Clayton Williams: Farming Out 15,000 Acres In Reeves County
- The farmout covers the western fringe portion of CWEI's Bone Spring/Wolfcamp position in Reeves County, Texas.
- Following the recent sale of eastern non-core acreage, the company will retain 56,000 core acres in the heart of the Wolfcamp fairway.
- The move is logical and prudent, given oil price uncertainties, CWEI's capital constraints and the vast opportunity set the company has.
Clayton Williams Energy: Valuation Compelling Again
- The note provides well performance data for Clayton Williams’ Eagle Ford and horizontal Wolfcamp wells.
- Management believes both the Permian and Eagle Ford assets work in $80 per barrel oil price environment, with ~30% well-level returns.
- After the correction, the shares again look compelling on value, assuming the oil price weakness is transitory.
- The company’s two major resource play positions have strategic value and should help support the share price in a downcycle.
Clayton Williams Energy: Superior Land Position In The Permian Basin, Significant Upside
- CWEI has a substantial land position in the Permian Basin.
- CWEI trades at a significant discount to its peers on an enterprise value to leased acre basis.
- CWEI should be valued at $500 per share, implying an increase of 285% vs. the current stock price of $129.92 (as of July 10, 2014).
- Clayton Williams has been one of the best performing stocks in the E&P sector, gaining ~240% in 18 months.
- The stock’s performance has been underpinned by the strong momentum in the company’s two key operating areas: Delaware Basin Wolfcamp and East Texas Eagle Ford.
- The stock still offers substantial potential upside, although from this point outperformance will depend on operating progress in the new plays.
Clayton Williams Energy: Asset Sale And Latest Well Results
- Clayton Williams’ sale of non-core assets provides meaningful proceeds without diminishing the multi-decade scale of the company’s drilling inventory.
- The company’s two most wells in the East Texas Eagle Ford are performing strongly and confirm earlier success of the Pivonka well.
- The latest wells are on track to exceed Clayton William’s EUR guidance. At $5-$6 million per well, drilling economics look highly compelling.
- If Clayton Williams is able to deliver additional strong well results in the Eagle Ford, the play may provide a second catalyst for the stock, alongside the Permian.
Clayton Williams Energy: Analyzing Latest Eagle Ford Results
Beginning Of A Turning Point For Clayton Williams Energy
Wed, Jan. 21, 2:03 PM
- “Companies will start to sell off the family silver” amid sustained low oil prices, and Halcon Resources (NYSE:HK) and Goodrich Petroleum (NYSE:GDP) are among energy companies that need to keep an eye on their liquidity the most and are thus the most likely candidates to sell assets, analysts say.
- HK has the most debt relative to its market value among similar-sized North American peers, according to Bloomberg data, and its plan to cut 2015 drilling to just three rigs vs. earlier plans for as many as 11 opens up the possibility that it could try to sell some of the acreage where it is not currently drilling, SunTrust's Neal Dingmann says.
- Analysts also tab Clayton Williams Energy (NYSE:CWEI), Denbury Resources (NYSE:DNR) and Penn West Petroleum (NYSE:PWE) as energy companies most likely to sell assets.
- Also, Dingmann names top Bakken producers Continental Resources (NYSE:CLR) and Whiting Petroleum (NYSE:WLL) as potential targets of takeover interest as producers with stronger balance sheets that have become more affordable with oil’s plunge; other analysts mention Carrizo Oil & Gas (NASDAQ:CRZO) and PDC Energy (NASDAQ:PDCE) as potential candidates.
Tue, Jan. 6, 8:17 AM
- Tumbling crude oil prices will trigger a flood of oilfield writedowns starting this month, with companies on the hook expensive projects that don’t make sense in a $50/bbl market including global giants such as Royal Dutch Shell (RDS.A, RDS.B) and small wildcatters like Sanchez Energy (NYSE:SN), Citigroup analysts say.
- The oil rout is exposing projects dating as far back as 2009 that were either poorly executed or bad ideas to begin with, the Citi team says, adding that Shell may have as much as 5% of its capital tied up in money-losing projects, and the figure at BG Group (OTCPK:BRGXF, OTCQX:BRGYY) could be as high as 8%.
- Analysts believe the biggest swath of asset writedowns probably will happen among U.S. explorers such as Sanchez, Matador Resources (NYSE:MTDR) and Clayton Williams (NYSE:CWEI) that do not have the same financial discipline as bigger producers.
- For the biggest U.S. and European petroleum producers, return on equity has fallen to an average of 7.5%, the lowest since Q4 1998, according to the CIti team.
Dec. 5, 2014, 5:38 PM
- The Eagle Ford shale formation in south Texas produced its billionth barrel of oil some time last month, according to analysts at research firm Wood Mackenzie.
- Eagle Ford now accounts for 16% of total U.S. oil production, and the firm forecasts E&P spending of $30.8B in the region next year, ~22% of the total $139.3B expected in U.S. onshore spending.
- Eagle Ford is widely considered the most profitable U.S. shale field, and many analysts speculate the break-even price for production to remain profitable is ~$50/bbl in much of the play.
- Top Eagle Ford producers include EOG, CHK, COP, MRO, BHP, APC, APA, BP, COG, CRZO, CWEI, CRK, XOM, GDP, HES, MTDR, MUR, NFX, PVA, PXD, ROSE, RDS.A, RDS.B, SN, SM, STO, SFY, TLM, ZAZA
Dec. 5, 2014, 10:38 AM
- Indebted U.S. shale companies are facing financial pressure from falling oil prices, raising fears that liquidity could dry up for companies with the greatest debt burdens, but Fitch thinks they may find their lenders are inclined to go easy on them.
- The rating agency believes that, as in the previous oil price crash of 2008-09, banks are likely to show forbearance rather than pushing many companies towards restructuring or bankruptcy.
- Fitch identifies Kodiak Oil and Gas (KOG -2.9%), which has already accepted a takeover offer from Whiting Petroleum (WLL -2.6%), as showing the most warning signs.
- Linn Energy (LINE -0.9%), Breitburn Energy (BBEP -2.6%) and Energy XXI (EXXI -2.8%) are among the companies that have less than half of their revolving credit facilities still unused and available, while Clayton Williams (CWEI -3.5%) had hedged less than half its production for next year, according to Fitch.
Dec. 3, 2014, 11:32 AM
- The energy sector (XLE +1.5%) continues its momentum from yesterday, leading the way again as the best performing sector in early trading with crude oil rising 1.2% so far today and reports that U.S. well permits fell 40% last month.
- Top performers include Clayton Williams (CWEI +7.7%), Transocean Partners (RIGP +10.6%), Gaslog (GLOG +13.8%) and Energy XXI (EXXI +15.7%).
- Other leading energy names are showing stronger recoveries as they clear last Friday's bearish gap zone: XOM +0.2%, CVX +0.4%, COP +2.5%, OXY +2.5%, DVN +2.9%, EOG +2.5%, HES +2.2%, MUR +1.5%, NBL +2.3%, PXD +4.2%, SU +3%, CNQ +1.9%.
- Some analysts warn that the worst may not be over, however, as much of the advance is being driven by investors repurchasing ETFs they used to make short bets; investors also could opt to sell oil shares at a loss in coming weeks to reduce tax burdens.
Dec. 1, 2014, 12:21 PM
- Oil prices are rebounding, with both WTI and Brent crude up ~2%, but only a handful of energy stocks are rising.
- Exxon Mobil (XOM +1.4%) and Chevron (CVX +1.3%) are both up more than 1%, but the vast majority of energy stocks - led by Denbury Resources (DNR -8.9%), Newfield Exploration (NFX -7.6%) and Goodrich Petroleum (GDP -22.3%) - are seeing heavy selling.
- The SPDR Energy Select Sector ETF (XLE -1.2%) is lower despite gains in XOM and CVX, XLE’s two most heavily weighted stocks, as 38 of its 43 equity components trade lower; the ETF has now lost 7.5% since OPEC sent oil prices plunging by agreeing last Thursday not to cut production.
- Among XLE’s most actively traded components, Kinder Morgan (KMI -3.3%), Halliburton (HAL -3.4%), Transocean (RIG -6.1%) and Schlumberger (SLB -2.1%) are sharply lower.
- Other big decliners include BBEP -17.8%, SD -12.1%, SN -13%, CWEI -8.8%, CPE -14.6%, EXXI -18.9%, LRE -22.8%, REI -16.9%, SSE -15.3%.
- Other ETFs: ERX, VDE, OIH, XOP, ERY, DIG, DUG, IYE, XES, IEO, IEZ, PXE, FENY, PXJ, RYE, FXN, DDG
Oct. 23, 2014, 7:59 AM
Oct. 22, 2014, 5:30 PM
- AAL, AB, ACAT, AEP, ALK, ALV, ALXN, ARG, ASPS, AVT, BBW, BC, BCC, BHE, BKU, BMS, CAB, CAM, CAT, CCE, CELG, CFX, CHKP, CLI, CMCSA, CMS, CRI, CRS, CS, CSH, CVE, CWEI, DAN, DGX, DLX, DNKN, DO, DPS, EQM, EQT, FAF, GM, GMT, GPI, GRUB, HERO, HUB.B, IMAX, IVC, JAH, JAKK, JBLU, JNS, KKR, LAZ, LLY, LO, LSTR, LTM, LUV, MDP, MHO, MINI, MJN, MMM, MTRN, NLSN, NOK, NUE, NWE, ORI, OSIS, OSTK, OXY, PCP, PENN, PHM, PLD, POT, PRLB, PTEN, QSII, RCI, RCL, RS, RTN, RYL, SIAL, SILC, SJR, SLAB, SONS, SQNS, STC, TDY, TROW, UA, UAL, UFS, UNP, USG, UTEK, WCC, WSO, YNDX, ZMH
Oct. 16, 2014, 6:05 PM
- Clayton Williams Energy (NYSE:CWEI) says it expects Q3 total production to average ~15.5K boe/day (73% oil,10% natural gas liquids), with its Delaware Basin play averaging 3.8K boe/day (78% oil, 12% NGL) and Eagle Ford averaging 2.9K boe/day (94% oil, 3% NGL).
- Total production would fall ~350 boe/day shy of company guidance, with mechanical setbacks in the Delaware Basin accounting for a 400 boe/day shortfall, largely offset by gains from the Eagle Ford, other Permian Basin and south Louisiana properties.
- Says 17 horizontal Wolfcamp A wells in Reeves County, Tex., have been on production for 30 or more days, with peak 30-day output averaging 754 boe/day (79% oil, 10% NGL).
Aug. 5, 2014, 11:41 AM
- Clayton Williams Energy (CWEI -5.1%) slides sharply lower despite praise from Global Hunter, which upgrades shares to Buy from Accumulate as the stock pulls back.
- CWEI lowered its 2014 production guidance and raised its 2014 capex guidance; however, Hunter already had lowered estimates following CWEI's Q2 call.
- The firm says CWEI's updated 2014 oil production and capex guidance were slightly above prior estimates, partially due to the earlier than expected addition of a fourth rig in the Delaware Basin.
- Wunderlich reiterates its Buy rating but lowers its target price to $144, still liking CWEI's inventory in the Permian but noting that the forecast increase in capex would mean more borrowing in 2014-15 (Briefing.com).
Aug. 4, 2014, 4:55 PM
- Clayton Williams Energy (NYSE:CWEI) says it plans to spend ~$440M on exploration and development activities during FY 2014, up 5% from previous guidance of $418M, attributable to expectations of adding a fourth drilling rig in the Delaware Basin.
- Reports Q2 average daily production of 15,559 boe/day, flat Q/Q, and forecasts total FY 2014 production of 16K-16,567 boe/day; downwardly revises estimated 2014 oil production by 3%, driven by production shortfalls in certain step-out or delineation wells in CWEI's Delaware Basin and Eagle Ford Shale plays, but the company believes the causes of the production shortfalls are isolated and can be corrected through improved completion techniques.
Jul. 24, 2014, 8:06 AM
Jul. 23, 2014, 5:30 PM
- AAL, ABC, ALK, ALXN, ARG, ASPS, BBW, BC, BCC, BHE, BKU, BMS, BMY, BPOP, BSX, CAB, CAM, CAT, CCE, CELG, CLF, CLFD, CLI, CMS, COG, CRI, CRY, CSH, CWEI, DAN, DFT, DGX, DHI, DLX, DNKN, DO, DPS, DST, ECA, EQM, EQT, F, FAF, FLIR, GM, GNTX, GPI, GPK, GRUB, HOT, HSY, IMAX, IMS, IQNT, ISSI, IVC, JAH, JBLU, KEM, KKR, LAZ, LLY, LTM, LUV, MHO, MMM, MTH, MTRN, NBL, NDAQ, NOK, NUE, NWE, O, ORI, OSTK, PCP, PDS, PENN, PHM, PNK, POT, PRLB, PTEN, QSII, RCI, RCL, RDWR, RS, RTIX, RTN, SCHL, SFE, SIAL, SQNS, SUI, SVU, SXC, TDY, TROW, TWI, UA, UAL, UFS, UNP, USG, VAC, VDSI, VIVO, WAB, WCC, WIT, WYN, ZMH
Jul. 3, 2014, 3:20 PM
- A recent surge of low-magnitude earthquakes in Oklahoma probably is the result of the underground disposal of vast quantities of wastewater generated by oil and gas extraction, according to a new study published today in the journal Science.
- The researchers also calculated that four of the highest-volume wells in Oklahoma are capable of triggering ~20% of recent central U.S. quakes, and found that such induced quakes could potentially occur more than 30 km from the well.
- The Cornell geophysics professor who led the study says the results suggest regulators and oil companies should avoid disposing of wastewater near major faults and do a better job monitoring the activity.
- Among energy firms with a significant Oklahoma presence: CHK, CLR, APA, DVN, SD, EOG, MRO, OKE, OKS, GPOR, WPX, WMB, WPZ, LPI, CWEI, NFX, NGL, COG, WLL, NBL, MPO, PQ, XEC.
Apr. 24, 2014, 7:58 AM
Apr. 24, 2014, 12:05 AM
- AAL, ABC, AET, ALXN, AMAG, ASPS, AVT, AZN, BC, BHE, BKU, BMS, BTU, CAB, CAJ, CAM, CAT, CCE, CELG, CFX, CLFD, CLI, CMS, CNMD, COG, COR, CRR, CRS, CSH, CWEI, DFT, DGX, DHI, DLPH, DLX, DNKN, DO, DST, EQM, EQT, ETR, FAF, FCX, FNFG, GM, GMT, GPK, GTI, HOT, HP, HSY, IMAX, IVC, JBLU, KKR, LAD, LLY, LSTR, LTM, LUV, MDP, MHO, MJN, MMM, MO, NBL, NDAQ, NLSN, NTCT, NUE, NVS, NYT, ODFL, ORI, OSTK, PAG, PENN, PHM, POT, PTEN, RCL, RS, RTIX, RTN, RYL, SCG, SFE, SIAL, SILC, SIRI, SONS, SQNS, STC, SWK, TKR, TROW, TWC, TWI, UA, UAL, UFS, UPS, USG, UTEK, VDSI, VIVO, VLY, VZ, WCC, WM, WYN, YNDX, ZMH
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