Clayton Williams Energy Closes on Andrews County Wolfberry Assets

Clayton Williams Energy, Inc. announced it has closed the previously reported transaction to monetize its Wolfberry oil and gas reserves, leasehold interests and facilities located in Andrews County, Texas.

At the closing, the company contributed 5 percent of the assets to a newly formed limited partnership in exchange for a 5 percent general partner interest, and a financial investor contributed cash of $215.2 million to the limited partnership in exchange for a 95 percent limited partnership interest.

The limited partnership then purchased 95 percent of the assets from the company for $215.2 million, subject to customary closing adjustments, with $26.5 million being placed in escrow pending resolution of certain title requirements and $188.7 million being paid to the company.

If the title requirements are not satisfied, waived or extended within 180 days, the affected properties will be conveyed back to the company and the escrowed funds will be returned to the limited partner. Management of the company believes that the defects will be cured timely.

Effective with the closing, the borrowing base under the company’s revolving bank credit facility was reduced from $585 million to $470 million to account for the release of collateral, providing the company with approximately $100 million of additional availability under the facility.

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