According to the TRRC, Clayton Williams has produced 189,722bbls, from a half a dozen leases since 2009 in Sterling County. Most of these CWEI leases are still online and producing.
That area appears to be consistent in production, so why is Clayton Williams so smart for drilling it, while many accuse Breitling of being shady by participating in the same productive field?
Since 1/1/2009 Clayton Williams Energy has drilled 299 wells in the Spraberry fields. Those wells have a cumulative production of 6.5 MMBO and 14 BCF. Using a price-based conversion that is 7.2 MMBOE. Currently, the 247 producing wells are non-commercial, but a prudent operator will shut-in the worst wells to keep costs below income. If we generously assume the current production and current decline will continue for another six years, the wells will produce about 10 MMBOE. That’s 33 MBOE per well. Just to estimate the cost of the wells: Lease cost per well, $40 thousand; location and surface equipment cost, $400,000; drilling and completion, $1.75 million, abandonment and restoration, $75 thousand; operating cost over 13 years, $1 million. Total expenditure per well, $3.3 million, before you take into account overhead. OK, $3.3 million per well divided by 33 MBOE is $100 per bbl. Adjusting for an eighth royalty, $114 per bbl. Adjusting for severance tax, $119 per bbl costs.
OK, ok, let’s assume I am high on costs by 50%. That’s $80 per bbl costs.
No, Clayton Williams didn’t exactly hit one out of the park even with a 6 year head start on depletion.
BTW, I never said the farmout or his drilling it was shady. I said that he has a poor track record and exaggerates his involvement in the technical aspects of the industry. In fact, I have said he exaggerates just about everything. He is fast to promote the farmout and slow to comment on poor results.
