Clayton Williams Updates Operations in Mississippi

Clayton Williams Energy has drilled, cored and logged the Stones River formation in its sidetrack hole at Weyerhaeuser No. 1, Webster County. The Company is running pipe to attempt completion by Nov. 1. Based on current geological information, the Company is unable to determine whether the well will be commercially productive. CWEI owns a 99% working interest in this well and has incurred drilling costs to date totaling approximately $8.7 million, net to its interest.

The Company has reached a farm-in agreement with Total covering approximately 8,000 net acres in Oktibbeha County, Miss. The Company plans to spud an exploratory well, Mississippi State University No. 1, on the farm-in acreage targeting the Stones River formation (Ordovician) by Oct. 1. The well will be located approximately 13 miles southeast of the Maben Field, developed by Total. Under the terms of the farm-in, the Company will earn 100% working interest of the well until payout, at which time Total will have the option to back-in for a 35% working interest or retain an overriding royalty position. By completing the farm-in well as a producer, the Company will earn a 65% working interest and be named operator in all remaining land covered by the farm-in agreement.