UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): November 15,
2006
CLAYTON WILLIAMS ENERGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-10924 75-2396863
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
6 Desta Drive, Suite 6500
Midland, Texas 79705-5510
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code:
(432) 682-6324
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
The Compensation Committee of the Board of Directors of Clayton
Williams Energy, Inc. (the "Company"), in September 2002, adopted
an incentive plan for officers, key employees and consultants,
excluding Clayton W. Williams, the Chairman of the Board,
President and Chief Executive Officer of the Company, who promote
the Company's drilling and acquisition programs. Management's
objective in adopting this plan is to further align the interests
of the participants with those of the Company by granting the
participants after-payout working interests in the production
developed, directly or indirectly, by the participants. The plan
provides for the creation of a series of partnerships between the
Company and the participants to which the Company contributes a
portion of its working interest in wells drilled within certain
areas. The Company pays all costs and receives all revenues until
payout of its costs, plus interest. At payout, the participants
receive 99% of all subsequent revenues and pay 99% of all
subsequent expenses attributable to the partnerships' interests.
On October 2, 2006 the Compensation Committee of the Board of
Directors of the Company approved the formation of four
participation agreements created pursuant to this plan and
approved participation awards to certain officers, key employees
and consultants. The Company entered into participation
agreements with the participant on November 15, 2006, to be
effective as of October 2, 2006. The participation agreements
are summarized as follows:
Participation Agreement relating to Floyd Prospect III, to
which the Company will contribute 6% of its working interest in
wells to be drilled in the Floyd Prospect area located in
Plaquemines Parish, Louisiana.
Participation Agreement relating to North Louisiana -
Bossier II, to which the Company will contribute 5% of its
working interest in wells to be drilled in the North Louisiana
Parishes of Caddo, Desoto, Sabine, Natchitoches, Red River,
Bienville, Jackson, Richland, Caldwell, Franklin, Madison and
Tensas, in which the Bossier Sand Trend is the primary objective.
Participation Agreement relating to North Louisiana -
Hosston/Cotton Valley II, to which the Company will contribute 5%
of its working interest in wells to be drilled in North Louisiana
Parishes of Caddo, Bossier, Webster, Claiborne, Lincoln, Union
and Quachita, in which the Hosston/Cotton Valley/Gray Sand Trend
is the primary objective.
Participation Agreement relating to South Louisiana V, to
which to Company will contribute 5% of its working interest in
wells to be drilled in the South Louisiana Parishes of Calcasieu,
Cameron, Iberia, Jefferson Davis, Acadia, Vermillion, West Baton
Rouge, East Baton Rouge, St. James, St. Charles, Orleans,
Iberville, Livingston, Ascension, Jefferson, St. Bernard,
Plaquemines, St. John, Lafourche, Terrebonne, Assumption, St.
Martin and St. Mary, excluding prospects commonly referred to as
the Floyd Prospects located in Plaquemines Parish.
Item 9.01 Financial Statements and Exhibits
The following exhibits are provided as part of the information
furnished under Item 1.01 of this report.
Exhibit
Number Description
10.1 Participation Agreement relating to Floyd
Prospect III dated November 15, 2006.
10.2 Participation Agreement relating to North Louisiana -
Bossier II dated November 15, 2006.
10.3 Participation Agreement relating to North
Louisiana - Hosston/Cotton Valley II dated
November 15, 2006.
10.4 Participation Agreement relating to South
Louisiana V dated November 15, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
CLAYTON WILLIAMS ENERGY, INC.
November 16, 2006 By: /s/ L. Paul Latham
L Paul Latham
Executive Vice President and Chief
Operating Officer
November 16, 2006 By: /s/ Mel G. Riggs
Mel G. Riggs
Senior Vice President and Chief
Financial Officer