The Company currently plans to run four rigs in 2013 – two rigs drilling vertical and horizontal wells in the Delaware Basin Wolfbone play, one rig drilling vertical Wolfberry wells in Andrews County, and one rig drilling horizontal Eagle Ford wells in southeast Texas. Even if none of the asset sales or joint venture arrangements discussed above is consummated in 2013, the Company expects to have adequate liquidity to permit continued drilling at this level throughout the year.Delaware Basin The Company currently holds approximately 85,000 net acres in the active Wolfbone resource play in Reeves, Loving, Ward and Winkler Counties, and may earn up to 25,000 additional acres through future drilling commitments under an existing farmout arrangement. Geology in the Delaware Basin consists of multiple stacked pay zones with both over-pressured and normal-pressured intervals. To date, the Company has focused on the over-pressured intervals, having drilled 82 wells in the area: 69 vertical Wolfbone wells and 13 horizontal wells targeting multiple Bone Springs/Wolfcamp intervals. Net daily production for the fourth quarter of 2012 averaged 2,432 BOE (1,897 barrels of oil, 319 barrels of NGL and 1,297 Mcf of natural gas), up 382% from 636 BOE for the fourth quarter of 2011. Current pre-drill economics are based on gross estimated ultimate reserves (EURs) of 170 to 200 MBO for vertical completions and 300 to 350 MBOE for horizontal completions. Gross well costs are currently expected to be approximately $3.3 million for vertical completions and $6.5 million for horizontal completions. The Company has completed construction on 84 miles of oil, gas and water disposal pipelines in Reeves County. These pipelines are capable of transporting up to 20,000 barrels of oil and 25,000 Mcf of natural gas per day to the applicable sales points and up to 20,000 barrels per day of produced water to the Company’s salt water disposal system.
Andrews County WolfberryThe Company currently holds approximately 17,000 net acres in its Wolfberry play in Andrews County. To date, the Company has drilled 185 vertical Wolfberry wells in Andrews County. Net daily production for the fourth quarter of 2012 averaged 2,497 BOE (1,769 barrels of oil, 429 barrels of NGL and 1,794 Mcf of natural gas), down 14% from 2,888 BOE for the fourth quarter of 2011. East Permian Basin Cline Shale/Wolfberry The Company has approximately 37,000 net acres in the emerging Cline Shale play in Glasscock and Sterling Counties. Originally leased as a Wolfberry prospect, the Company has drilled or participated in 22 vertical Wolfberry wells in this area. In 2012, the Company drilled a horizontal Cline Shale well. Although results from this well were disappointing, the Company believes that intervening operational factors may have contributed to the lower than anticipated production performance to date. Eagle Ford Shale The Eagle Ford Shale formation lies immediately beneath the Austin Chalk formation where the Company has approximately 177,000 net acres in production. The Company believes that more than 100,000 net acres in this area may also be prospective for economic Eagle Ford Shale production. Since July 2011, the Company has drilled six horizontal Eagle Ford Shale wells: the Hosek Unit #1, the Ortmann Unit #1 and the Kutac Unit #1 in Wilson County, the Balcar Unit #1 in Lee County, the Scasta Unit #2 in Brazos County and the Sarah Ferrara E Unit #1 in Robertson County. Each of these wells has been or will be completed utilizing large, multi-stage hydraulic frac jobs using about five million pounds of proppant and 100,000 barrels of water. The Company is encouraged by the production results achieved to date, but additional drilling and production data is needed to determine if an Eagle Ford Shale drilling program in this area could be economically viable.
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.