Clayton Williams Energy, Inc. has closed the sale of oil and gas assets in three east Texas fields to Samson Lone Star Limited Partnership. The assets were purchased in 1998 from Sonat Exploration Company for approximately $46.5 million. The Company owned 10% of the assets and a subsidiary was general partner of a limited partnership with an affiliate of GE Capital Oil & Gas, which owned the remaining 90%. Pursuant to the limited partnership agreement, the Company's general partnership interest increased from 1% to 35% after the limited partner received a pre-agreed rate of return.
The Company will utilize the net proceeds from the sale, which is expected to total $15.8 million, to reduce its outstanding bank debt, and for general corporate purposes. The Company also expects to report a third quarter gain of approximately $10.5 million on the transaction.