Clayton Williams May Reduce Eagle Ford Drilling Program - 2015

Clayton Williams Eagle Ford Operations Map

With the recent dip in oil prices, Clayton Williams indicated it may be scaling back drilling plans in the Eagle Ford in 2015.

Currently, the company is running a six rig program across its core areas, with three in the Eagle Ford and three in the Delaware Basin, and plans to continue drilling at this pace for the remainder of 2014. Based on this level of activity, the company expects combined oil and gas production for the fourth quarter of 2014 to average between 16,600 and 17,000 boe/d portfolio-wide.

By comparison, Clayton Williams estimates the same number of rigs in the Eagle Ford and Delaware Basin, would yield an average between 18,800 and 19,400 boe/d portfolio-wide in 2015. However, officials indicated in the company's third quarter of 2014 report that a two rig drilling program may be considered in each area, which would reduce production by 1,300 boe/d.

In the third quarter of 2014, the Eagle Ford alone averaged approximately 2,900 boe/d, with a 94% oil cut.

Clayton Williams' Eagle Ford Operations Update - Q3 2014

Currently, Clayton Williams has 22 horizontal Eagle Ford wells on its legacy Austin Chalk acreage block in Burleson, Robertson and Lee Counties, that have been on production for 30 days or more. The peak 30-day production rate for these wells has averaged 518 boe/d, with a 96% oil cut. Six additional wells have been on production for less than 30 days or are currently in various stages of completion, and three wells are currently being drilled. Typical drilling and completion costs in this area range from $5-million to $6-million per well, according to company officials.

Clayton Williams Testing Sequential Fracturing Operations and Well Densities

Clayton Williams is currently testing sequential fracturing operations and increased well densities, primarily in Burleson County, to help determine optimal spacing and fracturing design for future Eagle Ford development. Company officials say two adjacent wells were sequentially fractured with good early results, and there are plans for the fourth quarter to sequentially fracture a group of three adjacent wells.

Read more at ClaytonWilliams.com

Clayton Williams Falls Short of First-Quarter 2014 Production Estimate

Clayton Williams Eagle Ford Acreage Map

Clayton Williams production, revenues and operating costs for the first-quarter of 2014 were down compared to the first-quarter of 2013, after two significant divestitures over the course of the last year. Overall production was 250 boe/d below analyst estimates for the first-quarter of 2014 according to company officials.

In March 2014, Clayton Williams sold all of its interests in certain non-core Austin Chalk and Eagle Ford assets. Due to the divestiture, production for the sold assets in the first-quarter of 2014 went down 47% compared to the first-quarter of 2013. Daily production for the sold assetsin the first-quarter of 2014 was 385 boe/d.

Read more: Clayton Williams Sells Eagle Ford and Austin Chalk Acreage for $71 Million

Across the company's portfolio, production costs decreased 16% to $26.4 million in the first-quarter, compared to the first-quarter of last year. Company officials attributed this decrease primarily to another acreage asset divestiture in the company's Andrews County Wolfberry Play in April 2013.

In Reeves and Burleson Counties in Texas, two wells experienced drilling and completion complications, which company officials say accounted for production delays of 400 boe/d.

After giving affect to asset sales, Clayton Williams saw a total production increase per BOE of 25% across its' portfolio in the first-quarter of 2014 compared to the first-quarter of 2013. Oil and NGL production increased to 2,756 b/d and 378 b/d consecutively. Gas production decreased 455 Mcf/d.

Clayton Williams Eagle Ford Operations Update

Clayton Williams continues to see consistent results from its horizontal Eagle Ford Shale play in the northern portion of its legacy Austin Chalk acreage block in Robertson, Burleson and Lee Counties, Texas. The Company has nine horizontal Eagle Ford wells in this area that have been on production for 30 or more days. The peak 30-day production rate for these wells has averaged 574 BOE per day (96% oil).

Clayton Williams' First Quarter Highlights

•  Overall Q1 production down 250 boe/d from analyst estimates
•  47% production decrease in divested Austin Chalk and Eagle Ford assets in Q1 2014 compared to Q1 2013
• Q1 drilling and completion complications in Reeves and Burleson Counties in Texas accounted for production delays of 400 boe/d
• Oil and NGL production increased to 2,756 b/d and 378 b/d consecutively across portfolio in Q1 2014
• Gas production decreased 455 Mcf/d in Q1 2014

Read more at claytonwilliams.com