Clayton Williams Energy Inc. (CWEI, Financial) filed Quarterly Report for the period ended 2009-03-31.
Clayton Williams Energy is an independent oil and gas company engaged in the exploration for and development and production of oil and natural gas primarily in Texas Louisiana and New Mexico. A significant portion of the company's proved oil and gas reserves are concentrated in the Cretaceous Trend which extends from south Texas through east Texas Louisiana and other southern states and includes the Austin Chalk Buda and Georgetown formations. Clayton Williams Energy Inc. has a market cap of $345.3 million; its shares were traded at around $28.47 with a P/E ratio of 3.5 and P/S ratio of 0.6. Clayton Williams Energy Inc. had an annual average earning growth of 15% over the past 10 years.
The current economic recession has caused us to significantly reduce the level of developmental drilling pending an improvement in product prices and operating margins. Approximately 70% of the $37.9 million spent on exploration and development activities during the first quarter of 2009 was applicable to exploratory prospects. These prospects were primarily in areas where we have invested significant capital in acreage and seismic data, or were prospects for which we had made drilling commitments to joint owners in the wells. We presently plan to spend approximately $78.5 million on exploration and development activities during 2009, of which approximately 50% is expected to be spent on developmental drilling. We may increase or decrease our planned activities, depending upon drilling results, operating margins, the availability of capital resources, and other factors affecting the economic viability of such activities.
To date, we have drilled 18 wells on our Terryville prospect and have completed 16 as producers. On our Ruston prospect, we have completed three wells as producers and are currently completing a fourth well. We spent $2.4 million in North Louisiana during the three months of 2009 on exploration and development activities, of which $2.2 million was spent on drilling and completion activities and $200,000 was spent on seismic and leasing activities. We currently plan to spend $4 million for fiscal 2009 in this area.
We spent $9.8 million in South Louisiana during the three months ended March 31, 2009 on exploration and development activities, of which $9.1 million was spent on drilling and completion activities and $700,000 was spent on seismic and leasing activities. We currently plan to spend $23.3 million for fiscal 2009, of which $20.6 million relates to drilling and completion activities and the remaining $2.7 million relates to seismic and leasing activities.
We spent $13.5 million in the East Texas Bossier area during the three months ended March 31, 2009 on exploration and development activities, of which $5.9 million was spent on drilling and completion activities and $7.6 million was spent on seismic and leasing activities. We currently plan to spend $19.9 million for fiscal 2009, of which $6.9 million relates to drilling and completion activities and the remaining $13 million relates to seismic and leasing activities.
We spent $400,000 in the Austin Chalk (Trend) area during the first three months of 2009. Due to recent declines in product prices and lower operating margins on drilling, we currently plan to spend only $1.5 million in the Austin Chalk (Trend) for fiscal 2009.
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Clayton Williams Energy is an independent oil and gas company engaged in the exploration for and development and production of oil and natural gas primarily in Texas Louisiana and New Mexico. A significant portion of the company's proved oil and gas reserves are concentrated in the Cretaceous Trend which extends from south Texas through east Texas Louisiana and other southern states and includes the Austin Chalk Buda and Georgetown formations. Clayton Williams Energy Inc. has a market cap of $345.3 million; its shares were traded at around $28.47 with a P/E ratio of 3.5 and P/S ratio of 0.6. Clayton Williams Energy Inc. had an annual average earning growth of 15% over the past 10 years.
Highlight of Business Operations:
Reduced demand for energy caused by the current recession has resulted in a significant deterioration in oil and gas prices, which in turn has led to a significant reduction in drilling activity throughout the oil and gas industry. The prices we pay for field services generally lag behind the declines in oil and gas prices. As a result, we have experienced reductions in operating margins during the last half of 2008 and into the first quarter of 2009. The effects of lower operating margins on our business are significant since they reduce our cash flow from operations and diminish the present value of our oil and gas reserves. These factors have an adverse effect on our ability to access the capital resources we need to grow our reserve base. Lower operating margins also offer us less incentive to assume the drilling risks that are inherent in our business. In response to decreases in product prices and the resulting effect on our operating margins, we currently plan to spend approximately $78.5 million on exploration and development activities in fiscal 2009 as compared to $372.7 million spent in fiscal 2008.The current economic recession has caused us to significantly reduce the level of developmental drilling pending an improvement in product prices and operating margins. Approximately 70% of the $37.9 million spent on exploration and development activities during the first quarter of 2009 was applicable to exploratory prospects. These prospects were primarily in areas where we have invested significant capital in acreage and seismic data, or were prospects for which we had made drilling commitments to joint owners in the wells. We presently plan to spend approximately $78.5 million on exploration and development activities during 2009, of which approximately 50% is expected to be spent on developmental drilling. We may increase or decrease our planned activities, depending upon drilling results, operating margins, the availability of capital resources, and other factors affecting the economic viability of such activities.
To date, we have drilled 18 wells on our Terryville prospect and have completed 16 as producers. On our Ruston prospect, we have completed three wells as producers and are currently completing a fourth well. We spent $2.4 million in North Louisiana during the three months of 2009 on exploration and development activities, of which $2.2 million was spent on drilling and completion activities and $200,000 was spent on seismic and leasing activities. We currently plan to spend $4 million for fiscal 2009 in this area.
We spent $9.8 million in South Louisiana during the three months ended March 31, 2009 on exploration and development activities, of which $9.1 million was spent on drilling and completion activities and $700,000 was spent on seismic and leasing activities. We currently plan to spend $23.3 million for fiscal 2009, of which $20.6 million relates to drilling and completion activities and the remaining $2.7 million relates to seismic and leasing activities.
We spent $13.5 million in the East Texas Bossier area during the three months ended March 31, 2009 on exploration and development activities, of which $5.9 million was spent on drilling and completion activities and $7.6 million was spent on seismic and leasing activities. We currently plan to spend $19.9 million for fiscal 2009, of which $6.9 million relates to drilling and completion activities and the remaining $13 million relates to seismic and leasing activities.
We spent $400,000 in the Austin Chalk (Trend) area during the first three months of 2009. Due to recent declines in product prices and lower operating margins on drilling, we currently plan to spend only $1.5 million in the Austin Chalk (Trend) for fiscal 2009.
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