Clayton Williams Energy, Inc. today September 9, 2011 announced that its wholly owned subsidiary, Southwest Royalties, Inc, has filed preliminary proxy statements with the Securities and Exchange Commission (“SEC”) related to proposed mergers between SWR and six partnerships of which SWR is the general partner (the “Public Partnerships”). As currently proposed, each Public Partnership that approves the merger would merge into SWR, and the partnership interests of such Public Partnership, other than those interests owned by SWR, would be converted into the right to receive cash. SWR would not receive any cash payment for its partnership interests in the Public Partnerships; however, as a result of each merger, SWR would acquire 100% of the assets and liabilities of the Public Partnerships.

CWEI and SWR also intend to propose mergers between SWR and 18 additional partnerships of which SWR is the general partner. CWEI believes that the terms and conditions of the other mergers would be substantially similar to the terms and conditions of the mergers for the Public Partnerships described in the preliminary proxy statements. CWEI expects that the merger agreements would be finalized and signed promptly after clearing SEC staff comments to the preliminary proxy statements for the Public Partnerships. Each of the proposed mergers would be subject to significant conditions described in the preliminary proxy statements, including approval by the limited partners of each partnership.

As currently proposed, the amount that SWR would pay for the limited partnership interests in the mergers would be based on each partnership’s reserves value, net working capital and net asset retirement obligations as of June 30, 2011. The reserves value would be derived from the present value of estimated future net cash flows from each partnership’s oil and gas reserves based on a 12-month historical average of the NYMEX closing prices for oil and gas as of a date reasonably close to the mailing date of the proxy statements. The consideration would be 100% cash.

Substantially all of the partnerships’ properties are located in the Permian Basin of West Texas and Southeastern New Mexico where over 70% of CWEI’s oil and gas reserves are concentrated. CWEI expects to obtain the funds to finance the aggregate merger consideration by conveying a volumetric production payment on certain properties acquired in the proposed mergers to a third party. The final terms of the VPP would not be determined until immediately prior to the closing of the mergers. CWEI does not expect the closing of the mergers to be conditioned on receiving proceeds from the VPP or any other financing condition.

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