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Clayton Williams Energy, Inc. (the “Company”) (CWEI) today provided an update on recent transactions.

Southern Delaware Basin

The Company reported that it had completed a swap of non-producing acreage in the core of its Southern Delaware position in Reeves County, Texas with the operating subsidiary of Concho Resources, Inc. (“Concho”) (CXO). Substantially all of the acreage subject to this agreement was associated with a farm out agreement between the Company and Chesapeake Energy Corporation through which the Company earned a 75% interest in certain leases (the “Leases”). Subsequently, Concho acquired the remaining 25% of the Leases.

The Company and Concho agreed to exchange net acre for net acre across the Company’s entire Reeves County position. As a result of the exchange, the Company acquired Concho’s 25% working interest in certain Leases, and the Company conveyed its 75% working interest in certain Leases to Concho.

The Company’s acreage position remained at approximately 65,000 net acres, but its working interest in the Leases increased from 75% to 100% throughout most of its largely contiguous acreage block.

All lease rights transferred under this agreement were limited to undrilled acreage and excluded reserves and production attributable to existing wells. The interest in the existing producing wells will remain the same.

“This agreement was highly beneficial to both companies,” stated Mel Riggs, President of the Company. “Each now has a higher degree of operational control over the development of its respective acreage positions. This enables us to determine the timing, targets, well design and approach for development of this very valuable resource in the best interest of our shareholders.”

Giddings Eagle Ford

The Company also announced that it sold certain acreage in Burleson County, Texas (the “Acreage”) to an undisclosed buyer for cash consideration of $21.8 million in December 2015. The Acreage, located east of the Company’s contiguous acreage block, was sold under a three-year term assignment that may be extended beyond the stated term as long as the buyer maintains a 180-day continuous development program on the Acreage. The Company retained its rights to all depths and formations other than the Eagle Ford formation and also retained its interest in acreage and production in all wells currently situated on the Acreage. The Company also reserved an overriding royalty interest to the extent the net revenue interest of any assigned lease exceeds 75%. Proceeds from the sale were used to reduce outstanding borrowings on the Company’s bank credit facility.

Hedging Activities

On January 6, 2016, the Company entered into a swap agreement covering the sale of 814,500 barrels of its oil production during the first half of 2016 at $40.25 per barrel (WTI-NYMEX). In connection with that agreement, the Company granted the counterparty the option to extend the agreement to cover an additional 738,500 barrels of oil production during the second half of 2016 at the same price of $40.25 per barrel. The option to extend expires on June 30, 2016.

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