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Energy

Clayton Williams Unwinds (CWEI)

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Published
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Clayton Williams Energy (NASDAQ:CWEI) is a small-cap oil & gas E&P company that has seen its share price fall by more than 70% a 52-week high of $122.50 to close yesterday at $33.81. The company announced that it has terminated "substantially all" of its oil and gas derivative contracts for $99.3 million in cash.

The company had swaps out through 2010 on about 2.6 million barrels ofoil and 15.2 million cubic feet of natural gas. The natural gas swapswere priced around $8.50/thousand cubic feet, and about 1.6 millionbarrels of oil through 2009 was priced at around $88/b. The swaps onoil for 2010 were priced at $97.75/b. The buyer got a pretty good deal.

But Clayton Williams, like virtually every other producer, needs cash.The company has more than $387 million in long-term debt and less than$40 million in cash and short-term investments. The company’s earningsfor the third quarter were 60% lower than analysts’ estimates.

Estimates for the current quarter had dropped from $2.76/share to$1.97/share. That’s still more than three times third quarter actuals.The $99 million should help.

Paul Ausick
December 9, 2009

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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