Clayton Williams Energy Provides Operations Update
Clayton Williams Energy has completed drilling operations on the State Lease 16901 #1 well in South Louisiana last month. The well is currently shut-in waiting on pipeline connections and is projected to begin production in April 2003 at an initial rate of 3,500 gross (2,400 net) Mcf of gas per day. The Company plans to drill two more exploratory wells and one developmental well in this area during the first quarter of 2003, and may drill up to five additional exploratory wells and two additional developmental wells during the following quarter. The developmental wells are locations that had been assigned proven reserves in connection with the Company's acquisition of the Romere Pass field in July 2002.
In January 2003, the Company completed the Cotropia Gas Unit #1, a 16,400-foot Cotton Valley Reef Complex well in Robertson County, Texas. This well is currently producing 25,000 gross (19,000 net) Mcf of gas per day at a flowing tubing pressure of 7,350 psi. Due to declines in the flowing tubing pressures, more production history is needed before the Company can make an informed estimate of this well's ultimate production and reserves.
In February 2003, the Company abandoned drilling operations on the Scamardo Gas Unit #1 RE, a sidetrack re-entry drilled to test an adjacent target formation. Since the formation was not productive, the Company plans to plug and abandon this well and write-off all capitalized costs associated with it. This will result in charges against earnings of approximately $5.4 million in the fourth quarter of 2002 and $1.8 million in the first quarter of 2003.
The Company also began drilling the Muse-Patranella Gas Unit #1, a 17,000-foot Reef Complex well, in January 2003. Drilling operations on this well, located about a mile from the Lee Fazzino #2, should be completed during the second quarter of 2003.