Clayton Williams Energy Sells $32 Million in Common Stock

Clayton Williams Energy has executed agreements for the sale of 1,400,000 shares of its common stock to certain institutional investors at a price of $23.00 per share in a private placement that will raise approximately $32 million in gross proceeds to the Company. The proceeds after normal transaction costs will be used to partially repay debt incurred to finance the acquisition of Southwest Royalties Inc. JP Morgan Securities Inc. served as the sole placement agent for the transaction. The stock purchase agreement is subject to normal closing contingencies including the acquisition of Southwest Royalties Inc., which is expected to close on Friday, May 21st. The common stock private placement will close on Tuesday, May 25th.

"We are pleased with the attention and support CWEI received from a variety of current and new institutional investors in this private placement," stated Clayton W. Williams, Jr., President and CEO of CWEI. "This additional capital positions the Company to acquire Southwest Royalties and reduce its bank financing for the acquisition."

The shares of common stock sold in the private placement were not registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act. The Company has agreed to file a registration statement with the SEC covering resales of the shares sold in the private placement. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

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