48,279 | 45,697 | ||||||||
| Deferred revenue from volumetric production payment | 5,755 | 23,129 | ||||||||
| Accrued compensation under non-equity award plans | 22,720 | 17,866 | ||||||||
| Other | 386 | 751 | ||||||||
| 965,318 | 956,738 | |||||||||
| STOCKHOLDERS’ EQUITY | ||||||||||
| Preferred stock, par value $.10 per share | — | — | ||||||||
| Common stock, par value $.10 per share | 1,216 | 1,216 | ||||||||
| Additional paid-in capital | 152,686 | 152,686 | ||||||||
| Retained earnings | 192,905 | 243,892 | ||||||||
| Total stockholders' equity | 346,807 | 397,794 | ||||||||
| $ | 1,399,650 | $ | 1,510,885 | |||||||
| CLAYTON WILLIAMS ENERGY, INC. | |||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||||||
| Net income (loss) | $ | (9,423 | ) | $ | 27,429 | $ | (50,987 | ) | $ | 48,148 | |||||||||||
| Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||||||||||||||||||||
| Depreciation, depletion and amortization | 36,861 | 37,037 | 121,636 | 112,242 | |||||||||||||||||
| Impairment of property and equipment | 3,089 | — | 5,620 | 3,406 | |||||||||||||||||
| Abandonments and impairments | 874 | 2,026 | 5,005 | 8,752 | |||||||||||||||||
| (Gain) loss on sales of assets and impairment of inventory, net | 3,414 | 400 | (835 | ) | (9,069 | ) | |||||||||||||||
| Deferred income tax expense (benefit) | (5,039 | ) | 15,562 | (27,705 | ) | 27,319 | |||||||||||||||
| Non-cash employee compensation | (2,679 | ) | (6,395 | ) | 4,405 | 9,979 | |||||||||||||||
| (Gain) loss on derivatives | (18,099 | ) | (9,650 | ) | (10,431 | ) | 3,715 | ||||||||||||||
| Cash settlements of derivatives | 6,352 | (186 | ) | 4,585 | (4,777 | ) | |||||||||||||||
| Accretion of asset retirement obligations | 1,001 | 936 | 2,936 | 2,723 | |||||||||||||||||
| Amortization of debt issue costs and original issue discount | 746 | 685 | 2,241 | 2,329 | |||||||||||||||||
| Amortization of deferred revenue from volumetric production payment | (1,680 | ) | (1,898 | ) | (5,181 | ) | (5,855 | ) | |||||||||||||
| Other | 265 | — | 669 | — | |||||||||||||||||
| Changes in operating working capital: | |||||||||||||||||||||
| Accounts receivable | 4,280 | (1,868 | ) | 25,307 | (1,434 | ) | |||||||||||||||
| Accounts payable | (5,846 | ) | 8,566 | (32,057 | ) | 3,539 | |||||||||||||||
| Other | 12,260 | 14,034 | 9,788 | 10,728 | |||||||||||||||||
| Net cash provided by operating activities | 26,376 | 86,678 | 54,996 | 211,745 | |||||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||||
| Additions to property and equipment | (30,413 | ) | (127,750 | ) | (155,680 | ) | (311,968 | ) | |||||||||||||
| Proceeds from volumetric production payment | 1,003 | 258 | 1,510 | 810 | |||||||||||||||||
| Termination of volumetric production payment | (13,703 | ) | — | (13,703 | ) | — | |||||||||||||||
| Proceeds from sales of assets | 14,744 | 30,861 | 47,484 | 104,634 | |||||||||||||||||
| (Increase) decrease in equipment inventory | 103 | (1,868 | ) | 1,130 | 9,655 | ||||||||||||||||
| Other | (2 | ) | (192 | ) | (11 | ) | (325 | ) | |||||||||||||
| Net cash used in investing activities | (28,268 | ) | (98,691 | ) | (119,270 | ) | (197,194 | ) | |||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||||
| Proceeds from long-term debt | 3,000 | 7,000 | 45,000 | 29,522 | |||||||||||||||||
| Repayments of long-term debt | — | — | — | (40,000 | ) | ||||||||||||||||
| Proceeds from exercise of stock options | — | 130 | — | 130 | |||||||||||||||||
| Net cash provided by (used in) financing activities | 3,000 | 7,130 | 45,000 | (10,348 | ) | ||||||||||||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,108 | (4,883 | ) | (19,274 | ) | 4,203 | |||||||||||||||
| CASH AND CASH EQUIVALENTS | |||||||||||||||||||||
| Beginning of period | 7,634 | 35,709 | 28,016 | 26,623 | |||||||||||||||||
| End of period | $ | 8,742 | $ | 30,826 | $ | 8,742 | $ | 30,826 | |||||||||||||
| CLAYTON WILLIAMS ENERGY, INC. | |||||||||||||||||||||
| COMPUTATION OF ADJUSTED NET INCOME (LOSS) (NON-GAAP) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| (In thousands, except per share) | |||||||||||||||||||||
| Adjusted net income (loss) is presented as a supplemental non-GAAP financial measure because of its wide acceptance by financial analysts, investors, debt holders, banks, rating agencies and other financial statement users as a tool for operating trends analysis and industry comparisons. Adjusted net income (loss) is not an alternative to net income (loss) presented in conformity with GAAP. | |||||||||||||||||||||
| The Company defines adjusted net income (loss) as net income (loss) before changes in fair value of derivatives, abandonments and impairments, impairments of property and equipment, net (gain) loss on sales of assets and impairment of inventory, amortization of deferred revenue from volumetric production payment, certain non-cash and unusual items and the impact on taxes of the adjustments for each period presented. | |||||||||||||||||||||
| The following table is a reconciliation of net income (loss) (GAAP) to adjusted net income (loss) (non-GAAP): | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| Net income (loss) | $ | (9,423 | ) | $ | 27,429 | $ | (50,987 | ) | $ | 48,148 | |||||||||||
| (Gain) loss on derivatives | (18,099 | ) | (9,650 | ) | (10,431 | ) | 3,715 | ||||||||||||||
| Cash settlements of derivatives | 6,352 | (186 | ) | 4,585 | (4,777 | ) | |||||||||||||||
| Abandonments and impairments | 874 | 2,026 | 5,005 | 8,752 | |||||||||||||||||
| Impairment of property and equipment | 3,089 | — | 5,620 | 3,406 | |||||||||||||||||
| Net (gain) loss on sales of assets and impairment of inventory | 3,414 | 400 | (835 | ) | (9,069 | ) | |||||||||||||||
| Amortization of deferred revenue from volumetric production payment | (1,680 | ) | (1,898 | ) | (5,181 | ) | (5,855 | ) | |||||||||||||
| Non-cash employee compensation | (2,679 | ) | (6,395 | ) | 4,405 | 9,979 | |||||||||||||||
| Other | 265 | — | 669 | — | |||||||||||||||||
| Tax impact (a) | 2,945 | 5,684 | (1,351 | ) | (2,227 | ) | |||||||||||||||
| Adjusted net income (loss) | $ | (14,942 | ) | $ | 17,410 | $ | (48,501 | ) | $ | 52,072 | |||||||||||
| Adjusted earnings per share: | |||||||||||||||||||||
| Diluted | $ | (1.23 | ) | $ | 1.43 | $ | (3.99 | ) | $ | 4.28 | |||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||
| Diluted | 12,170 | 12,166 | 12,170 | 12,166 | |||||||||||||||||
| Effective tax rates | 34.8 | % | 36.2 | % | 35.2 | % | 36.2 | % | |||||||||||||
| _______ | |||||||||||||||||||||
| (a) The tax impact is computed utilizing the Company’s effective tax rate on the adjustments for each period presented. | |||||||||||||||||||||
| CLAYTON WILLIAMS ENERGY, INC. | |||||||||||||||||||||
| COMPUTATION OF EBITDAX (NON-GAAP) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||
| EBITDAX is presented as a supplemental non-GAAP financial measure because of its wide acceptance by financial analysts, investors, debt holders, banks, rating agencies and other financial statement users as an indication of an entity's ability to meet its debt service obligations and to internally fund its exploration and development activities. EBITDAX is not an alternative to net income (loss) or cash flow from operating activities, or any other measure of financial performance presented in conformity with GAAP. | |||||||||||||||||||||
| The Company defines EBITDAX as net income (loss) before interest expense, income taxes, exploration costs, net (gain) loss on sales of assets and impairment of inventory, and all non-cash items in the Company's statements of operations, including depreciation, depletion and amortization, impairment of property and equipment, accretion of asset retirement obligations, amortization of deferred revenue from volumetric production payment, certain employee compensation, changes in fair value of derivatives and certain non-cash and unusual items. | |||||||||||||||||||||
| The following table reconciles net income (loss) to EBITDAX: | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| Net income (loss) | $ | (9,423 | ) | $ | 27,429 | $ | (50,987 | ) | $ | 48,148 | |||||||||||
| Interest expense | 13,565 | 12,609 | 40,451 | 37,975 | |||||||||||||||||
| Income tax expense (benefit) | (5,039 | ) | 15,562 | (27,705 | ) | 27,319 | |||||||||||||||
| Exploration: | |||||||||||||||||||||
| Abandonments and impairments | 874 | 2,026 | 5,005 | 8,752 | |||||||||||||||||
| Seismic and other | 239 | 247 | 1,210 | 1,955 | |||||||||||||||||
| Net (gain) loss on sales of assets and impairment of inventory | 3,414 | 400 | (835 | ) | (9,069 | ) | |||||||||||||||
| Depreciation, depletion and amortization | 36,861 | 37,037 | 121,636 | 112,242 | |||||||||||||||||
| Impairment of property and equipment | 3,089 | — | 5,620 | 3,406 | |||||||||||||||||
| Accretion of asset retirement obligations | 1,001 | 936 | 2,936 | 2,723 | |||||||||||||||||
| Amortization of deferred revenue from volumetric production payment | (1,680 | ) | (1,898 | ) | (5,181 | ) | (5,855 | ) | |||||||||||||
| Non-cash employee compensation | (2,679 | ) | (6,395 | ) | 4,405 | 9,979 | |||||||||||||||
| (Gain) loss on derivatives | (18,099 | ) | (9,650 | ) | (10,431 | ) | 3,715 | ||||||||||||||
| Cash settlements of derivatives | 6,352 | (186 | ) | 4,585 | (4,777 | ) | |||||||||||||||
| Other | 265 | — | 669 | — | |||||||||||||||||
| EBITDAX (a) | $ | 28,740 | $ | 78,117 | $ | 91,378 | $ | 236,513 | |||||||||||||
| The following table reconciles net cash provided by operating activities to EBITDAX: | |||||||||||||||||||||
| Net cash provided by operating activities | $ | 26,376 | $ | 86,678 | $ | 54,996 | $ | 211,745 | |||||||||||||
| Changes in operating working capital | (10,694 | ) | (20,732 | ) | (3,038 | ) | (12,833 | ) | |||||||||||||
| Seismic and other | 239 | 247 | 1,210 | 1,955 | |||||||||||||||||
| Cash interest expense | 12,819 | 11,924 | 38,210 | 35,646 | |||||||||||||||||
|
| $ | 28,740 | $ | 78,117 | $ | 91,378 | $ | 236,513 | |||||||||||||
| ______ | |||||||||||||||||||||
| (a) In March 2014, the company sold interests in certain non-core Austin Chalk/Eagle Ford assets. Revenue, net of direct expenses, associated with the sold properties was $2.5 million for the nine months ended September 30, 2014. | |||||||||||||||||||||
| CLAYTON WILLIAMS ENERGY, INC. | |||||||||||||||||||
| SUMMARY PRODUCTION AND PRICE DATA | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
| Oil and Gas Production Data: | |||||||||||||||||||
| Oil (MBbls) | 1,026 | 1,040 | 3,330 | 3,093 | |||||||||||||||
| Gas (MMcf) | 1,590 | 1,500 | 4,458 | 4,293 | |||||||||||||||
| Natural gas liquids (MBbls) | 142 | 144 | 418 | 434 | |||||||||||||||
| Total (MBOE) | 1,433 | 1,434 | 4,491 | 4,243 | |||||||||||||||
| Total (BOE/d) | 15,576 | 15,586 | 16,451 | 15,541 | |||||||||||||||
| Average Realized Prices (a) (b): | |||||||||||||||||||
| Oil ($/Bbl) | $ | 43.26 | $ | 90.73 | $ | 46.93 | $ | 93.45 | |||||||||||
| Gas ($/Mcf) | $ | 2.71 | $ | 4.14 | $ | 2.65 | $ | 4.53 | |||||||||||
| Natural gas liquids ($/Bbl) | $ | 11.01 | $ | 31.73 | $ | 13.09 | $ | 34.35 | |||||||||||
| Gain (Loss) on Settled Derivative Contracts (b): | |||||||||||||||||||
| ($ in thousands, except per unit) | |||||||||||||||||||
| Oil: | |||||||||||||||||||
| Cash settlements received (paid) | $ | 6,352 | $ | (186 | ) | $ | 4,585 | $ | (4,777 | ) | |||||||||
| Per unit produced ($/Bbl) | $ | 6.19 | $ | (0.18 | ) | $ | 1.38 | $ | (1.54 | ) | |||||||||
| Average Daily Production: | |||||||||||||||||||
| Oil (Bbls): | |||||||||||||||||||
| Permian Basin Area: | |||||||||||||||||||
| Delaware Basin | 3,175 | 2,990 | 3,561 | 3,390 | |||||||||||||||
| Other | 3,221 | 3,205 | 3,141 | 3,325 | |||||||||||||||
| Austin Chalk (c) | 1,806 | 1,917 | 1,884 | 2,074 | |||||||||||||||
| Eagle Ford Shale (c) | 2,634 | 2,716 | 3,269 | 2,106 | |||||||||||||||
| Other | 316 | 476 | 343 | 435 | |||||||||||||||
| Total | 11,152 | 11,304 | 12,198 | 11,330 | |||||||||||||||
| Natural Gas (Mcf): | |||||||||||||||||||
| Permian Basin Area: | |||||||||||||||||||
| Delaware Basin | 2,766 | 2,336 | 3,036 | 2,690 | |||||||||||||||
| Other | 6,771 | 6,795 | 6,653 | 6,839 | |||||||||||||||
| Austin Chalk (c) | 1,708 | 1,754 | 1,737 | 1,786 | |||||||||||||||
| Eagle Ford Shale (c) | 451 | 482 | 540 | 362 | |||||||||||||||
| Other | 5,587 | 4,937 | 4,364 | 4,048 | |||||||||||||||
| Total | 17,283 | 16,304 | 16,330 | 15,725 | |||||||||||||||
| Natural Gas Liquids (Bbls): | |||||||||||||||||||
| Permian Basin Area: | |||||||||||||||||||
| Delaware Basin | 408 | 451 | 417 | 477 | |||||||||||||||
| Other | 814 | 803 | 794 | 812 | |||||||||||||||
| Austin Chalk (c) | 179 | 176 | 169 | 184 | |||||||||||||||
| Eagle Ford Shale (c) | 121 | 95 | 126 | 91 | |||||||||||||||
| Other | 21 | 40 | 25 | 26 | |||||||||||||||
| Total | 1,543 | 1,565 | 1,531 | 1,590 | |||||||||||||||
| BOE: | |||||||||||||||||||
| Permian Basin Area: | |||||||||||||||||||
| Delaware Basin | 4,044 | 3,830 | 4,484 | 4,315 | |||||||||||||||
| Other | 5,164 | 5,141 | 5,044 | 5,277 | |||||||||||||||
| Austin Chalk (c) | 2,270 | 2,385 | 2,343 | 2,556 | |||||||||||||||
| Eagle Ford Shale (c) | 2,830 | 2,891 | 3,485 | 2,257 | |||||||||||||||
| Other | 1,268 | 1,339 | 1,095 | 1,136 | |||||||||||||||
| Total | 15,576 | 15,586 | 16,451 | 15,541 | |||||||||||||||
| Oil and Gas Costs ($/BOE Produced): | |||||||||||||||||||
| Production costs | $ | 14.42 | $ | 18.08 | $ | 14.96 | $ | 18.15 | |||||||||||
| Production costs (excluding production taxes) | $ | 12.68 | $ | 14.19 | $ | 12.99 | $ | 14.16 | |||||||||||
| Oil and gas depletion | $ | 23.26 | $ | 23.78 | $ | 24.60 | $ | 24.31 | |||||||||||
| ______ | ||
| (a) | Oil and gas sales includes $0.8 million for the three months ended September 30, 2015, $1.9 million for the three months ended September 30, 2014, $4.3 million for the nine months ended September 30, 2015 and $5.9 million for the nine months ended September 30, 2014 of amortized deferred revenue attributable to a volumetric production payment (“VPP”) transaction effective March 1, 2012. In August 2015, the Company terminated the VPP covering 277 MBOE of oil and gas production from August 2015 through December 2019 for $13.7 million. The calculation of average realized sales prices excludes production of 7,371 barrels of oil and 4,898 Mcf of gas for the three months ended September 30, 2015, 25,122 barrels of oil and 10,987 Mcf of gas for the three months ended September 30, 2014, 53,026 barrels of oil and 35,735 Mcf of gas for the nine months ended September 30, 2015 and 77,543 barrels of oil and 33,608 Mcf of gas for the nine months ended September 30, 2014 associated with the VPP. | |
| (b) | Hedging gains/losses are only included in the determination of the Company's average realized prices if the underlying derivative contracts are designated as cash flow hedges under applicable accounting standards. The Company did not designate any of its 2015 or 2014 derivative contracts as cash flow hedges. This means that the Company's derivatives for 2015 and 2014 have been marked-to-market through its statement of operations as other income/expense instead of through accumulated other comprehensive income on the Company's balance sheet. This also means that all realized gains/losses on these derivatives are reported in other income/expense instead of as a component of oil and gas sales. | |
| (c) | Following is a recap of the average daily production related to interests in producing properties sold by the Company effective March 2014. | |
| Nine Months Ended | ||||||
| 2015 | 2014 | |||||
| Average Daily Production: | ||||||
| Austin Chalk/Eagle Ford: | ||||||
| Oil (Bbls) | — | 125 | ||||
| Natural gas (Mcf) | — | 15 | ||||
| NGL (Bbls) | — | 4 | ||||
| Total (BOE) | — | 132 | ||||
| CLAYTON WILLIAMS ENERGY, INC. |
| SUMMARY OF OPEN COMMODITY DERIVATIVES |
| (Unaudited) |
The following summarizes information concerning the Company’s net positions in open commodity derivatives applicable to periods subsequent to September 30, 2015. The settlement prices of commodity derivatives are based on NYMEX futures prices.
Swaps:
| Oil | |||||||
| MBbls | Price | ||||||
| Production Period: | |||||||
| 4th Quarter 2015 | 592 | $ | 55.65 | ||||
| 592 | |||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151104006933/en/
Contact
Clayton Williams Energy, Inc.
Patti Hollums, 432-688-3419
Director of Investor Relations
cwei@claytonwilliams.com
www.claytonwilliams.com
or
Michael L. Pollard, 432-688-3029
Chief Financial Officer
