Guarantor Financial Information

In March and April 2011, we issued $350 million of aggregate principal amount of 2019 Senior Notes (see Note 3). Presented below is condensed consolidated financial information of CWEI (“Issuer”) and the Issuer’s material wholly owned subsidiaries, all of which have jointly and severally, irrevocably and unconditionally guaranteed the performance and payment when due of all obligations under the 2019 Senior Notes and are referred to as “Guarantor Subsidiaries” in the following condensed consolidating financial statements. The guarantee by a Guarantor Subsidiary of the 2019 Senior Notes may be released under certain customary circumstances as set forth in the indenture.

The financial information which follows sets forth our condensed consolidating financial statements as of and for the periods indicated.

Condensed Consolidating Balance Sheet December 31, 2012 (Dollars in thousands)

	Issuer		Guarantor Subsidiaries		Adjustments/ Eliminations			Consolidated
Current assets	$	133,080	$	224,210	$	(232,820	)	$	124,470
Property and equipment, net	1,053,453		366,905		—			1,420,358
Investments in subsidiaries	305,899		—		(305,899		)	—
Fair value of derivatives	4,236		—		—			4,236
Other assets	12,112		13,408		—			25,520
Total assets	$	1,508,780	$	604,523	$	(538,719	)	$	1,574,584
Current liabilities	$	241,200	$	112,534	$	(232,820	)	$	120,914
Non-current liabilities:
Long-term debt	809,585		—		—			809,585
Deferred income taxes	143,699		117,950		(105,819		)	155,830
Other	41,499		68,140		—			109,639
	994,783		186,090		(105,819		)	1,075,054
Equity	272,797		305,899		(200,080		)	378,616
Total liabilities and equity	$	1,508,780	$	604,523	$	(538,719	)	$	1,574,584

Condensed Consolidating Balance Sheet December 31, 2011 (Dollars in thousands)

	Issuer		Guarantor Subsidiaries		Adjustments/ Eliminations			Consolidated
Current assets	$	142,102	$	164,515	$	(163,674	)	$	142,943
Property and equipment, net	737,562		329,989		—			1,067,551
Investments in subsidiaries	271,342		—		(271,342		)	—
Other assets	13,538		2,239		—			15,777
Total assets	$	1,164,544	$	496,743	$	(435,016	)	$	1,226,271
Current liabilities	$	233,729	$	86,175	$	(163,674	)	$	156,230
Non-current liabilities:
Long-term debt	529,535		—		—			529,535
Fair value of derivatives	494		—		—			494
Deferred income taxes	141,923		111,662		(119,376		)	134,209
Other	34,738		27,564		—			62,302
	706,690		139,226		(119,376		)	726,540
Equity	224,125		271,342		(151,966		)	343,501
Total liabilities and equity	$	1,164,544	$	496,743	$	(435,016	)	$	1,226,271

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Year Ended December 31, 2012 (Dollars in thousands)

	Issuer			Guarantor Subsidiaries			Adjustments/ Eliminations			Consolidated
Total revenue	$	291,782		$	132,690		$	(1,420	)	$	423,052
Costs and expenses	230,033			114,646			(1,420		)	343,259
Operating income (loss)	61,749			18,044			—			79,793
Other income (expense)	(25,495		)	2,813			—			(22,682		)
Equity in earnings of subsidiaries	13,557			—			(13,557		)	—
Income tax (expense) benefit	(14,708		)	(7,300		)	—			(22,008		)
Net income (loss)	$	35,103		$	13,557		$	(13,557	)	$	35,103

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Year Ended December 31, 2011 (Dollars in thousands)

	Issuer			Guarantor Subsidiaries			Adjustments/ Eliminations			Consolidated
Total revenue	$	280,359		$	147,015		$	(946	)	$	426,428
Costs and expenses	191,012			104,557			(946		)	294,623
Operating income (loss)	89,347			42,458			—			131,805
Other income (expense)	6,816			7,344			—			14,160
Equity in earnings of subsidiaries	32,371			—			(32,371		)	—
Income tax (expense) benefit	(34,711		)	(17,431		)	—			(52,142		)
Net income (loss)	$	93,823		$	32,371		$	(32,371	)	$	93,823

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Year Ended December 31, 2010 (Dollars in thousands)

	Issuer			Guarantor Subsidiaries			Adjustments/ Eliminations			Consolidated
Total revenue	$	209,046		$	123,396		$	(811	)	$	331,631
Costs and expenses	166,846			87,652			(811		)	253,687
Operating income (loss)	42,200			35,744			—			77,944
Other income (expense)	(26,801		)	6,429			—			(20,372		)
Equity in earnings of subsidiaries	27,412			—			(27,412		)	—
Income tax (expense) benefit	(5,873		)	(14,761		)	—			(20,634		)
Net income (loss)	$	36,938		$	27,412		$	(27,412	)	$	36,938

Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2012 (Dollars in thousands)

	Issuer			Guarantor Subsidiaries			Adjustments/ Eliminations			Consolidated
Operating activities	$	92,521		$	89,923		$	6,778		$	189,222
Investing activities	(432,433		)	(36,822		)	(6,778		)	(476,033		)
Financing activities	333,703			(53,691		)	—			280,012
Net increase (decrease) in cash and cash equivalents	(6,209		)	(590		)	—			(6,799		)
Cash at the beginning of the period	12,239			5,286			—			17,525
Cash at end of the period	$	6,030		$	4,696		$	—		$	10,726

Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2011 (Dollars in thousands)

	Issuer			Guarantor Subsidiaries			Adjustments/ Eliminations			Consolidated
Operating activities	$	209,886		$	60,319		$	9,842		$	280,047
Investing activities	(389,681		)	(5,390		)	(9,842		)	(404,913		)
Financing activities	186,994			(53,323		)	—			133,671
Net increase (decrease) in cash and cash equivalents	7,199			1,606			—			8,805
Cash at the beginning of the period	5,040			3,680			—			8,720
Cash at end of the period	$	12,239		$	5,286		$	—		$	17,525

Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2010 (Dollars in thousands)

	Issuer			Guarantor Subsidiaries			Adjustments/ Eliminations			Consolidated
Operating activities	$	114,960		$	84,947		$	8,344		$	208,251
Investing activities	(161,742		)	(33,697		)	(8,344		)	(203,783		)
Financing activities	39,983			(49,744		)	—			(9,761		)
Net increase (decrease) in cash and cash equivalents	(6,799		)	1,506			—			(5,293		)
Cash at the beginning of the period	11,839			2,174			—			14,013
Cash at end of the period	$	5,040		$	3,680		$	—		$	8,720