Clayton Williams Energy Updates Guidance for Effects of Hurricane Katrina

Clayton Williams Energy updated its financial guidance for the effects of Hurricane Katrina on its Louisiana oil and gas production. As previously announced, substantially all of its Louisiana production was in the path of Katrina and has been shut-in since late August. Early damage assessments indicate that all of the Company's facilities could be repaired within 3 to 8 weeks if field services and supplies continue to be available. The Company's current estimate for repairs is $1.5 million, the majority of which will be covered by insurance. However, most of the Company's production flows through pipeline and plant facilities operated by others. Estimates of time needed to repair the various facilities generally range from three to seven months.

Based on our assessment, we are adjusting our previously issued financial guidance disclosures for the effects of Hurricane Katrina on our company-wide oil and gas production, as follows:

             Company-wide Average Daily Production

                              Third Qtr           Fourth Qtr
                          ------------------ --------------------
Gas (Mcf):
Previous estimate          45,500 to 49,500    44,500 to 48,500
Current estimate           40,500 to 44,500    31,000 to 35,000

Estimated percentage
  reduction                     10.5%               29.0%

Oil (Bbls):
Previous estimate           6,350 to 6,550      6,225 to 6,425
Current estimate            6,000 to 6,200      5,225 to 5,425

Estimated percentage
  reduction                      5.4%               15.8%