880115--3/16/2006--CLAYTON_WILLIAMS_ENERGY_INC_/DE

related topics
{gas, price, oil}
{loss, insurance, financial}
{cost, regulation, environmental}
{capital, credit, financial}
{acquisition, growth, future}
{personnel, key, retain}
{competitive, industry, competition}
{stock, price, operating}
{operation, natural, condition}
Our exploration activities subject us to greater risks than development activities. If we do not replace reserves we produce, our financial results will suffer. Volatility of oil and gas prices significantly affects our cash flow and capital resources and our ability to produce oil and gas economically. Our liquidity, including the availability of capital resources, is uncertain. Adverse changes in reserve estimates or commodity prices could reduce the borrowing base Adverse changes in reserve estimates or commodity prices could reduce our cash flow from operating activities Adverse changes in the borrowing base may cause outstanding debt to equal or exceed the borrowing base Delays in bringing successful wells on production may reduce our liquidity Hedging transactions may limit our potential gains and involve other risks. Information concerning our reserves and future net revenues estimates is inherently uncertain. Acquisitions are subject to the risks and uncertainties of evaluating reserves and potential liabilities and may be disruptive and difficult to integrate into our business. Drilling oil and natural gas wells is a high-risk activity and subjects us to a variety of factors that we cannot control. We may not be insured against all of the operating hazards to which our business is exposed. Our business depends on oil and natural gas transportation facilities, most of which are owned by others. A shortage of available drilling rigs, equipment and personnel may delay or restrict our operations. Our industry is highly competitive. Our success depends on key members of our management and our ability to attract and retain experienced technical and other professional personnel. We are primarily controlled by our principal stockholder. By extending credit to our customers, we are exposed to potential economic loss. Compliance with environmental and other government regulations could be costly and could negatively impact production. Our exploration and production activities are subject to extensive environmental regulations, and to laws that can give rise to substantial liabilities from environmental contamination.

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