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Press release from Business Wire

Clayton Williams Energy, Inc. Provides Operations Update

Thursday, July 26, 2012

Clayton Williams Energy, Inc. Provides Operations Update08:00 EDT Thursday, July 26, 2012 MIDLAND, Texas (Business Wire) -- Clayton Williams Energy, Inc. (the “Company”) (NASDAQ:CWEI) today provided an update on its Permian Basin and Austin Chalk/Eagle Ford operations. The Company is currently running seven rigs – five rigs in the Delaware Basin, with four drilling vertical Wolfbone wells and one drilling horizontal Wolfcamp wells, and two in Andrews County drilling vertical Wolfberry wells. The Company currently plans to continue this program for the remainder of 2012. The Company's primary focus is the Delaware Basin in Reeves, Ward, Winkler and Loving Counties, Texas. Since its entry into this emerging, oil-rich resource play in 2010, the Company has accumulated leases covering approximately 65,000 net acres. To date, the Company has conducted drilling operations on 67 wells in Reeves County: 59 vertical Wolfbone wells and eight horizontal wells targeting multiple Bone Springs/Wolfcamp intervals. The peak 30-day production for all vertical wells spud in 2012 has averaged 158 barrels of oil. Excluding two wells that were not adequately stimulated due to mechanical constraints, the peak 30-day production for three of the five horizontal wells has averaged 307 barrels of oil per day. The Company has made significant progress toward construction of mid-stream facilities in Reeves County. Currently, more than half of the Company's wells in Reeves County are connected to gas pipeline facilities, and the Company expects to have most of its producing wells connected to pipelines by the end of the third quarter. In addition, the Company is nearing completion of an oil pipeline and a salt water disposal system for the area. The Company drilled and completed the Balcar Unit #1, a horizontal Eagle Ford well in Lee County, Texas. Although initial flow rates from the well are encouraging, more production data is needed before the Company can determine if the well is commercially viable. The Company has a significant acreage position in the Giddings Field that may be prospective for Eagle Ford production if the Balcar Unit #1 is successful. Clayton Williams Energy, Inc. is an independent energy company located in Midland, Texas. This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.All statements, other than statements of historical or current facts, that address activities, events, outcomes and other matters that we plan, expect, intend, assume, believe, budget, predict, forecast, project, estimate or anticipate (and other similar expressions) will, should or may occur in the future are forward-looking statements.These forward-looking statements are based on management's current belief, based on currently available information, as to the outcome and timing of future events.The Company cautions that its future natural gas and liquids production, revenues, cash flows, liquidity, plans for future operations, expenses, outlook for oil and natural gas prices, timing of capital expenditures and other forward-looking statements are subject to all of the risks and uncertainties, many of which are beyond our control, incident to the exploration for and development, production and marketing of oil and gas.These risks include, but are not limited to, the possibility of unsuccessful exploration and development drilling activities, our ability to replace and sustain production, commodity price volatility, domestic and worldwide economic conditions, the availability of capital on economic terms to fund our capital expenditures and acquisitions, our level of indebtedness, the impact of the current economic recession on our business operations, financial condition and ability to raise capital, declines in the value of our oil and gas properties resulting in a decrease in our borrowing base under our credit facility and impairments, the ability of financial counterparties to perform or fulfill their obligations under existing agreements, the uncertainty inherent in estimating proved oil and gas reserves and in projecting future rates of production and timing of development expenditures, drilling and other operating risks, lack of availability of goods and services, regulatory and environmental risks associated with drilling and production activities, the adverse effects of changes in applicable tax, environmental and other regulatory legislation, and other risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission.The Company undertakes no obligation to publicly update or revise any forward-looking statements.Clayton Williams Energy, Inc.Patti Hollums, 432-688-3419Director of Investor Relationse-mail: cwei@claytonwilliams.comwebsite: www.claytonwilliams.comorMichael L. Pollard, 432-688-3029Chief Financial Officer