Clayton Williams Pleased with Terryville Drilling Results

Clayton Williams Energy provided an update on its exploration and development activities by area.

North Louisiana

The Company continues to be encouraged by the results of its drilling program in the Terryville prospect in Lincoln Parish, where it has drilled a total of 11 wells in the Cotton Valley/Gray sand intervals since mid-2006. Of the total wells drilled, five are currently producing at a combined daily rate of 12,300 Mcf gross (7,640 net) of gas and 270 barrels gross (172 net) of oil. In addition, two wells have been drilled and are in the process of being completed. The Company is currently drilling three development wells in the prospect and plans to drill up to seven additional development wells this year.

As previously announced in June 2007, the Company temporarily abandoned the David Barton #1, an exploratory well in its Winnsboro prospect in Richland Parish prior to reaching the target interval. Based on its geological evaluation, the Company recorded a pre-tax charge of $8.6 million related to the abandonment of this well in the second quarter of 2007. The Company may drill an offset to the Barton well in late 2007 or 2008 in order to test the pressured Bossier interval in this area. The Company has approximately 188,000 acres leased for Bossier drilling in North Louisiana.

"We are pleased with the recent Cotton Valley/Gray sand successes in the Terryville area and remain hopeful about our Bossier prospects in North Louisiana, as well," stated Clayton W. Williams, Jr., the Company's President and CEO.

East Texas Bossier

The Company continues to drill the Big Bill Simpson #1, a 19,000-foot exploratory well in Leon County (70% working interest), and the Margarita #1, a 20,000-foot exploratory well in Robertson County (100% working interest), both targeting the Bossier formation. Both wells have set intermediate casing and are expected to reach total depth in the last half of 2007. Depending upon drilling results of these two wells, the Company may begin drilling operations on additional East Texas Bossier wells in 2007.

Other

The Company currently plans to keep one rig actively drilling developmental wells in the Permian Basin. In addition, the Company has initiated an in-fill drilling program on its core acreage block in the Austin Chalk (Trend) area and plans to keep one rig continuously working in this area for the near term.

Sale of Assets

The Company has contracted with the Oil & Gas Clearinghouse to offer for sale its production in the South Louisiana area, the majority of which is located in Plaquemines Parish. The Company operates over 30 wells in the area, with a combined average net production of approximately 35,000 Mcf of gas per day and 1,600 barrels of oil per day.

The Company is also offering for sale two 2,000 HP drilling rigs that are currently under construction. To date, the Company has invested approximately $23 million in these rigs. In addition, Larclay JV, a joint venture with Lariat Services, Inc., has offered for sale both of its 2,000 HP rigs. The remaining ten drilling rigs in the Larclay fleet are actively drilling for either another operator or the Company.

If adequate consideration is received for these assets, the Company intends to use the net proceeds from the sales to reduce the balance outstanding on its revolving bank credit facility. Larclay JV will also reduce its indebtedness with any net proceeds received upon the sale of its drilling rigs.

Clayton Williams Energy, Inc. is an independent energy company located in Midland, Texas.

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