Supplemental Oil and Gas Reserve Information

The estimates of proved oil and gas reserves utilized in the preparation of the consolidated financial statements were prepared by independent petroleum engineers. Such estimates are in accordance with guidelines established by the SEC and the FASB. All of our reserves are located in the United States. For information about our results of operations from oil and gas activities, see the accompanying consolidated statements of operations and comprehensive income (loss).

We emphasize that reserve estimates are inherently imprecise. Accordingly, the estimates are expected to change as more current information becomes available. In addition, a portion of our proved reserves are classified as proved developed nonproducing and proved undeveloped, which increases the imprecision inherent in estimating reserves which may ultimately be produced.

We did not have any capital costs relating to exploratory wells pending the determination of proved reserves for the years ended December 31, 2012, 2011 and 2010.

The following table sets forth estimated proved reserves together with the changes therein (oil and NGL in MBbls, gas in MMcf, gas converted to MBOE by dividing MMcf by six) for the years ended December 31, 2012, 2011 and 2010.



	Oil ^(a)		Gas		MBOE
Proved reserves:
December 31, 2009	20,953		76,103		33,637
Revisions	1,511		4,628		2,282
Extensions and discoveries	18,969		25,343		23,193
Purchases of minerals-in-place	317		190		349
Sales of minerals-in-place	(268	)	(16,017	)	(2,937	)
Production	(3,667	)	(10,750	)	(5,459	)
December 31, 2010	37,815		79,497		51,065
Revisions	(1,802	)	(1,227	)	(2,007	)
Extensions and discoveries	17,570		19,864		20,881
Sales of minerals-in-place	(45	)	(664	)	(156	)
Production	(4,002	)	(8,594	)	(5,434	)
December 31, 2011	49,536		88,876		64,349
Revisions	(5,498	)	(6,699	)	(6,615	)
Extensions and discoveries	16,676		22,604		20,443
Purchases of minerals-in-place	2,474		6,182		3,504
Sales of minerals-in-place	(633	)	(555	)	(725	)
Production	(4,254	)	(8,072	)	(5,599	)
December 31, 2012	58,301		102,336		75,357
Proved developed reserves:
December 31, 2010	24,570		59,409		34,472
December 31, 2011	28,962		61,811		39,264
December 31, 2012	32,685		64,013		43,354


(a)	Includes natural gas liquids.



CLAYTON WILLIAMS ENERGY, INC.
SUPPLEMENTAL INFORMATION (Continued)
(UNAUDITED)

Net downward revisions of 6,615 MBOE consisted of downward revisions of 4,339 MBOE related to performance and downward revisions of 2,276 MBOE related to pricing. Downward price revisions of 2,276 MBOE were attributable to the effects of lower product prices on the estimated quantities of proved reserves. Substantially all of the downward performance revisions were attributable to our Andrews County Wolfberry program.

The standardized measure of discounted future net cash flows relating to estimated proved reserves as of December 31, 2012, 2011 and 2010 was as follows:



	2012			2011			2010
	(In thousands)
Future cash inflows	$	5,085,122		$	4,701,004		$	3,058,637
Future costs:
Production	(1,819,356		)	(1,558,067		)	(1,127,744		)
Development	(651,292		)	(510,709		)	(308,420		)
Income taxes	(673,686		)	(757,253		)	(455,980		)
Future net cash flows	1,940,788			1,874,975			1,166,493
10% discount factor	(1,000,957		)	(936,462		)	(482,055		)
Standardized measure of discounted net cash flows	$	939,831		$	938,513		$	684,438

Changes in the standardized measure of discounted future net cash flows relating to estimated proved reserves for the years ended December 31, 2012, 2011 and 2010 were as follows:



	2012			2011			2010
	(In thousands)
Standardized measure, beginning of period	$	938,512		$	684,438		$	364,273
Net changes in sales prices, net of production costs	(196,930		)	206,357			192,193
Revisions of quantity estimates	(144,899		)	(53,089		)	56,190
Accretion of discount	137,369			99,028			45,963
Changes in future development costs, including development costs incurred that reduced future development costs	148,733			84,638			39,689
Changes in timing and other	(58,322		)	(45,055		)	20,839
Net change in income taxes	76,593			(130,562		)	(210,090		)
Future abandonment cost, net of salvage	(9,230		)	925			(1,107		)
Extensions and discoveries	289,999			399,068			441,719
Sales, net of production costs	(277,248		)	(305,769		)	(244,792		)
Purchases of minerals-in-place	80,744			—			9,290
Sales of minerals-in-place	(45,490		)	(1,466		)	(29,729		)
Standardized measure, end of period	$	939,831		$	938,512		$	684,438



CLAYTON WILLIAMS ENERGY, INC.
SUPPLEMENTAL INFORMATION (Continued)
(UNAUDITED)

The estimated present value of future cash flows relating to estimated proved reserves is extremely sensitive to prices used at any measurement period. The average prices used for each commodity for the years ended December 31, 2012, 2011 and 2010 were as follows:



	Average Price
	Oil ^(a)		Gas
As of December 31:
2012 ^(b)	$	83.09	$	3.70
2011 ^(b)	$	87.61	$	5.31
2010 ^(b)	$	72.36	$	5.44


(a)	Includes natural gas liquids.


(b)	Average prices for December 31, 2012, 2011 and 2010 were based on the 12-month unweighted arithmetic average of the first-day-of-the-month price for the period from January through December during each respective calendar year.