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

East Texas Bossier

The Company has perforated and fracture-stimulated the Sunny Unit #1, a 17,300-foot exploratory well in Burleson County, Texas. The well was drilled to the Deep Bossier formation, and completed in the middle Bossier sands. The Company is currently flow testing the well to determine if the well is capable of producing hydrocarbons in commercial quantities. To date, the Company has incurred drilling and completion costs of approximately $17.7 million on this well (100% working interest).

South Louisiana

The Company today also announced that it has abandoned the drilling of the Miami Corp. #1, its exploratory test well in the Bayou Sale field on its Liger Prospect in St. Mary Parish, Louisiana, due to down hole mechanical problems.

After drilling to a depth of approximately 12,500 feet, an attempt was made to run intermediate casing. During that operation, the casing became stuck in the well bore at approximately 7,000 feet, and subsequent attempts to free it from the well bore were unsuccessful.

The Company has moved the drilling rig approximately 20 feet north of the current location and is drilling the Miami Corp. #2 as a replacement well. The Company has modified the drilling plan to address the problems encountered in the first well, and will target the same formation in the lower Miocene sands at an approximate depth of 17,500 feet. The Company estimates that the combined drilling cost of both wells will be approximately $15 million (net to the Company's interest). The Company and BP America Production Company will each own a 50% working interest in any production established by this well.

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