----

| (Mark      One) |                                                  |   |
|-----------------|-------------------------------------------------------|--------|
| x               | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) |   |
|            | OF      THE SECURITIES EXCHANGE ACT OF 1934           |   |
|            | For      the quarterly period ended March 31, 2009    |   |

|  ̈ | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d)                                                                                                                                                                            |   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | OF      THE SECURITIES EXCHANGE ACT OF 1934                                                                                                                                                                                       |   |
|   | For      the transition period from                      to                 |   |
|   | Commission      File Number 001-10924                                                                                                                                                                                             |   |

| CLAYTON      WILLIAMS ENERGY, INC.                         |
|------------------------------------------------------------|
| (Exact      name of registrant as specified in itscharter) |

| Delaware                                                            |   | 75-2396863                                |
|---------------------------------------------------------------------|--------|-------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) |   | (I.R.S.      Employer Identification No.) |
| Six      Desta Drive - Suite 6500                                   |   |                                      |
| Midland,      Texas                                                 |   | 79705-5510                                |
| (Address      of principal executive offices)                       |   | (Zip      code)                           |
| Registrant’s      telephone number, including area code:      |   | (432)      682-6324                       |

| Indicate      by check mark whether the registrant (1) has filed all reports required to      be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934      during the preceding 12 months (or for such shorter period that the      Registrant was required to file such reports), and (2) has been subject to      such filing requirements for the past 90 days. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                              | x    Yes |   |  ̈No |   |

| Indicate      by check mark whether the registrant has submitted electronically and      posted on its corporate Web site, if any, every Interactive Data File      required to be submitted and posted pursuant to Rule 405 of Regulation S-T      (§232.405 of this chapter) during the preceding 12 months (or for such      shorter period that the registrant was required to submit and post such      files). |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                      |  ̈    Yes |   |  ̈No |   |

| Indicate      by check mark whether the registrant is a large accelerated filer, an      accelerated filer, a non-accelerated filer, or a smaller reporting      company.  See definitions of “large accelerated filer,”      “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the      Exchange Act. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                    | Large      accelerated filer   ̈ |   | Accelerated      filer  x |   |
|                                                                                                                                                                                                                                                                                                                                                                    | Non-accelerated      filer   ̈ |   | Smaller      reporting company  ̈ |   |

| Indicate      by check mark whether the registrant is a shell company (as defined in      Rule 12b-2 of the Exchange Act). |
|----------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                       |  ̈    Yes |   | xNo |   |

| There      were 12,135,292 shares of Common Stock, $.10 par value, of the registrant      outstanding as of May 4, 2009. |
|-------------------------------------------------------------------------------------------------------------------------------|

----

| PART      I.  FINANCIAL INFORMATION |
|-----------------------------------------------|
|                                          |   | Page |
|                                          |   |   |   |
| Item 1.                                       |     Financial      Statements |   |   |
|                                          |   |   |   |
|                                          | Consolidated Balance Sheets as of March 31,      2009 |   |   |
|                                          | and December 31,      2008                                                                                                 | 3 |   |
|                                          |   |   |   |
|                                          | Consolidated Statements of Operations for the three      months |   |   |
|                                          | ended March 31, 2009 and      2008                                                                                                 | 5 |   |
|                                          |   |   |   |
|                                          | Consolidated Statement of Equity for the three      months |   |   |
|                                          | ended March 31,      2009                                                                                                 | 6 |   |
|                                          |   |   |   |
|                                          | Consolidated Statements of Cash Flows for the three      months |   |   |
|                                          | ended March 31, 2009 and      2008                                                                                                 | 7 |   |
|                                          |   |   |   |
|                                          | Notes to Consolidated Financial Statements | 8 |   |
|                                          |   |   |   |
| Item2.                                        |     Management’s Discussion and Analysis of      Financial |   |   |
|                                          | Condition and Results of      Operations                                                                                                 | 23 |   |
|                                          |   |   |   |
| Item3.                                        | Quantitative and Qualitative      Disclosures About Market Risks | 38 |   |
|                                          |   |   |   |
| Item4.                                        | Controls and      Procedures | 40 |   |
|                                          |   |   |   |
|                                          |   |   |   |
| PART      II.  OTHER INFORMATION    |
| Item    1A.                                   | Risk      Factors | 41 |   |
|                                          |   |   |   |
| Item6.                                        | Exhibits | 41 |   |
|                                          |   |   |   |
|                                          | Signatures | 42 |   |

----

CLAYTON WILLIAMS 

| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | March      31, |   |   | December      31, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2009 |   |   | 2008 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | (Unaudited) |   |   |   |   |
| CURRENT      ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |
| Cash and cash      equivalents                                                                                                                   |   | $ | 15,816 |   |   | $ | 41,199 |   |
| Accounts      receivable:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Oil and gas      sales                                                                                                                                                    |   |   | 19,313 |   |   |   | 26,009 |   |
| Joint interest and other,      net                                                                                                                                        |   |   | 10,569 |   |   |   | 14,349 |   |
| Affiliates                                                                                                                                                                |   |   | 599 |   |   |   | 227 |   |
| Inventory                                                                                                                                        |   |   | 22,723 |   |   |   | 20,052 |   |
| Deferred income      taxes                                                                                                                       |   |   | 3,637 |   |   |   | 3,637 |   |
| Prepaids and      other                                                                                                                          |   |   | 17,889 |   |   |   | 20,011 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 90,546 |   |   |   | 125,484 |   |
| PROPERTY      AND EQUIPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |
| Oil and gas properties,      successful efforts      method                                                                                      |   |   | 1,548,566 |   |   |   | 1,526,473 |   |
| Natural gas gathering and      processing      systems                                                                                           |   |   | 17,816 |   |   |   | 17,816 |   |
| Contract drilling      equipment                                                                                                                 |   |   | 91,142 |   |   |   | 91,151 |   |
| Other                                                                                                                                            |   |   | 14,732 |   |   |   | 14,954 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 1,672,256 |   |   |   | 1,650,394 |   |
| Less accumulated depreciation,      depletion and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | (877,798 | ) |   |   | (840,366 | ) |
| Property and equipment,      net                                                                                                                                          |   |   | 794,458 |   |   |   | 810,028 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| OTHER      ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Debt issue costs,      net                                                                                                                       |   |   | 5,898 |   |   |   | 6,225 |   |
| Fair value of      derivatives                                                                                                                   |   |   | 3,416 |   |   |   | - |   |
| Other                                                                                                                                            |   |   | 1,787 |   |   |   | 1,672 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 11,101 |   |   |   | 7,897 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $ | 896,105 |   |   | $ | 943,409 |   |

----

ONSOLI

| LIABILITIES      AND EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | March      31, |   |   | December      31, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 2009 |   |   | 2008 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | (Unaudited) |   |   |   |   |
| CURRENT      LIABILITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |
| Accounts    payable:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |
| Trade                                                                                                                                                        |   | $ | 43,836 |   |   | $ | 67,189 |   |
| Oil and gas      sales                                                                                                                                       |   |   | 26,457 |   |   |   | 24,702 |   |
| Affiliates                                                                                                                                                   |   |   | 1,052 |   |   |   | 1,627 |   |
| Current maturities of      long-term      debt                                                                                      |   |   | 18,750 |   |   |   | 18,750 |   |
| Fair value of      derivatives                                                                                                      |   |   | 2,037 |   |   |   | - |   |
| Accrued liabilities and      other                                                                                                  |   |   | 6,094 |   |   |   | 10,609 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 98,226 |   |   |   | 122,877 |   |
| NON-CURRENT      LIABILITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Long-term      debt                                                                                                                 |   |   | 356,938 |   |   |   | 347,225 |   |
| Deferred income      taxes                                                                                                          |   |   | 108,032 |   |   |   | 120,414 |   |
| Other                                                                                                                               |   |   | 33,795 |   |   |   | 32,617 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 498,765 |   |   |   | 500,256 |   |
| COMMITMENTS      AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |
| EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| Preferred stock, par value      $.10 per share, authorized – 3,000,000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
|  shares; none      issued                                                                                                      |   |   | - |   |   |   | - |   |
| Common stock, par value $.10      per share, authorized – 30,000,000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
|  shares; issued and      outstanding – 12,135,292 shares in 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
|  and 12,115,898 shares in      2008                                                                                            |   |   | 1,214 |   |   |   | 1,212 |   |
| Additional paid-in      capital                                                                                                     |   |   | 137,151 |   |   |   | 137,046 |   |
| Retained      earnings                                                                                                              |   |   | 154,109 |   |   |   | 176,424 |   |
| Total Clayton Williams Energy,      Inc. stockholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | 292,474 |   |   |   | 314,682 |   |
| Noncontrolling interest, net      of      tax                                                                                       |   |   | 6,640 |   |   |   | 5,594 |   |
| Total      equity                                                                                                                                            |   |   | 299,114 |   |   |   | 320,276 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $ | 896,105 |   |   | $ | 943,409 |   |

----

CLAYTON 

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Three      Months Ended |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | March      31,          |    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2009                    |    |   | 2008 |   |
| REVENUES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                    |    |   |   |   |
| Oil and gas      sales                                                                                                                                                 |   | $                       | 50,796  |   |   | $ | 118,919 |   |
| Natural gas      services                                                                                                                                              |   |                    | 1,584   |   |   |   | 2,538 |   |
| Drilling rig      services                                                                                                                                             |   |                    | 5,219   |   |   |   | 14,832 |   |
| Gain on sales of      assets                                                                                                                                           |   |                    | 183     |   |   |   | 569 |   |
| Total      revenues                                                                                                                                                                             |   |                    | 57,782  |   |   |   | 136,858 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                    |    |   |   |   |   |   |
| COSTS      AND EXPENSES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                    |    |   |   |   |   |   |
| Production                                                                                                                                                             |   |                    | 19,063  |   |   |   | 20,579 |   |
| Exploration:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |    |   |   |   |   |   |
| Abandonments and      impairments                                                                                                                                                               |   |                    | 12,412  |   |   |   | 297 |   |
| Seismic and      other                                                                                                                                                                          |   |                    | 4,270   |   |   |   | 3,675 |   |
| Natural gas      services                                                                                                                                              |   |                    | 1,411   |   |   |   | 2,515 |   |
| Drilling rig      services                                                                                                                                             |   |                    | 7,086   |   |   |   | 11,117 |   |
| Depreciation, depletion and      amortization                                                                                                                          |   |                    | 36,465  |   |   |   | 30,273 |   |
| Accretion of abandonment      obligations                                                                                                                              |   |                    | 718     |   |   |   | 530 |   |
| General and      administrative                                                                                                                                        |   |                    | 4,528   |   |   |   | 3,448 |   |
| Loss on sales of assets and      inventory      write-downs                                                                                                            |   |                    | 3,449   |   |   |   | 9 |   |
| Total costs and      expenses                                                                                                                                                                   |   |                    | 89,402  |   |   |   | 72,443 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                    |    |   |   |   |   |   |
| Operating income      (loss)                                                                                                                                                                    |   |                    | (31,620 | ) |   |   | 64,415 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                    |    |   |   |   |   |   |
| OTHER      INCOME (EXPENSE)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                    |    |   |   |   |   |   |
| Interest      expense                                                                                                                                                  |   |                    | (5,438  | ) |   |   | (7,446 | ) |
| Gain (loss) on      derivatives                                                                                                                                        |   |                    | 2,510   |   |   |   | (46,109 | ) |
| Other                                                                                                                                                                  |   |                    | 901     |   |   |   | 655 |   |
| Total other income      (expense)                                                                                                                                                               |   |                    | (2,027  | ) |   |   | (52,900 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                    |    |   |   |   |   |   |
| Income      (loss) before income      taxes                                                                                                   |   |                    | (33,647 | ) |   |   | 11,515 |   |
| Income      tax (expense)      benefit                                                                                                        |   |                    | 12,378  |   |   |   | (4,222 | ) |
| NET      INCOME      (LOSS)                                                                                                                   |   |                    | (21,269 | ) |   |   | 7,293 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                    |    |   |   |   |   |   |
| Less income attributable to      noncontrolling interest, net of tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                    | (1,046  | ) |   |   | (114 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                    |    |   |   |   |   |   |
| NET      INCOME (LOSS) attributable to Clayton Williams Energy,Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                       | (22,315 | ) |   | $ | 7,179 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                    |    |   |   |   |   |   |
| Net      income (loss) per common share attributable to                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                    |    |   |   |   |   |   |
|   Clayton      Williams Energy, Inc. stockholders:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |    |   |   |   |   |   |
| Basic                                                                                                                                                                  |   | $                       | (1.84   | ) |   | $ | .63 |   |
| Diluted                                                                                                                                                                |   | $                       | (1.84   | ) |   | $ | .62 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                    |    |   |   |   |   |   |
| Weighted      average common shares outstanding:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                    |    |   |   |   |   |   |
| Basic                                                                                                                                                                  |   |                    | 12,122  |   |   |   | 11,387 |   |
| Diluted                                                                                                                                                                |   |                    | 12,122  |   |   |   | 11,643 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                    |    |   |   |   |   |   |

----

WILLIAMS 

|                                                                                                                                                                                                                                                                   |   | Clayton      Williams Energy, Inc. Stockholders’ Equity |   |   |       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                                                   |   | Common      Stock                                             |   |   | Additional |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                   |   | No.      of                                                   |   |   | Par        |   |   | Paid-In |   |   | Retained |   |   | Noncontrolling |   |
|                                                                                                                                                                                                                                                                   |   | Shares                                                        |   |   | Value      |   |   | Capital |   |   | Earnings |   |   | Interest |   |
| BALANCE,                                                                                                                                                                                                                                                               |   |                                                          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| December 31,      2008                                         |   |                                                          | 12,116 |   |       | $      | 1,212 |   |   | $ | 137,046 |   |   | $ | 176,424 |   |   | $ | 5,594 |   |
| Net income      (loss)                                                   |   |                                                          | -      |   |       |   | - |   |   |   | - |   |   |   | (22,315 | ) |   |   | 1,046 |   |
| Stock options      exercised                                             |   |                                                          | 19     |   |       |   | 2 |   |   |   | 105 |   |   |   | - |   |   |   | - |   |
| BALANCE,                                                                                                                                                                                                                                                               |   |                                                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March 31,      2009                                            |   |                                                          | 12,135 |   |       | $      | 1,214 |   |   | $ | 137,151 |   |   | $ | 154,109 |   |   | $ | 6,640 |   |

----

CLAYTON 

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Three      Months Ended |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | March      31,          |    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2009                    |    |   | 2008 |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                    |    |   |   |   |
| Net income      (loss)                                                                                                                              |   | $                       | (21,269 | ) |   | $ | 7,293 |   |
| Adjustments to reconcile net      income (loss) to cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                    |    |   |   |   |   |   |
| provided by operating      activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                    |    |   |   |   |   |   |
| Depreciation, depletion and      amortization                                                                                                                                     |   |                    | 36,465  |   |   |   | 30,273 |   |
| Exploration      costs                                                                                                                                                            |   |                    | 12,412  |   |   |   | 297 |   |
| (Gain) loss on sales of assets      and inventory write-downs, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    | 3,266   |   |   |   | (560 | ) |
| Deferred income tax expense      (benefit)                                                                                                                                        |   |                    | (12,382 | ) |   |   | 4,100 |   |
| Non-cash employee      compensation                                                                                                                                               |   |                    | 383     |   |   |   | 342 |   |
| Unrealized (gain) loss on      derivatives                                                                                                                                        |   |                    | (1,379  | ) |   |   | 32,028 |   |
| Settlements on derivatives with      financing elements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                    | -       |   |   |   | 10,415 |   |
| Amortization of debt issue      costs                                                                                                                                             |   |                    | 308     |   |   |   | 346 |   |
| Accretion of abandonment      obligations                                                                                                                                         |   |                    | 718     |   |   |   | 530 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                    |    |   |   |   |   |   |
| Changes in operating working      capital:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                    |    |   |   |   |   |   |
| Accounts      receivable                                                                                                                                                          |   |                    | 10,104  |   |   |   | (13,869 | ) |
| Accounts      payable                                                                                                                                                             |   |                    | (13,407 | ) |   |   | 11,985 |   |
| Other                                                                                                                                                                             |   |                    | (1,928  | ) |   |   | (5,130 | ) |
| Net cash provided by operating      activities                                                                                                                                                                  |   |                    | 13,291  |   |   |   | 78,050 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                    |    |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                    |    |   |   |   |   |   |
| Additions to property and      equipment                                                                                                            |   |                    | (42,626 | ) |   |   | (49,610 | ) |
| Additions to equipment of      Larclay      JV.                                                                                                     |   |                    | -       |   |   |   | (9 | ) |
| Proceeds from sales of      assets                                                                                                                  |   |                    | 259     |   |   |   | 624 |   |
| Change in equipment      inventory                                                                                                                  |   |                    | (6,017  | ) |   |   | (1,620 | ) |
| Other                                                                                                                                               |   |                    | (110    | ) |   |   | 69 |   |
| Net cash used in investing      activities                                                                                                                                                                      |   |                    | (48,494 | ) |   |   | (50,546 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                    |    |   |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                    |    |   |   |   |   |   |
| Proceeds from long-term      debt                                                                                                                   |   |                    | 14,400  |   |   |   | - |   |
| Repayments of long-term      debt                                                                                                                   |   |                    | -       |   |   |   | (10,800 | ) |
| Repayments of long-term debt of      Larclay      JV                                                                                                |   |                    | (4,687  | ) |   |   | (6,562 | ) |
| Proceeds from exercise of stock      options                                                                                                        |   |                    | 107     |   |   |   | 6,452 |   |
| Settlements on derivatives with      financing      elements                                                                                        |   |                    | -       |   |   |   | (10,415 | ) |
| Net cash provided by (used in)      financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                    | 9,820   |   |   |   | (21,325 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                    |    |   |   |   |   |   |
| NET      INCREASE (DECREASE) IN CASH AND                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                    |    |   |   |   |   |   |
| CASH      EQUIVALENTS                                                                                                                     |   |                    | (25,383 | ) |   |   | 6,179 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                    |    |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                    |    |   |   |   |   |   |
| Beginning of      period                                                                                                                            |   |                    | 41,199  |   |   |   | 12,344 |   |
| End of      period                                                                                                                                  |   | $                       | 15,816  |   |   | $ | 18,523 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                    |    |   |   |   |   |   |
| SUPPLEMENTAL      DISCLOSURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                    |    |   |   |   |   |   |
| Cash paid for interest, net of      amounts      capitalized                                                                                        |   | $                       | 9,565   |   |   | $ | 11,628 |   |

----

CLAYTON 

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | March      31,      |    |   | December      31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|---------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | 2009                |    |   | 2008              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | (In      thousands) |    |
| 73⁄4% Senior Notes due      2013                                                                                    |   | $                   | 225,000 |   |              | $      | 225,000 |   |
| Secured bank credit facility,      due May      2012                                                                   |   |                | 108,500 |   |              |   | 94,100 |   |
| Secured term loan of Larclay      JV, due June 2011                                                                                                                                                                                                                                                                                                                                                                                                              |   |                | 34,688  |   |              |   | 39,375 |   |
| Subordinated notes of Larclay      JV(a)                                                                               |   |                | 7,500   |   |              |   | 7,500 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                | 375,688 |   |              |   | 365,975 |   |
| Less current maturities(b)                                                                                             |   |                | (18,750 | )      |              |   | (18,750 | ) |
|                                                                                                                                                                                                                                                                                                                                               |   | $                   | 356,938 |   |              | $      | 347,225 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | March      31,      |   |   | December      31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2009                |   |   | 2008              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | (In      thousands) |   |
| Abandonment      obligations                                                                                    |   | $                   | 33,010 |   |              | $      | 31,737 |   |
| Other taxes      payable                                                                                        |   |                | 144    |   |              |   | 145 |   |
| Other                                                                                                           |   |                | 641    |   |              |   | 735 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                   | 33,795 |   |              | $      | 32,617 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Three      Months Ended |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | March      31,          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2009                    |   |   | 2008 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | (In      thousands)     |   |
| Beginning of      period                                                                                               |   | $                       | 31,737 |   |   | $ | 30,994 |   |
| Additional abandonment      obligations from new      wells                                                                                |   |                    | 573    |   |   |   | 68 |   |
| Sales of      properties                                                                                                                   |   |                    | (18    | ) |   |   | (355 | ) |
| Accretion      expense                                                                                                                     |   |                    | 718    |   |   |   | 530 |   |
| End of      period                                                                                                     |   | $                       | 33,010 |   |   | $ | 31,237 |   |

----

|                                                                                                                                                         |   |   |    |   |     |   |   | Weighted    |   |   |           |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|----------|--------|--------|-------------|--------|--------|----------------|--------|
|                                                                                                                                                         |   |   |    |   | Weighted |   |   | Average     |   |   |           |   |
|                                                                                                                                                         |   |   |    |   | Average  |   |   | Remaining   |   |   | Aggregate      |   |
|                                                                                                                                                         |   |   |    |   | Exercise |   |   | Contractual |   |   | Intrinsic      |   |
|                                                                                                                                                         |   | Shares |    |   | Price    |   |   | Term        |   |   | Value      (a) |   |
| Outstanding      at January 1, 2009                                                                                                                          |   |   | 53,638  |   |     | $      | 15.20  |        |   |   |           |   |   |   |
| Exercised (b)                                                                                                                                                |   |   | (19,394 | )      |     | $      | 5.50   |        |   |   |           |   |   |   |
| Outstanding      at March 31, 2009                                                                                                                           |   |   | 34,244  |   |     | $      | 20.70  |        |   |   | 3.74           |   |   | $ | 292,493 |   |
|                                                                                                                                                         |   |   |    |   |     |   |   |        |   |   |           |   |   |   |   |   |
| Vested      at March 31, 2009                                                                                                                                |   |   | 34,244  |   |     | $      | 20.70  |        |   |   | 3.74           |   |   | $ | 292,493 |   |
| Exercisable      at March 31, 2009                                                                                                                           |   |   | 34,244  |   |     | $      | 20.70  |        |   |   | 3.74           |   |   | $ | 292,493 |   |
|                            |   |   |    |   |     |   |   |        |   |   |           |   |   |   |   |   |
| (a)    Based      on closing price at March 31, 2009 of $29.24 per share.                                                                |   |
| (b)    Cash      received for options exercised totaled $107,000.                                                                        |   |

|                                                                                                                                                                                                                                                                                                                                                                                                           | Outstanding      and Exercisable Options               |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                           |                                                   |   |   |   | Weighted |
|                                                                                                                                                                                                                                                                                                                                                                                                           |                                                   |   | Weighted |   | Average |
|                                                                                                                                                                                                                                                                                                                                                                                                           |                                                   |   | Average |   | Remaining |
|                                                                                                                                                                                                                                                                                                                                                                                                           |                                                   |   | Exercise |   | Life      in |
|                                                                                                                                                                                                                                                                                                                                                                                                           | Shares                                                 |   | Price |   | Years |
| Range      of exercise prices:                                                                                                                                                                                                                                                                                                                                                                                 |                                                   |   |   |   |   |
| $5.50                                                                               |         8,244  |   | $               5.50 |   | 0.1 |
| $10.00 -      $19.74                                                                |         8,000  |   | $            12.42 |   | 2.6 |
| $22.90 -      $41.74                                                                |         18,000 |   | $            31.34 |   | 5.9 |
|                                                                                                                                                                                                                                                                                                                                                                                                           | 34,244                                                 |   | $            20.70 |   | 3.7 |

----

|                                                                     |   | Three      Months Ended               |   |
|--------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                     |   | March      31,                        |   |
|                                                                     |   | 2009                                  |   |   | 2008 |   |
|                                                                     |   | (In      thousands, except per share) |   |
| Weighted      average grant date fair value of options granted per share |   | $                                     | -      |   |   | $ | 23.06 |   |
| Intrinsic      value of options exercised                                |   | $                                     | 328    |   |   | $ | 19,650 |   |
|                                                                     |   |                                  |   |   |   |   |   |   |
| Stock-based      employee compensation expense                           |   | $                                     | -      |   |   | $ | 92 |   |
| Tax      benefit                                                         |   |                                  | -      |   |   |   | (32 | ) |
| Net      stock-based employee compensation expense                       |   | $                                     | -      |   |   | $ | 60 |   |

----

|                                                                                                                                                                                         |   | Gas            |       |   | Oil    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|------------|--------|--------|--------|
|                                                                                                                                                                                         |   | MMBtu      (a) |       |   | Price  |   |   | Bbls |   |   | Price |   |
| Production      Period:                                                                                                                                                                      |   |           |       |   |   |   |   |   |   |   |   |   |
| 2nd      Quarter 2009                                                                                                                                                                        |   |           | 1,570,000  |   |   | $      | 5.47 |   |   |   | 470,000 |   |   | $ | 49.68 |   |
| 3rd      Quarter 2009                                                                                                                                                                        |   |           | 1,450,000  |   |   | $      | 5.47 |   |   |   | 440,000 |   |   | $ | 48.13 |   |
| 4th      Quarter      2009                            |   |           | 1,850,000  |   |   | $      | 5.47 |   |   |   | 400,000 |   |   | $ | 46.15 |   |
| 2010                                                  |   |           | 7,540,000  |   |   | $      | 6.80 |   |   |   | 327,000 |   |   | $ | 53.30 |   |
| 2011                                                  |   |           | 6,420,000  |   |   | $      | 7.07 |   |   |   | - |   |   | $ | - |   |
|                                                                                                                                                                                         |   |           | 18,830,000 |   |   |   |   |   |   |   | 1,637,000 |   |   |   |   |   |
|                                                            |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      (a)    One      MMBtu equals one Mcf at a Btu factor of 1,000.                                                                             |   |

----

|                               | Asset      Derivatives         |   | Liability      Derivatives                             |
|------------------------------------|--------------------------------|--------|--------------------------------------------------------|
|                               |                           |   | March      31,                                         |   |   |   | March      31, |
|                               | Balance      Sheet             |   | 2009                                                   |   | Balance      Sheet |   | 2009 |
|                               | Location                       |   | Fair      Value                                        |   | Location |   | Fair      Value |
|                               | (In      thousands)            |
| Derivatives      not designated as |                           |   |                                                   |   |   |   |   |
| hedging instruments      under     |                           |   |                                                   |   |   |   |   |
| SFAS 133:                          |                           |   |                                                   |   |   |   |   |
| Commoditycontracts                 | Other      assets -            |   |                                                   |   | Current      liabilities - |   |   |
|                               | Fair value of      derivatives |   | $        3,416 |   | Fair value of      derivatives |   | $        2,037 |
| Total                              |                           |   | $        3,416 |   |   |   | $        2,037 |

|                                                      |   | March      31, 2009 |    |
|-----------------------------------------------------------|--------|---------------------|---------|
|                                                      |   | Assets              |    |   | Liabilities |   |   | Total |   |
|                                                      |   | (In      thousands) |    |
| Fair      value of derivatives – gross presentation |   | $                   | 16,061  |   |   | $ | (14,682 | ) |   | $ | 1,379 |   |
| Effects      of netting arrangements                      |   |                | (12,645 | ) |   |   | 12,645 |   |   |   | - |   |
| Fair      value of derivatives – net presentation   |   | $                   | 3,416   |   |   | $ | (2,037 | ) |   | $ | 1,379 |   |

|                               |   | Amount      of Gain or (Loss) Recognized in Earnings |
|------------------------------------|--------|------------------------------------------------------|
|                               |   |                                                 |   | Three      Months Ended |
|                               |   | Location      of Gain or (Loss)                      |   | March      31, |
|                               |   | Recognized      in Earnings                          |   | 2009 |   | 2008 |
|                               |   |                                                 |   | (In      thousands) |
| Derivatives      not designated as |   |                                                 |   |   |   |   |
| hedging instruments      under     |   |                                                 |   |   |   |   |
| SFAS 133:                          |   |                                                 |   |   |   |   |
| Commodity    contracts             |   | Other      income (expense) -                        |   |   |   |   |
|                               |   | Gain (loss) on      derivatives                      |   | $      2,510 |   | $      (46,109) |
| Total                              |   |                                                 |   | $      2,510 |   | $      (46,109) |

----

|               Level 1      - | Inputs      are unadjusted, quoted prices in active markets for identical assets or      liabilities at the measurementdate. |
|----------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------|

|               Level 2      - | Inputs      (other than quoted prices included in Level 1) are either directly or      indirectly observable for the asset or liability through correlation with      market data at the measurement date and for the duration of the      instrument’s anticipated life. |
|----------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|               Level 3      - | Inputs      reflect management’s best estimate of what market participants would use      in pricing the asset or liability at the measurement date. Consideration      is given to the risk inherent in the valuation technique and the risk      inherent in the inputs to themodel. |
|----------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Fair      Value Measurements |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                         |   | March      31, 2009          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Significant                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Other                        |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Observable                   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Inputs                       |   |
| Description                                                                                                                                                                                                                                                                                                                                                                                                                  |   | (Level      2)               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                         |   | (In      thousands)          |   |
| Assets:                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                         |   |
| Fair value of commodity      derivatives                                                               |   | $                            | 3,416  |   |
| Total      assets                                                                            |   | $                            | 3,416  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                         |   |   |
| Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                         |   |   |
| Fair value of commodity      derivatives                                                               |   | $                            | 2,037  |   |
| Total      liabilities                                                                       |   | $                            | 2,037  |   |

----

|                                                                                                                                                                                                                                                                                            |   | Fair      Value Measurements |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                                                                                                                                                                                                                                            |   | March      31, 2009          |   |
|                                                                                                                                                                                                                                                                                            |   | Significant                  |   |   |   |   |
|                                                                                                                                                                                                                                                                                            |   | Other                        |   |   |   |   |
|                                                                                                                                                                                                                                                                                            |   | Observable                   |   |   |   |   |
|                                                                                                                                                                                                                                                                                            |   | Inputs                       |   |   | Total |   |
| Description                                                                                                                                                                                                                                                                                     |   | (Level      2)               |   |   | Losses |   |
|                                                                                                                                                                                                                                                                                            |   | (In      thousands)          |   |
| Assets:                                                                                                                                                                                                                                                                                         |   |                         |   |   |   |   |
| Inventory                                                                          |   | $                            | 10,145 |   |   | $ | 3,268 |   |
| Long-lived assets held and      used                                                                                                                                                                                                                                                            |   |                         | 15,907 |   |   |   | 10,093 |   |
| Total      assets                                              |   | $                            | 26,052 |   |   | $ | 13,361 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | March      31,      |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2009                |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | (In      thousands) |   |
| Balance      at beginning of      period                                                                              |   | $                   | 144    |   |
| Reductions      for tax positions of prior      years                                                                 |   |                | -      |   |
| Balance      at end of      period                                                                                    |   | $                   | 144    |   |

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | March      31,      |      |   | December      31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|-----------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 2009                |      |   | 2008              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | (In      thousands) |      |
| Proved      properties                                                                                       |   | $                   | 1,464,374 |   |              | $      | 1,435,718 |   |
| Unproved      properties                                                                                     |   |                | 84,192    |   |              |   | 90,755 |   |
| Total capitalized      costs                                                                                 |   |                | 1,548,566 |   |              |   | 1,526,473 |   |
| Accumulated depreciation,      depletion and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                | (826,255  | )      |              |   | (791,507 | ) |
| Net capitalized      costs                                                                                                            |   | $                   | 722,311   |   |              | $      | 734,966 |   |

----

| For      the Three Months Ended                           |   |             |    |   |     |   |   |         |   |   |         |   |
|-----------------------------------------------------------|--------|------------------|---------|--------|----------|--------|--------|--------------|--------|--------|--------------|--------|
| March      31, 2009                                       |   |             |    |   |     |   |   |         |   |   |         |   |
| (Unaudited)                                               |   |             |    |   | Contract |   |   | Intercompany |   |   | Consolidated |   |
| (In      thousands)                                       |   | Oil      and Gas |    |   | Drilling |   |   | Eliminations |   |   | Total        |   |
|                                                      |   |             |    |   |     |   |   |         |   |   |         |   |
| Revenues                                                  |   | $                | 52,562  |   |     | $      | 9,186  |         |   | $      | (3,966       | )      |   | $ | 57,782 |   |
| Depreciation,      depletion and amortization (a)         |   |             | 34,991  |   |     |   | 2,738  |         |   |   | (1,264       | )      |   |   | 36,465 |   |
| Other      operating expenses (b)                         |   |             | 52,883  |   |     |   | 2,693  |         |   |   | (2,639       | )      |   |   | 52,937 |   |
| Interest      expense                                     |   |             | 4,905   |   |     |   | 533    |         |   |   | -            |   |   |   | 5,438 |   |
| Other      (income) expense                               |   |             | (3,411  | )      |     |   | -      |         |   |   | -            |   |   |   | (3,411 | ) |
| Income      (loss) before income taxes                    |   |             | (36,806 | )      |     |   | 3,222  |         |   |   | (63          | )      |   |   | (33,647 | ) |
|                                                      |   |             |    |   |     |   |   |         |   |   |         |   |   |   |   |   |
| Income      tax (expense) benefit                         |   |             | 13,510  |   |     |   | (1,132 | )            |   |   | -            |   |   |   | 12,378 |   |
| Net      income (loss)                                    |   |             | (23,296 | )      |     |   | 2,090  |         |   |   | (63          | )      |   |   | (21,269 | ) |
| Less      income attributable to                          |   |             |    |   |     |   |   |         |   |   |         |   |   |   |   |   |
|   noncontrolling interest,      net of tax |   |             | 563     |   |     |   | (1,609 | )            |   |   | -            |   |   |   | (1,046 | ) |
|                                                      |   |             |    |   |     |   |   |         |   |   |         |   |   |   |   |   |
| Net      income (loss) attributable to                    |   |             |    |   |     |   |   |         |   |   |         |   |   |   |   |   |
|   Clayton      Williams Energy, Inc             |   | $                | (22,733 | )      |     | $      | 481    |         |   | $      | (63          | )      |   | $ | (22,315 | ) |
|                                                      |   |             |    |   |     |   |   |         |   |   |         |   |   |   |   |   |
| Total      assets                                         |   | $                | 820,547 |   |     | $      | 76,058 |         |   | $      | (500         | )      |   | $ | 896,105 |   |
| Additions      to property and equipment                  |   | $                | 34,689  |   |     | $      | -      |         |   | $      | -            |   |   | $ | 34,689 |   |
|                                                      |   |             |    |   |     |   |   |         |   |   |         |   |   |   |   |   |

| For      the Three Months Ended                                                                                                                        |   |             |    |   |     |   |   |         |   |   |         |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|---------|--------|----------|--------|--------|--------------|--------|--------|--------------|--------|
| March      31, 2008                                                                                                                                    |   |             |    |   |     |   |   |         |   |   |         |   |
| (Unaudited)                                                                                                                                            |   |             |    |   | Contract |   |   | Intercompany |   |   | Consolidated |   |
| (In      thousands)                                                                                                                                    |   | Oil      and Gas |    |   | Drilling |   |   | Eliminations |   |   | Total        |   |
|                                                                                                                                                   |   |             |    |   |     |   |   |         |   |   |         |   |
| Revenues                                                                                                                                               |   | $                | 122,026 |   |     | $      | 17,163 |         |   | $      | (2,331       | )      |   | $ | 136,858 |   |
| Depreciation,      depletion and amortization (a)                                                                                                      |   |             | 27,988  |   |     |   | 2,610  |         |   |   | (325         | )      |   |   | 30,273 |   |
| Other      operating expenses (b)                                                                                                                      |   |             | 30,815  |   |     |   | 13,008 |         |   |   | (1,653       | )      |   |   | 42,170 |   |
| Interest      expense                                                                                                                                  |   |             | 6,352   |   |     |   | 1,094  |         |   |   | -            |   |   |   | 7,446 |   |
| Other      (income) expense                                                                                                                            |   |             | 45,454  |   |     |   | -      |         |   |   | -            |   |   |   | 45,454 |   |
| Income      (loss) before income taxes                                                                                                                 |   |             | 11,417  |   |     |   | 451    |         |   |   | (353         | )      |   |   | 11,515 |   |
|                                                                                                                                                   |   |             |    |   |     |   |   |         |   |   |         |   |   |   |   |   |
| Income      tax (expense) benefit                                                                                                                      |   |             | (3,964  | )      |     |   | (258   | )            |   |   | -            |   |   |   | (4,222 | ) |
| Net      income (loss)                                                                                                                                 |   |             | 7,453   |   |     |   | 193    |         |   |   | (353         | )      |   |   | 7,293 |   |
| Less      income attributable to                                                                                                                       |   |             |    |   |     |   |   |         |   |   |         |   |   |   |   |   |
|   noncontrolling interest,      net of tax                                                                                              |   |             | 62      |   |     |   | (176   | )            |   |   | -            |   |   |   | (114 | ) |
|                                                                                                                                                   |   |             |    |   |     |   |   |         |   |   |         |   |   |   |   |   |
| Net      income (loss) attributable to                                                                                                                 |   |             |    |   |     |   |   |         |   |   |         |   |   |   |   |   |
|   Clayton      Williams Energy, Inc                                                                                                          |   | $                | 7,515   |   |     | $      | 17     |         |   | $      | (353         | )      |   | $ | 7,179 |   |
|                                                                                                                                                   |   |             |    |   |     |   |   |         |   |   |         |   |   |   |   |   |
| Total      assets                                                                                                                                      |   | $                | 816,632 |   |     | $      | 96,197 |         |   | $      | (4,787       | )      |   | $ | 908,042 |   |
| Additions      to property and equipment                                                                                                               |   | $                | 55,431  |   |     | $      | 9      |         |   | $      | (353         | )      |   | $ | 55,087 |   |
|                           |   |             |    |   |     |   |   |         |   |   |         |   |   |   |   |   |

|   |  (b) | Includes      the following expenses:  production, exploration, natural gas      services, accretion of abandonment obligations, general and administrative      and loss on sales of assets and inventory  write-downs. |
|--------|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (Unaudited)                                                                                                                                                                                                                          |   |   |    |   |         |   |    | Non-      |   |   |         |   |   |         |     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------------|--------|---------|-----------|--------|--------|--------------|--------|--------|--------------|----------|
| (Dollars      in thousands)                                                                                                                                                                                                          |   |   |    |   | Guarantor    |   |    | Guarantor |   |   | Adjustments/ |   |   |         |     |
|                                                                                                                                                                                                                                 |   | Issuer |    |   | Subsidiaries |   |    | Entities  |   |   | Eliminations |   |   | Consolidated |     |
|                                                                                                                                                                                                                                 |   |   |    |   |         |   |    |      |   |   |         |   |   |         |     |
| Current      assets                                        |   | $      | 141,590 |   |         | $      | 190,322 |      |   | $      | 9,561        |   |   | $            | (250,927 | ) |   | $ | 90,546 |   |
| Property      and equipment, net                                                                                                                                                                                                     |   |   | 384,596 |   |         |   | 336,179 |      |   |   | 73,683       |   |   |         | -        |   |   |   | 794,458 |   |
| Investments      in subsidiaries                                                                                                                                                                                                     |   |   | 72,082  |   |         |   | -       |      |   |   | -            |   |   |         | (72,082  | ) |   |   | - |   |
| Other      assets                                          |   |   | 22,692  |   |         |   | 371     |      |   |   | 190          |   |   |         | (12,152  | ) |   |   | 11,101 |   |
| Total      assets                                                              |   | $      | 620,960 |   |         | $      | 526,872 |      |   | $      | 83,434       |   |   | $            | (335,161 | ) |   | $ | 896,105 |   |
|                                                                                                                                                                                                                                 |   |   |    |   |         |   |    |      |   |   |         |   |   |         |     |   |   |   |   |   |
| Current      liabilities                                   |   | $      | 60,578  |   |         | $      | 263,316 |      |   | $      | 20,707       |   |   | $            | (246,375 | ) |   | $ | 98,226 |   |
| Non-current      liabilities:                                                                                                                                                                                                        |   |   |    |   |         |   |    |      |   |   |         |   |   |         |     |   |   |   |   |   |
| Long-term      debt                                                            |   |   | 333,500 |   |         |   | -       |      |   |   | 35,538       |   |   |         | (12,100  | ) |   |   | 356,938 |   |
| Other                                                                          |   |   | 83,782  |   |         |   | 57,934  |      |   |   | 111          |   |   |         | -        |   |   |   | 141,827 |   |
|                                                                                                                                                                                                                                 |   |   | 417,282 |   |         |   | 57,934  |      |   |   | 35,649       |   |   |         | (12,100  | ) |   |   | 498,765 |   |
|                                                                                                                                                                                                                                 |   |   |    |   |         |   |    |      |   |   |         |   |   |         |     |   |   |   |   |   |
| Equity                                                     |   |   | 143,100 |   |         |   | 205,622 |      |   |   | 27,078       |   |   |         | (76,686  | ) |   |   | 299,114 |   |
| Total      liabilities and                                                                                                                                                                                                           |   |   |    |   |         |   |    |      |   |   |         |   |   |         |     |   |   |   |   |   |
|   equity                                                             |   | $      | 620,960 |   |         | $      | 526,872 |      |   | $      | 83,434       |   |   | $            | (335,161 | ) |   | $ | 896,105 |   |

| (Dollars      in thousands)                                                                                                                                                                                                          |   |   |    |   |         |   |    | Non-      |   |   |         |   |   |         |     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------------|--------|---------|-----------|--------|--------|--------------|--------|--------|--------------|----------|
|                                                                                                                                                                                                                                 |   |   |    |   | Guarantor    |   |    | Guarantor |   |   | Adjustments/ |   |   |         |     |
|                                                                                                                                                                                                                                 |   | Issuer |    |   | Subsidiaries |   |    | Entities  |   |   | Eliminations |   |   | Consolidated |     |
|                                                                                                                                                                                                                                 |   |   |    |   |         |   |    |      |   |   |         |   |   |         |     |
| Current      assets                                        |   | $      | 178,349 |   |         | $      | 173,636 |      |   | $      | 15,749       |   |   | $            | (242,250 | ) |   | $ | 125,484 |   |
| Property      and equipment, net                                                                                                                                                                                                     |   |   | 388,189 |   |         |   | 345,327 |      |   |   | 76,512       |   |   |         | -        |   |   |   | 810,028 |   |
| Investments      in subsidiaries                                                                                                                                                                                                     |   |   | 72,082  |   |         |   | -       |      |   |   | -            |   |   |         | (72,082  | ) |   |   | - |   |
| Other      assets                                          |   |   | 19,629  |   |         |   | 372     |      |   |   | 211          |   |   |         | (12,315  | ) |   |   | 7,897 |   |
| Total      assets                                                              |   | $      | 658,249 |   |         | $      | 519,335 |      |   | $      | 92,472       |   |   | $            | (326,647 | ) |   | $ | 943,409 |   |
|                                                                                                                                                                                                                                 |   |   |    |   |         |   |    |      |   |   |         |   |   |         |     |   |   |   |   |   |
| Current      liabilities                                   |   | $      | 83,288  |   |         | $      | 253,627 |      |   | $      | 28,212       |   |   | $            | (242,250 | ) |   | $ | 122,877 |   |
| Non-current      liabilities:                                                                                                                                                                                                        |   |   |    |   |         |   |    |      |   |   |         |   |   |         |     |   |   |   |   |   |
| Long-term      debt                                                            |   |   | 319,100 |   |         |   | -       |      |   |   | 40,225       |   |   |         | (12,100  | ) |   |   | 347,225 |   |
| Other                                                                          |   |   | 101,213 |   |         |   | 57,301  |      |   |   | 114          |   |   |         | (3       | ) |   |   | 158,625 |   |
|                                                                                                                                                                                                                                 |   |   | 420,313 |   |         |   | 57,301  |      |   |   | 40,339       |   |   |         | (12,103  | ) |   |   | 505,850 |   |
|                                                                                                                                                                                                                                 |   |   |    |   |         |   |    |      |   |   |         |   |   |         |     |   |   |   |   |   |
| Equity                                                     |   |   | 154,648 |   |         |   | 208,407 |      |   |   | 23,921       |   |   |         | (72,294  | ) |   |   | 314,682 |   |
| Total      liabilities and                                                                                                                                                                                                           |   |   |    |   |         |   |    |      |   |   |         |   |   |         |     |   |   |   |   |   |
|   equity                                                             |   | $      | 658,249 |   |         | $      | 519,335 |      |   | $      | 92,472       |   |   | $            | (326,647 | ) |   | $ | 943,409 |   |

----

| (Unaudited)                                                                                                                                                                                                                              |   |   |    |   |         |   |   | Non-      |   |   |         |   |   |         |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------------|--------|--------|-----------|--------|--------|--------------|--------|--------|--------------|--------|
| (In      thousands)                                                                                                                                                                                                                      |   |   |    |   | Guarantor    |   |   | Guarantor |   |   | Adjustments/ |   |   |         |   |
|                                                                                                                                                                                                                                     |   | Issuer |    |   | Subsidiaries |   |   | Entities  |   |   | Eliminations |   |   | Consolidated |   |
|                                                                                                                                                                                                                                     |   |   |    |   |         |   |   |      |   |   |         |   |   |         |   |
| Total      revenue                                             |   | $      | 33,539  |   |         | $      | 19,179 |      |   | $      | 9,306        |   |   | $            | (4,242 | ) |   | $ | 57,782 |   |
| Costs      and      expenses                                   |   |   | 63,819  |   |         |   | 24,110 |      |   |   | 5,651        |   |   |         | (4,178 | ) |   |   | 89,402 |   |
| Operating      income (loss)                                                                                                                                                                                                             |   |   | (30,280 | )      |         |   | (4,931 | )         |   |   | 3,655        |   |   |         | (64    | ) |   |   | (31,620 | ) |
| Other      income (expense)                                                                                                                                                                                                              |   |   | (2,899  | )      |         |   | 1,369  |      |   |   | (497         | )      |   |         | -      |   |   |   | (2,027 | ) |
| Income      tax (expense) benefit                                                                                                                                                                                                        |   |   | 12,378  |   |         |   | -      |      |   |   | -            |   |   |         | -      |   |   |   | 12,378 |   |
| Noncontrolling      interest, net of tax                                                                                                                                                                                                 |   |   | (1,046  | )      |         |   | -      |      |   |   | -            |   |   |         | -      |   |   |   | (1,046 | ) |
|                                                                                                                                                                                                                                     |   |   |    |   |         |   |   |      |   |   |         |   |   |         |   |   |   |   |   |   |
| Net      income      (loss)                                                        |   | $      | (21,847 | )      |         | $      | (3,562 | )         |   | $      | 3,158        |   |   | $            | (64    | ) |   | $ | (22,315 | ) |

| (Unaudited)                                                                                                                                                                                                                              |   |   |    |   |         |   |   | Non-      |   |   |         |   |   |         |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------------|--------|--------|-----------|--------|--------|--------------|--------|--------|--------------|--------|
| (In      thousands)                                                                                                                                                                                                                      |   |   |    |   | Guarantor    |   |   | Guarantor |   |   | Adjustments/ |   |   |         |   |
|                                                                                                                                                                                                                                     |   | Issuer |    |   | Subsidiaries |   |   | Entities  |   |   | Eliminations |   |   | Consolidated |   |
|                                                                                                                                                                                                                                     |   |   |    |   |         |   |   |      |   |   |         |   |   |         |   |
| Total      revenue                                             |   | $      | 80,232  |   |         | $      | 41,973 |      |   | $      | 17,363       |   |   | $            | (2,710 | ) |   | $ | 136,858 |   |
| Costs      and      expenses                                   |   |   | 39,871  |   |         |   | 19,128 |      |   |   | 15,801       |   |   |         | (2,357 | ) |   |   | 72,443 |   |
| Operating      income (loss)                                                                                                                                                                                                             |   |   | 40,361  |   |         |   | 22,845 |      |   |   | 1,562        |   |   |         | (353   | ) |   |   | 64,415 |   |
| Other      income (expense)                                                                                                                                                                                                              |   |   | (48,269 | )      |         |   | (3,578 | )         |   |   | (1,053       | )      |   |         | -      |   |   |   | (52,900 | ) |
| Income      tax (expense) benefit                                                                                                                                                                                                        |   |   | (4,222  | )      |         |   | -      |      |   |   | -            |   |   |         | -      |   |   |   | (4,222 | ) |
| Noncontrolling      interest, net of tax                                                                                                                                                                                                 |   |   | (114    | )      |         |   | -      |      |   |   | -            |   |   |         | -      |   |   |   | (114 | ) |
|                                                                                                                                                                                                                                     |   |   |    |   |         |   |   |      |   |   |         |   |   |         |   |   |   |   |   |   |
| Net      income      (loss)                                                        |   | $      | (12,244 | )      |         | $      | 19,267 |      |   | $      | 509          |   |   | $            | (353   | ) |   | $ | 7,179 |   |

| (Unaudited)                                                                                                                                                                                                                     |   |   |    |   |         |   |   | Non-      |   |   |         |   |   |         |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------------|--------|--------|-----------|--------|--------|--------------|--------|--------|--------------|--------|
| (In      thousands)                                                                                                                                                                                                             |   |   |    |   | Guarantor    |   |   | Guarantor |   |   | Adjustments/ |   |   |         |   |
|                                                                                                                                                                                                                            |   | Issuer |    |   | Subsidiaries |   |   | Entities  |   |   | Eliminations |   |   | Consolidated |   |
|                                                                                                                                                                                                                            |   |   |    |   |         |   |   |      |   |   |         |   |   |         |   |
| Operating      activities                                  |   | $      | 15,176  |   |         | $      | (8,505 | )         |   | $      | 5,381        |   |   | $            | 1,239  |   |   | $ | 13,291 |   |
| Investing      activities                                  |   |   | (43,738 | )      |         |   | (3,469 | )         |   |   | (48          | )      |   |         | (1,239 | ) |   |   | (48,494 | ) |
| Financing      activities                                  |   |   | 3,226   |   |         |   | 11,312 |      |   |   | (4,718       | )      |   |         | -      |   |   |   | 9,820 |   |
| Net      increase (decrease) in                                                                                                                                                                                                 |   |   |    |   |         |   |   |      |   |   |         |   |   |         |   |   |   |   |   |   |
| cash      and cash equivalents                                                                                                                                                                                                  |   |   | (25,336 | )      |         |   | (662   | )         |   |   | 615          |   |   |         | -      |   |   |   | (25,383 | ) |
|                                                                                                                                                                                                                            |   |   |    |   |         |   |   |      |   |   |         |   |   |         |   |   |   |   |   |   |
| Cash      at the beginning of                                                                                                                                                                                                   |   |   |    |   |         |   |   |      |   |   |         |   |   |         |   |   |   |   |   |   |
| the      period                                                 |   |   | 35,381  |   |         |   | 1,810  |      |   |   | 4,008        |   |   |         | -      |   |   |   | 41,199 |   |
|                                                                                                                                                                                                                            |   |   |    |   |         |   |   |      |   |   |         |   |   |         |   |   |   |   |   |   |
| Cash      at end of the period                                                                                                                                                                                                  |   | $      | 10,045  |   |         | $      | 1,148  |      |   | $      | 4,623        |   |   | $            | -      |   |   | $ | 15,816 |   |

| (Unaudited)                                                                                                                                                                                                                     |   |   |    |   |         |   |    | Non-      |   |   |         |   |   |         |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------------|--------|---------|-----------|--------|--------|--------------|--------|--------|--------------|--------|
| (In      thousands)                                                                                                                                                                                                             |   |   |    |   | Guarantor    |   |    | Guarantor |   |   | Adjustments/ |   |   |         |   |
|                                                                                                                                                                                                                            |   | Issuer |    |   | Subsidiaries |   |    | Entities  |   |   | Eliminations |   |   | Consolidated |   |
|                                                                                                                                                                                                                            |   |   |    |   |         |   |    |      |   |   |         |   |   |         |   |
| Operating      activities                                  |   | $      | 41,156  |   |         | $      | 31,955  |      |   | $      | 4,614        |   |   | $            | 325    |   |   | $ | 78,050 |   |
| Investing      activities                                  |   |   | (36,008 | )      |         |   | (14,032 | )         |   |   | (181         | )      |   |         | (325   | ) |   |   | (50,546 | ) |
| Financing      activities                                  |   |   | 3,172   |   |         |   | (17,923 | )         |   |   | (6,574       | )      |   |         | -      |   |   |   | (21,325 | ) |
| Net      increase (decrease) in                                                                                                                                                                                                 |   |   |    |   |         |   |    |      |   |   |         |   |   |         |   |   |   |   |   |   |
| cash      and cash equivalents                                                                                                                                                                                                  |   |   | 8,320   |   |         |   | -       |      |   |   | (2,141       | )      |   |         | -      |   |   |   | 6,179 |   |
|                                                                                                                                                                                                                            |   |   |    |   |         |   |    |      |   |   |         |   |   |         |   |   |   |   |   |   |
| Cash      at the beginning of                                                                                                                                                                                                   |   |   |    |   |         |   |    |      |   |   |         |   |   |         |   |   |   |   |   |   |
| the      period                                                 |   |   | 5,325   |   |         |   | 1,288   |      |   |   | 5,731        |   |   |         | -      |   |   |   | 12,344 |   |
|                                                                                                                                                                                                                            |   |   |    |   |         |   |    |      |   |   |         |   |   |         |   |   |   |   |   |   |
| Cash      at end of the period                                                                                                                                                                                                  |   | $      | 13,645  |   |         | $      | 1,288   |      |   | $      | 3,590        |   |   | $            | -      |   |   | $ | 18,523 |   |

----

Item 

|   | • | estimates      of our oil and gas reserves;                                                                                |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                       |
|   | • | estimates      of our future oil and gas production, including estimates of any increases      or decreases in production; |
|   |    |                                                                                                                       |
|   | • | planned      capital expenditures and the availability of capital resources to fund      those expenditures;               |
|   |    |                                                                                                                       |
|   | • | our      outlook on oil and gas prices;                                                                                    |
|   |    |                                                                                                                       |
|   | • | our      outlook on domestic and worldwide economic conditions;                                                            |
|   |    |                                                                                                                       |
|   | • | our      access to capital and our anticipated liquidity;                                                                  |
|   |    |                                                                                                                       |
|   | • | our      future business strategy and other plans and objectives for future      operations;                               |
|   |    |                                                                                                                       |
|   | • | the      impact of political and regulatory developments;                                                                  |
|   |    |                                                                                                                       |
|   | • | our      assessment of counterparty risks and the ability of our counterparties to      perform their future obligations;  |
|   |    |                                                                                                                       |
|   | • | estimates      of the impact of new accounting pronouncements on earnings in future      periods; and                      |
|   |    |                                                                                                                       |
|   | • | our      future financial condition or results of operations and our future      revenues and expenses.                    |
|   |    |                                                                                                                       |

|   | • | 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;                                                                                                                               |   |
|   |          |                                                                                                                                                                   |   |
|   | •       | hurricanes      and other weather conditions;                                                                                                                          |   |
|   |          |                                                                                                                                                                   |   |
|   | •       | 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                                                        |   |
|   |          |                                                                                                                                                                   |   |
|   | •       | the      other risks described in our Form 10-K for the year ended December 31,      2008.                                                                             |   |
|   |          |                                                                                                                                                                   |   |

----

| ·   | Our      oil and gas sales for the first quarter decreased $68.1 million, or 57%,      from 2008.  Price variances accounted for a $66.7 million      decrease and production variances accounted for a $1.4 million      decrease. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our      oil and gas production for the first quarter of 2009 was 6% lower on a      barrel of oil equivalent ("BOE") basis than in the comparable period      in 2008.  Our oil production was 10% higher than the first      quarter of 2008 which was more than offset by a 17% drop in gas production      compared to the 2008 period.  The comparability of production      between the two quarters was affected by the sale of certain South      Louisiana properties in the second quarter of  2008. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | We      recorded a $2.5 million net gain on derivatives in the first quarter      of 2009, consisting of a $1.1 million realized gain on settled      contracts and a $1.4 million gain for changes in mark-to-market      valuations.  Since we do not presently designate our derivatives      as cash flow hedges under applicable accounting standards, we recognize      the full effect of changing prices on mark-to-market valuations as a      current charge or credit to our results of  operations. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | During      the first quarter of 2009, we increased borrowings under our revolving      credit facility by $14.4 million from $94.1 million at December 31, 2008      to $108.5 million at March 31, 2009 in order to partially finance      additions to property andequipment. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | At      March 31, 2009, our capitalized unproved oil and gas properties totaled      $84.2 million, of which approximately $40.7 million was attributable      to unproved acreage.  Therefore, our results of operations in      future periods may be adversely affected by abandonments and impairments      related to unproved oil and gasproperties. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Three      Months Ended |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | March      31,          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 2009                    |   |   | 2008 |   |
| Oil      and Gas Production Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                    |   |   |   |   |
| Gas      (MMcf)                                                                                                         |   |                    | 4,613  |   |   |   | 5,548 |   |
| Oil      (MBbls)                                                                                                        |   |                    | 751    |   |   |   | 684 |   |
| Natural gas liquids      (MBbls)                                                                                        |   |                    | 53     |   |   |   | 58 |   |
| Total      (MBOE)                                                                                                       |   |                    | 1,573  |   |   |   | 1,667 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                    |   |   |   |   |   |   |
| Average      Realized Prices (a):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                    |   |   |   |   |   |   |
| Gas      ($/Mcf)                                                                                                        |   | $                       | 4.60   |   |   | $ | 8.86 |   |
| Oil      ($/Bbl)                                                                                                        |   | $                       | 37.09  |   |   | $ | 96.37 |   |
| Natural gas liquids      ($/Bbl)                                                                                        |   | $                       | 22.94  |   |   | $ | 54.83 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                    |   |   |   |   |   |   |
| Gain      (Loss) on Settled Derivative Contracts (a):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                    |   |   |   |   |   |   |
| ($ in thousands, except per      unit)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |   |   |   |   |   |   |
| Gas:  Net realized      gain (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $                       | 1,398  |   |   | $ | (884 | ) |
| Per unit produced      ($/Mcf)                                                                                                                             |   | $                       | .30    |   |   | $ | (.16 | ) |
| Oil:    Net      realized gain (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                       | (267   | ) |   | $ | (12,906 | ) |
| Per unit produced      ($/Bbl)                                                                                                                             |   | $                       | (.36   | ) |   | $ | (18.87 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                    |   |   |   |   |   |   |
| Average      Daily Production:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                    |   |   |   |   |   |   |
| Gas (Mcf):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                    |   |   |   |   |   |   |
| Permian      Basin                                                                                                                                         |   |                    | 15,674 |   |   |   | 15,562 |   |
| North      Louisiana                                                                                                                                       |   |                    | 14,550 |   |   |   | 13,596 |   |
| South      Louisiana                                                                                                                                       |   |                    | 12,592 |   |   |   | 23,552 |   |
| Austin Chalk      (Trend)                                                                                                                                  |   |                    | 3,030  |   |   |   | 2,460 |   |
| Cotton Valley Reef      Complex                                                                                                                            |   |                    | 4,274  |   |   |   | 5,270 |   |
| Other                                                                                                                                                      |   |                    | 1,136  |   |   |   | 527 |   |
| Total                                                                                                                                                                                    |   |                    | 51,256 |   |   |   | 60,967 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                    |   |   |   |   |   |   |
| Oil (Bbls):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| Permian      Basin                                                                                                                                         |   |                    | 4,456  |   |   |   | 3,494 |   |
| North      Louisiana                                                                                                                                       |   |                    | 270    |   |   |   | 343 |   |
| South      Louisiana                                                                                                                                       |   |                    | 391    |   |   |   | 985 |   |
| Austin Chalk      (Trend)                                                                                                                                  |   |                    | 3,142  |   |   |   | 2,635 |   |
| Other                                                                                                                                                      |   |                    | 85     |   |   |   | 59 |   |
| Total                                                                                                                                                                                    |   |                    | 8,344  |   |   |   | 7,516 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                    |   |   |   |   |   |   |
| Natural Gas Liquids      (Bbls):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                    |   |   |   |   |   |   |
| Permian      Basin                                                                                                                                         |   |                    | 225    |   |   |   | 215 |   |
| North      Louisiana                                                                                                                                       |   |                    | 1      |   |   |   | 2 |   |
| South      Louisiana                                                                                                                                       |   |                    | 45     |   |   |   | 140 |   |
| Austin Chalk      (Trend)                                                                                                                                  |   |                    | 307    |   |   |   | 272 |   |
| Other                                                                                                                                                      |   |                    | 11     |   |   |   | 8 |   |
| Total                                                                                                                                                                                    |   |                    | 589    |   |   |   | 637 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                           | Three      Months Ended |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|-------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                           | March      31,          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                           | 2009                    |   |   | 2008 |
| Exploration      Costs (in thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                           |                    |   |   |   |
| Abandonment and impairment      costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                           |                    |   |   |   |
| North      Louisiana                                                                                                                                           |                           | $                       | 260 |   |   | $ | 297 |   |
| South      Louisiana                                                                                                                                           |                           |                    | 728 |   |   |   | - |   |
| Permian      Basin                                                                                                                                             |                           |                    | 455 |   |   |   | - |   |
| East Texas      Bossier                                                                                                                                        |                           |                    | 8,867 |   |   |   | - |   |
| Utah                                                                                                                                                           |                           |                    | 1,774 |   |   |   | - |   |
| Mississippi                                                                                                                                                    |                           |                    | 311 |   |   |   | - |   |
| Other                                                                                                                                                          |                           |                    | 17 |   |   |   | - |   |
| Total                                                                                                                                                                                        |                           |                    | 12,412 |   |   |   | 297 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                           |                    |   |   |   |   |   |   |   |
| Seismic and      other                                                                                                      |                           |                    | 4,270 |   |   |   | 3,675 |   |
| Total exploration      costs                                                                                                                                                                 |                           | $                       | 16,682 |   |   | $ | 3,972 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                           |                    |   |   |   |   |   |   |   |
| Depreciation,      Depletion and Amortization (in thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                           |                    |   |   |   |   |   |   |   |
| Oil and gas      depletion                                                                                                  |                           | $                       | 34,762 |   |   | $ | 27,741 |   |   |
| Contract drilling      depreciation                                                                                         |                           |                    | 1,474 |   |   |   | 2,285 |   |   |
| Other      depreciation                                                                                                     |                           |                    | 229 |   |   |   | 247 |   |   |
| Total      DD&A                                                                                                                                                                          |                           | $                       | 36,465 |   |   | $ | 30,273 |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                           |                    |   |   |   |   |   |   |   |
| Oil      and Gas Costs ($/BOE Produced):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           |                    |   |   |   |   |   |   |   |
| Production      costs                                                                                                       |                           | $                       | 12.12 |   |   | $ | 12.34 |   |   |
| Oil and gas      depletion                                                                                                  |                           | $                       | 22.10 |   |   | $ | 16.64 |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                           |                    |   |   |   |   |   |   |   |
| Net      Wells Drilled (b):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                           |                    |   |   |   |   |   |   |   |
| Exploratory      Wells                                                                                                      |                           |                    | 0.2 |   |   |   | 1.7 |   |   |
| Developmental      Wells                                                                                                    |                           |                    | 6.0 |   |   |   | 12.9 |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |                    |   |   |   |   |   |   |   |
|     (a)      No derivatives were      designated as cash flow hedges in 2009 or 2008. All gains or losses      on settled derivatives were included in other income (expense) - gain      (loss) on derivatives.                                                                                                                                                                                                                                                                                                             |                           |                    |
|  (b)      Excludes wells being      drilled or completed at the end of each period.                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                           |                    |

----

----

----

----

|                                                                                                                                                                                   |   | Actual                  |   |   | Planned                |   |   |           |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|--------|----------------|--------|
|                                                                                                                                                                                   |   | Expenditures            |   |   | Expenditures           |   |   | Year      2009 |   |
|                                                                                                                                                                                   |   | Three      Months Ended |   |   | Year      Ending       |   |   | Percentage     |   |
|                                                                                                                                                                                   |   | March      31, 2009     |   |   | December      31, 2009 |   |   | of      Total  |   |
|                                                                                                                                                                                   |   | (In      thousands)     |   |   |                   |   |
| Permian      Basin                              |   | $                       | 8,700  |   |                   | $      | 25,100 |           |   |   | 32 | % |
| South      Louisiana                            |   |                    | 9,800  |   |                   |   | 23,300 |           |   |   | 30 | % |
| East      Texas Bossier                                                                                                                                                                |   |                    | 13,500 |   |                   |   | 19,900 |           |   |   | 25 | % |
| North      Louisiana                            |   |                    | 2,400  |   |                   |   | 4,000  |           |   |   | 5 | % |
| Utah/California                                 |   |                    | 2,700  |   |                   |   | 3,700  |           |   |   | 5 | % |
| Austin      Chalk (Trend)                                                                                                                                                              |   |                    | 400    |   |                   |   | 1,500  |           |   |   | 2 | % |
| Other                                           |   |                    | 400    |   |                   |   | 1,000  |           |   |   | 1 | % |
|                                                                                                                                                                                   |   | $                       | 37,900 |   |                   | $      | 78,500 |           |   |   | 100 | % |

----

|                                                                                            |   | March      31,      |    |   | December      31, |   |
|-------------------------------------------------------------------------------------------------|--------|---------------------|---------|--------|-------------------|--------|
|                                                                                            |   | 2009                |    |   | 2008              |   |
|                                                                                            |   | (In      thousands) |    |
| Working      capital (deficit) per GAAP                                                         |   | $                   | (7,680  | )      |              | $      | 2,607 |   |
| Add      funds available under the revolving credit facility                                    |   |                | 140,696 |   |              |   | 155,096 |   |
| Exclude      fair value of derivatives classified as current assets or current      liabilities |   |                | 2,037   |   |              |   | - |   |
| Exclude      current assets and current liabilities of Larclay JV                               |   |                | 11,931  |   |              |   | 13,205 |   |
| Working      capital per loan covenant                                                          |   | $                   | 146,984 |   |              | $      | 170,908 |   |

----

----

----

Item 

----

|                                                                                                                                                                                         |   | Gas            |       |   | Oil    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|------------|--------|--------|--------|
|                                                                                                                                                                                         |   | MMBtu      (a) |       |   | Price  |   |   | Bbls |   |   | Price |   |
| Production      Period:                                                                                                                                                                      |   |           |       |   |   |   |   |   |   |   |   |   |
| 2nd      Quarter 2009                                                                                                                                                                        |   |           | 1,570,000  |   |   | $      | 5.47 |   |   |   | 470,000 |   |   | $ | 49.68 |   |
| 3rd      Quarter 2009                                                                                                                                                                        |   |           | 1,450,000  |   |   | $      | 5.47 |   |   |   | 440,000 |   |   | $ | 48.13 |   |
| 4th      Quarter      2009                            |   |           | 1,850,000  |   |   | $      | 5.47 |   |   |   | 400,000 |   |   | $ | 46.15 |   |
| 2010                                                  |   |           | 7,540,000  |   |   | $      | 6.80 |   |   |   | 327,000 |   |   | $ | 53.30 |   |
| 2011                                                  |   |           | 6,420,000  |   |   | $      | 7.07 |   |   |   | - |   |   | $ | - |   |
|                                                                                                                                                                                         |   |           | 18,830,000 |   |   |   |   |   |   |   | 1,637,000 |   |   |   |   |   |
|                                                                                |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     (a)     One      MMBtu equals one Mcf at a Btu factor of 1,000.                                                                             |   |

----

Item 

| ·   | Management      has evaluated the effectiveness of our disclosure controls and procedures      as of the end of the period covered by this  report; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | This      evaluation was conducted under the supervision and with the participation      of our management, including our chief executive and chief financial      officers; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | It      is the conclusion of our chief executive officer and our chief financial      officer that these disclosure controls and procedures are effective in      ensuring that information that is required to be disclosed by the Company      in reports filed or submitted with the SEC is recorded, processed,      summarized and reported within the time periods specified in the rules and      forms established by the SEC. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

1A

Item 

|     **3.1 |   | Second      Restated Certificate of Incorporation of the Company, filed as Exhibit 3.1      to our Form S-2 Registration Statement, Commission File No.      333-13441                                                                                                                               |
|-------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          |   |                                                                                                                                                                                                                                                                                                 |
|     **3.2 |   | Certificate      of Amendment of Second Restated Certificate of Incorporation of Clayton      Williams Energy, Inc., filed as Exhibit 3.1 to our Form 10-Q for the      period ended September 30, 2000††                                                                                |
|                          |   |                                                                                                                                                                                                                                                                                                 |
|     **3.3 |   | Corporate      Bylaws of Clayton Williams Energy, Inc., as amended, filed as      Exhibit 3.1 to our Current Report on Form 8-K filed with the      Commission on March 14, 2008††                                                                                             |
|                          |   |                                                                                                                                                                                                                                                                                                 |
|     **4.1 |   | Indenture,      dated July 20, 2005, among Clayton Williams Energy, Inc., the Subsidiary      Guarantors and Wells Fargo Bank, National Association, as Trustee, filed      as Exhibit 4.1 to our Current Report on Form 8-K filed with the      Commission on July 22, 2005†† |
|                          |   |                                                                                                                                                                                                                                                                                                 |
|   **10.1            |   | Assignment      and Assumption Agreement, dated March 13, 2009, between Clayton Williams      Energy, Inc. and Lariat Services, Inc. filed as Exhibit 10.74 to our      Annual Report on Form 10-K for the year ended December 31, 2008.      ††                                         |
|                          |   |                                                                                                                                                                                                                                                                                                 |
|     *31.1 |   | Certification      by the President and Chief Executive Officer of the Company pursuant to      Rule 13a - 14(a) of the Securities Exchange Act of      1934                                                                                                                               |
|                          |   |                                                                                                                                                                                                                                                                                                 |
|     *31.2 |   | Certification      by the Chief Financial Officer of the Company pursuant to Rule      13a - 14(a) of the Securities Exchange Act of    1934                                                                                                                                               |
|                          |   |                                                                                                                                                                                                                                                                                                 |
| ***32.1                       |   | Certifications      by the Chief Executive Officer and Chief Financial Officer of the Company      pursuant to18 U.S.C. § 1350                                                                                                                                                   |

|   | * | Filed      herewith |
|--------|---|---------------------|

|   | ** | Incorporated      by reference to the filingindicated |
|--------|----|-------------------------------------------------------|

|   | *** | Furnished      herewith |
|--------|-----|-------------------------|

|   | † | Identifies      an Exhibit that consists of or includes a management contract or      compensatory plan or arrangement |
|--------|---------|------------------------------------------------------------------------------------------------------------------------|

|   | †† | Filed      under our Commission FileNo. 001-10924 |
|--------|----------------|--------------------------------------------------------|

----

WILLIAMS 

|   |   | CLAYTON      WILLIAMS ENERGY, INC. |
|--------|--------|------------------------------------|

| Date:  | May      8, 2009 | By:    | /s/      L. Paul Latham                 |
|--------|------------------|--------|-----------------------------------------|
|   |             |   | L.      Paul Latham                     |
|   |             |   | Executive      Vice President and Chief |
|   |             |   |   Operating      Officer      |

| Date:  | May      8, 2009 | By:    | /s/      Mel G. Riggs                          |
|--------|------------------|--------|------------------------------------------------|
|   |             |   | Mel      G. Riggs                              |
|   |             |   | Senior      Vice President and Chief Financial |
|   |             |   |   Officer                            |