SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12

CLAYTON WILLIAMS ENERGY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.

(1) Title of each class of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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CLAYTON WILLIAMS ENERGY, INC.
Six Desta Drive, Suite 6500
Midland, Texas 79705

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

MAY 16, 2001

_______________________________________________________________________________

To Our Stockholders:

The Annual Meeting of Stockholders of Clayton Williams Energy, Inc., a Delaware
corporation, will be held at the Petroleum Club of Midland, 501 W. Wall,
Midland, Texas, on Wednesday, May 16, 2001, at 10:00 A.M., local time, for the
following purposes:

1. To elect two directors for a term of three years in accordance
with the Certificate of Incorporation of the Company.

2. To transact such other business as may properly come before
the meeting.

Stockholders of record at the close of business on April 2, 2001, are entitled
to notice of and to vote at the meeting or any adjournments thereof.

Midland, Texas By Order of the Board
April 17, 2001 Mel G. Riggs
Secretary

_______________________________________________________________________________

WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN THE PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.

TABLE OF CONTENTS

Page
----

PROXY STATEMENT.................................................................................. 1

Proposal No. 1 - Election of Two Directors.................................................... 2

Information Concerning Security Ownership..................................................... 4

Section 16(a) Beneficial Ownership Reporting Compliance....................................... 5

Board of Directors and Committees............................................................. 6

Report of the Compensation Committee.......................................................... 7

Compensation Committee Interlocks and Insider Participation................................... 8

Executive Compensation........................................................................ 8

Report of the Audit Committee................................................................. 10

Fees to Arthur Andersen LLP................................................................... 11

Relationship With Independent Accountants..................................................... 11

Comparison of Cumulative Total Shareholder Return............................................. 12

Certain Transactions and Relationships........................................................ 12

Receipt of Stockholder Proposals.............................................................. 13

Other Business................................................................................ 13

Availability of Annual Report................................................................. 13

APPENDIX - AUDIT COMMITTEE CHARTER............................................................... A-1

CLAYTON WILLIAMS ENERGY, INC.
Six Desta Drive, Suite 6500
Midland, Texas 79705

PROXY STATEMENT

This proxy statement and related proxy are being mailed to
stockholders of Clayton Williams Energy, Inc. (the "Company") on or about
April 17, 2001, in connection with the solicitation by the Company of proxies
to be used at the Annual Meeting of Stockholders of the Company to be held at
the Petroleum Club of Midland, 501 W. Wall, Midland, Texas, on Wednesday, May
16, 2001, at 10:00 A.M., local time, and at all adjournments thereof.

Any person giving a proxy has the power to revoke it at any time
before it is voted by filing with the Secretary of the Company an instrument
revoking the proxy, by delivering a properly executed proxy of a later date or
attending the meeting and voting in person. The Company will bear the costs of
this solicitation of proxies. The Company may also reimburse persons holding
stock in their names or in those of their nominees for their reasonable
expenses in sending proxy material to their principals and obtaining their
proxies. The solicitation is being made by mail and may also be made by
telephone or other means of communication by officers, directors and regular
employees of the Company, who will receive no additional compensation
therefore. Total expenses of the solicitation are expected to be nominal.

Stockholders of record at the close of business on April 2, 2001, are
entitled to notice of and to vote at the meeting. At the close of business on
such date, the Company had 9,267,670 shares of Common Stock $.10 par value per
share (the "Common Stock") outstanding, each share being entitled to one vote.
Shares held by the Company's 401(k) Plan & Trust will be voted by the Plan
Trustee, as provided by the Plan.

Properly executed proxies will be voted in accordance therewith, or
if no direction is indicated thereon, (i) in favor of the nominees for
director named herein and (ii) in the discretion of the persons appointed as
proxies upon any other business that may properly come before the meeting or
any adjournment thereof. With respect to the election of directors, a
stockholder may, by properly completing the enclosed proxy, vote in favor of
all nominees or withhold his or her votes as to all nominees or as to specific
nominees. Directors will be elected by the affirmative vote of a plurality of
the shares represented at the meeting in person or by proxy and entitled to
vote on the election of directors. The Company's Certificate of Incorporation
prohibits cumulative voting in the election of directors. All other matters
properly coming before the meeting will be decided by the affirmative vote of
a majority of the shares represented at the meeting in person or by proxy and
entitled to vote on such matters, except as otherwise required by law or by
the Company's Certificate of Incorporation or bylaws.

The votes will be counted by one or more inspectors appointed by the
Board of Directors, who will determine, among other things, the number of
votes necessary for the stockholders to take action in accordance with the
foregoing requirements and the votes withheld or cast for and against each
matter. All properly executed proxies and ballots, regardless of the nature of
vote or the absence of a vote indication (but not including broker non-votes),
are counted in determining the number of shares represented at the meeting.
Neither broker non-votes nor abstentions are counted as affirmative votes, in
whole or in part.

PROPOSAL NO. 1 ELECTION OF TWO DIRECTORS

The Board of Directors is composed of three classes of members. One
class of directors is elected each year to hold office for a three-year term
and until successors of such class are duly elected and qualified. Except
where the authority to do so has been withheld, it is the intention of the
persons named in the proxy to vote to elect Clayton W. Williams and L. Paul
Latham as directors for three-year terms. Each of the nominees has consented
to being named in the Proxy Statement and to serve, if elected, but if, for
any unforeseen cause, either of them should decline or be unable to serve, the
proxies will be voted to fill any vacancy so arising in accordance with the
discretionary authority of the persons named in the proxy.

With respect to the nominees for election, and directors continuing
in office, information regarding age, positions with the Company or other
principal occupations for the past five years, other directorships and the
year each was initially elected a director of the Company is as follows. There
are no family relationships among the named persons except that Mr. Groner is
a son-in-law to Mr. Williams.

NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
FOR THREE-YEAR TERM EXPIRING IN 2004

CLAYTON W. WILLIAMS, age 69, is Chairman of the Board, President, Chief
Executive Officer and a Director of the Company, having served in such
capacities since September 1991. For more than the past five years, Mr.
Williams has been the chief executive officer and director of (i) certain
companies previously controlled by Mr. Williams which were consolidated into
the Company in May 1993 in connection with the Company's initial public
offering (the "Williams Companies"); and (ii) certain entities other than the
Williams Companies which are controlled directly or indirectly by Mr. Williams
(the "Williams Entities").

L. PAUL LATHAM, age 49, is Executive Vice President, Chief Operating Officer
and a Director of the Company, having served in such capacities since
September 1991. Mr. Latham also serves as an officer and director of certain
Williams Entities.

MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING IN 2002

ROBERT L. PARKER, age 77, is a Director of the Company and a member of the
Compensation and Audit Committees of the Board of Directors. Mr. Parker was
elected a director of the Company in October 1991. Mr. Parker is Chairman of
the Board of Parker Drilling Company, a publicly owned corporation providing
contract drilling services, having served in such capacity for more than the
past five years. He also serves as a director of Bank of Oklahoma Financial
Corp.

JORDAN R. SMITH, age 66, is a Director and a member of the Compensation and
Audit Committees of the Board of Directors. Mr. Smith has served as a Director
of the Company since his appointment by the Board in July 2000. Mr. Smith is
President of Ramshorn Investments, Inc., a wholly owned subsidiary of Nabors
Industries, having served in such capacity for more than the past five years.
Mr. Smith has served on the Board of the University of Wyoming Foundation and
the Board of the Domestic Petroleum Council, and is also Founder and Chairman
of the American Junior Golf Association.

JERRY F. GRONER, age 38, is Vice President of Land and Lease Administration of
the Company, having served in such capacity since 1994. Mr. Groner has served
as a Director of the Company since his appointment by the Board in August 1999.

MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING IN 2003

STANLEY S. BEARD, age 60, is a Director of the Company and a member of the
Compensation and Audit Committees of the Board of Directors. Mr. Beard has
served as a director since September 1991. Mr. Beard has been an independent
oil and gas operator for over twenty years, a consultant to Mr. Williams
periodically since 1968 and involved in real estate development for the past
13 years.

MEL G. RIGGS, age 46, is Senior Vice President and Chief Financial Officer of
the Company, having served in such capacities since September 1991. Mr. Riggs
has served as a Director of the Company since May 1994.

INFORMATION CONCERNING SECURITY OWNERSHIP

Under regulations of the Securities and Exchange Commission, persons
who have power to vote or dispose of shares of the Company, either alone or
jointly with others, are deemed to be beneficial owners of such shares. The
following table sets forth certain information regarding the beneficial
ownership of Common Stock as of March 31, 2001, by (i) each person who is the
beneficial owner of 5 percent or more of the outstanding Common Stock (based
upon copies of all Schedule 13Gs and 13Ds provided to the Company), (ii) each
director of the Company and each nominee for director, (iii) each executive
officer named in the Summary Compensation Table and (iv) all officers and
directors of the Company as a group. Because the voting or dispositive power of
certain shares listed in the following table is shared, the same securities in
such cases are listed opposite more than one name in the table and the sharing
of voting or dispositive power is described in the referenced footnote. The
total number of shares of Common Stock of the Company listed below for
directors and executive officers as a group eliminates such duplication. Unless
otherwise noted, the persons and entities named below have sole voting and
investment power with respect to the shares listed opposite each of their names.

Amount and Nature of Percent
Name Beneficial Ownership of Class
- ----------------------------------------------- --------------------------------- -----------------

Clayton Williams Partnership, Ltd.(1) 3,881,109 41.9%

CWPLCO, Inc.(1) 3,881,109 41.9%

Clayton W. Williams(1) 4,678,494(2) 48.9%

State Street Research & Management Co. 921,296(3) 9.9%
One Financial Center, 30th Floor
Boston, MA 02111-2690

L. Paul Latham 7,463(4) *

Mel G. Riggs 7,441(5) *

Jerry F. Groner 30,625(6) *

Patrick C. Reesby 10,818(7) *

Stanley S. Beard 15,401(8) *

Robert L. Parker 22,217(8) *

Jordan R. Smith 1,400(8) *

All officers and directors as a group (10 persons) 4,808,009(9) 50.8%

- ------------------
* Less than 1 percent of the shares outstanding.

(1) The mailing address of Clayton Williams Partnership, Ltd.,
CWPLCO, Inc. and Mr. Williams is Six Desta Drive, Suite 3000,
Midland, Texas 79705. Clayton Williams Partnership, Ltd. and
CWPLCO, Inc. are referred to collectively herein as the
"Affiliated Holders". CWPLCO, Inc. is the sole general partner
of Clayton Williams Partnership, Ltd. and holds, in its own
capacity and on behalf of Clayton Williams Partnership, Ltd.,
voting and investment power over the shares shown for the
Affiliated Holders. Mr. Williams shares voting and investment
power with respect to the shares owned by the Affiliated Holders.

(2) Includes (a) an aggregate of 3,881,109 shares owned by the
Affiliated Holders beneficially owned by Mr. Williams due to
Mr. Williams' control of the Affiliated Holders, (b) 11,044
shares owned by Mr. Williams' wife, (c) 588 shares owned by a
trust of which Mrs. Williams is the trustee, (d) 393,841
shares owned directly by Mr. Williams (including approximately
12,295 shares held in the Company's 401(k) Plan & Trust over
which Mr. Williams exercises investment control), (e) 27,734
shares owned by three of Mr. Williams' children, (f) 49,179
shares in trusts of which Mr. Williams is the Trustee, (g)
5,749 shares in a trust for the benefit of Mr. Williams of
which Mrs. Williams is the Trustee, and (h) the right to acquire

beneficial ownership through presently exercisable options to
purchase 309,250 shares of Common Stock granted under the 1993
Stock Compensation Plan. See "EXECUTIVE COMPENSATION."

(3) Represents shares owned by clients of State Street Research &
Management Co. State Street Research & Management Co.
disclaims beneficial ownership of all such shares.

(4) Includes (a) 1,633 shares held in the Company's 401(k) Plan &
Trust over which Mr. Latham exercises investment control and
(b) the right to acquire beneficial ownership through
presently exercisable options to purchase 5,830 shares of
Common Stock granted under the 1993 Stock Compensation Plan.
See "EXECUTIVE COMPENSATION."

(5) Includes (a) 1,521 shares held in the Company's 401(k) Plan &
Trust over which Mr. Riggs exercises investment control, (b)
1,382 shares over which Mr. Riggs exercises control under a
Power of Attorney and (c) the right to acquire beneficial
ownership through presently exercisable options to purchase
4,538 shares of Common Stock granted under the 1993 Stock
Compensation Plan. See "EXECUTIVE COMPENSATION."

(6) Includes (a) 2,491 shares held in the Company's 401(k) Plan &
Trust over which Mr. Groner exercises investment control, (b)
19,511 shares owned by Mr. Groner's wife as her separate
property, (c) 1,950 shares owned by Mr. Groner's children
residing with him, and (d) the right to acquire beneficial
ownership through presently exercisable options to purchase
6,012 shares of Common Stock granted under the 1993 Stock
Compensation Plan. See "EXECUTIVE COMPENSATION."

(7) Includes (a) 1,264 shares held in the Company's 401(k) Plan &
Trust over which Mr. Reesby exercises investment control and
(b) the right to acquire beneficial ownership through
presently exercisable options to purchase 4,554 shares of
Common Stock granted under the 1993 Stock Compensation Plan.
See "EXECUTIVE COMPENSATION."

(8) Includes the right to acquire beneficial ownership through
presently exercisable options to purchase shares of Common
Stock granted under the Outside Directors Stock Option Plan,
as follows: Mr. Beard - 8,000 shares; Mr. Parker - 7,000
shares; and Mr. Smith - 1,000 shares. See "BOARD OF DIRECTORS
AND COMMITTEES."

(9) Includes all rights of directors and executive officers to
acquire beneficial ownership through presently exercisable
options to purchase shares of Common Stock granted under the
Outside Directors Stock Option Plan and the 1993 Stock
Compensation Plan.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely upon a review of Forms 3, 4 and 5 and amendments thereto
furnished to the Company pursuant to the rules and regulations promulgated
under Section 16(a) of the Securities Exchange Act of 1934 during and with
respect to the Company's last fiscal year and upon certain written
representations received by the Company, the Company is not aware of any
failure by a reporting person of the Company to timely file reports required
under Section 16(a).

BOARD OF DIRECTORS AND COMMITTEES

Compensation for non-employee directors consists of an annual
retainer fee of $10,000 plus a $7,500 fee for each Board meeting attended and
a $1,000 fee for attending a committee meeting held on a day other than the
same day of a Board meeting. All three non-employee directors serve on both
committees of the Board. As compensation for service on the Board, employee
directors receive an annual fee of $5,000 plus a $2,500 fee for each Board
meeting attended.

In July 2000, Mr. William P. Clements, who had been a non-employee
director of the Company since 1991, retired from the Board of Directors. The
Board elected Mr. Jordan R. Smith to fill Mr. Clements' unexpired term on the
Board (expiring in 2002), and appointed Mr. Smith to serve on the Compensation
Committee and the Audit Committee.

The Company has adopted its Outside Directors Stock Option Plan in
which only those directors who are not employed by the Company or any of its
affiliates (collectively the "Outside Directors") are eligible to participate.
A total of 86,300 shares of Common Stock has been authorized and reserved for
issuance under the plan, subject to adjustments to reflect changes in the
Company's capitalization resulting from stock splits, stock dividends and
similar events. The plan provides that an option for 1,000 shares of Common
Stock of the Company will be granted on January 1 of each calendar year to
each Outside Director in office on that date. The plan further provides that
(i) the exercise price of each option granted under the plan may not be less
than the fair market value of the Common Stock at the date of grant of such
option, (ii) the exercise price must be paid in cash upon exercise of such
option, (iii) options granted under the plan are immediately exercisable and
expire not later than ten years from date of grant, and (iv) no option is
transferable other than by will or the laws of descent and distribution. In
the event that a participant in the plan ceases to be an Outside Director,
other than by reason of death, such participant may exercise an outstanding
option at any time within 90 days after such termination. In the event of the
death of a participant to whom any option has been granted pursuant to the
plan, such option may be exercised by the legatees of such participant or by
his personal representatives or distributees at any time within one year after
his death. Each Outside Director, consisting of Messrs. Beard, Clements and
Parker at January 1, 2000 and Messrs. Beard, Parker and Smith at January 1,
2001, received options under the plan covering 1,000 shares at option prices
of $11.81 per share at January 1, 2000 and $27.00 per share at January 1,
2001. Such options are currently exercisable and expire in January 2010 and
January 2011, respectively.

The Board of Directors has two committees. The Compensation Committee
has certain responsibilities relating to compensation of officers and employee
directors and is composed of Messrs. Beard, Parker and Smith, none of whom is
an employee nor eligible for awards under the Company's Bonus Incentive Plan,
the Executive Incentive Stock Compensation Plan or 1993 Stock Compensation
Plan. The Compensation Committee met four times during 2000. The Compensation
Committee administers awards under the Company's Bonus Incentive Plan, the
Executive Incentive Stock Compensation Plan and 1993 Stock Compensation Plan,
takes certain other actions relating to compensation matters and benefits
plans and sets the salaries of all officers. See "REPORT OF COMPENSATION
COMMITTEE."

The Audit Committee is composed of Messrs. Beard, Parker and Smith.
The duties of the Audit Committee are described in the Report of the Audit
Committee on page 10 of this Proxy Statement and in the Audit Committee
Charter attached as an Appendix to this Proxy Statement. The Audit Committee
met two times during 2000.

The Board of Directors held four meetings during 2000. All directors
attended more than 75 percent of the aggregate of all meetings of the Board of
Directors and the committees on which they served during 2000.

REPORT OF THE COMPENSATION COMMITTEE

GENERAL

The Compensation Committee consists of Messrs. Beard, Parker and
Smith, all of whom are non-employee directors. The Committee establishes the
salaries of all corporate officers and administers the Company's incentive
compensation plans other than the Outside Directors Stock Option Plan. The
Committee also reviews with the Board of Directors its recommendations
relating to the future direction of corporate compensation practices and
benefit programs.

The Compensation Committee has adopted a compensation policy which it
believes to be a balance between fair and reasonable cash compensation and
incentives linked to the Company's overall performance taking into
consideration compensation of individuals with similar duties who are employed
by the Company's peers. The policy takes into account the cyclical nature of
the oil and gas business, which may result in traditional performance
standards being skewed due to erratic product prices. An analysis of the goals
for the Company has resulted in a policy, which places emphasis on increasing
the Company's proved oil and gas reserves, coupled with maintaining an
acceptable balance between the Company's overhead and profit margin. The
Compensation Committee may award stock options and bonuses based upon the
performance of the Company and efforts of individual officers.

LONG TERM COMPENSATION

The Compensation Committee did not award any stock options or other
stock-based incentives to officers of the Company during 2000, other than
shares of Common Stock issued to Mr. Williams in lieu of cash salary under the
Company's Executive Incentive Stock Compensation Plan. See "COMPENSATION OF
THE CHIEF EXECUTIVE OFFICER."

SHORT TERM COMPENSATION

In June 2000, the Compensation Committee, upon recommendation of
management, increased the salaries of Messrs. Latham, Riggs, Groner and Reesby
by an amount equal to ten percent (10%). In October 2000, the Committee
increased the salary of Mr. Reesby by an additional amount equal to
approximately sixteen percent (16%). The Committee adjusted the salaries to
reflect the improved performance of the Company and to bring the Company
officers more in line with compensation of officers in the Company's peer
group. The Compensation Committee awarded cash bonuses in May 2000 to certain
officers for the successful negotiation of a joint venture agreement with a
major oil company to develop acreage in Eddy County, New Mexico. In October
2000, the Compensation Committee awarded cash bonuses to certain officers
based upon a review of the Company's past acquisition and divestiture
activities. The Committee believes that such bonuses serve both as a reward
for performance and an incentive for future extraordinary performance in
anticipation of such recognition.

COMPENSATION OF THE CHIEF EXECUTIVE OFFICER

Effective July 1, 2000 the Compensation Committee increased the
salary of Mr. Williams by ten percent (10%). The Committee also decided that,
consistent with the compensation strategy and policies of recent years, Mr.
Williams' salary would continue to be paid in shares of Common Stock under the
Company's Executive Incentive Stock Compensation Plan. The Committee continues
to believe that payment of Mr. Williams' salary in shares of Common Stock
assists in aligning Mr. Williams' interest with those of the other
stockholders. No stock options were awarded to Mr. Williams in 2000.

The Compensation Committee believes it has developed an appropriate
structure within which to reward and motivate its officers as they build value
for the Company's stockholders.

COMPENSATION COMMITTEE
Stanley S. Beard
Robert L. Parker
Jordan R. Smith

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee consisted of Messrs. Beard, Clements and
Parker through June 2000 and Messrs. Beard, Parker and Smith for the remainder
of the year. None of these committee members has or had a relationship with
the Company that is or was required to be disclosed under the rules of the
Securities and Exchange Commission.

EXECUTIVE COMPENSATION

The following table sets forth information with respect to the
compensation of the Company's chief executive officer and each of the other
four most highly compensated executive officers who received annual
compensation in excess of $100,000 during 2000.

SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
AWARDS
------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING ALL OTHER
NAME AND PRINCIPAL ------------------------------- OPTIONS COMPENSATION
POSITION YEAR SALARY($)(1) BONUS($)(2) (#)(3)(4) ($)(5)
- ----------------------------- --------- -------------- ------------------ ----------- ------------

Clayton W. Williams, 2000 $ 472,500 $ 35,625 - $ 7,111
Chairman of the Board, 1999 $ 420,000 $ 36,250 150,000 $ -
President and Chief 1998 $ 450,000 $ 30,000 - $ 5,209
Executive Officer

L. Paul Latham, Executive 2000 $ 204,750 $ 91,300 - $ 37,179
Vice President and Chief 1999 $ 178,942 $ 50,000 9,850 $ 14,280
Operating Officer 1998 $ 191,885 $ 22,500 3,850 $ 26,612

Mel G. Riggs, Senior Vice 2000 $ 152,250 $ 112,541 - $ 8,084
President and Chief 1999 $ 134,622 $ 43,125 7,888 $ -
Financial Officer 1998 $ 149,350 $ 21,250 2,888 $ 5,391

Jerry F. Groner, Vice 2000 $ 113,770 $ 69,966 - $ 8,164
President - Land and 1999 $ 96,744 $ 64,800 8,207 $ -
Lease Administration 1998 $ 103,193 $ 2,866 2,207 $ 3,060

Patrick C. Reesby, Vice 2000 $ 110,119 $ 8,781 - $ 5,173
President - New 1999 $ 91,125 $ 4,050 9,579 $ -
Ventures 1998 $ 97,200 $ 25,200 6,579 $ 4,788

- -----------------
(1) All of Mr. Williams' net salary for 1998, 1999 and 2000 was paid in the
form of Common Stock in lieu of cash pursuant to the Company's
Executive Incentive Stock Compensation Plan.

(2) Amounts shown in this column include director's fees for Messrs.
Williams, Latham and Riggs of $17,500 each for 1998 and 1999 and
$15,000 each for 2000. Amounts shown in this column for Mr. Groner
include director's fees of $7,500 for 1999 and $15,000 for 2000.

(3) All amounts shown represent the number of shares covered by options
granted under the Company's 1993 Stock Compensation Plan.

(4) Amounts shown in 1999 include shares covered by options granted in
connection with repricing transactions.

(5) The amounts shown in this column with respect to Mr. Latham for 1998,
1999 and 2000 include $21,298, $14,280 and $28,013, respectively, of
distributions made pursuant to two plans which were discontinued by the
Williams Companies during 1991. Until such time, the Williams Companies
assigned overriding royalty interests to certain employees to reward
such employees with incentive compensation based on the results of
drilling activities by the Williams Companies. Under this arrangement,
the Williams Companies assigned overriding royalty interests in certain
oil and gas leases to certain employees who were employed at the time
of the execution of the lease. An individual employee's overriding
royalty interest in a lease was determined at the discretion of the
management of the Williams Companies. Employees receiving overriding
royalty interests were entitled to receive revenues immediately upon
the assignment thereof and such interests were not subject to
forfeiture. The Williams Companies also granted selected employees
working interests in certain of the oil and gas properties of the
Williams Companies. Such working interests were deemed earned by and
granted to such employees upon terms determined in the sole discretion
of the management of the Williams Companies. The Company does not
anticipate re-instituting either of the arrangements described above.
All other amounts shown in this column relate to contributions made by
the Company pursuant to the Company's 401(k) Plan & Trust.

The Company has no employment agreements with any of its executive
officers. Although Messrs. Williams and Latham devote a majority of their time
to the Company, both of them are engaged in other business activities. Mr.
Williams devotes a portion of his time to certain Williams Entities. Mr.
Latham is also employed by and devotes a portion of his time to the business
of certain Williams Entities. Both Messrs. Williams and Latham receive
compensation from the Williams Entities which compensation is not borne,
directly or indirectly, by the Company and does not relate to any services
provided to the Company.

All options in the "Summary Compensation Table" have been granted
pursuant to the Company's 1993 Stock Compensation Plan which provides for the
grant of non-qualified options to officers, directors (other than Outside
Directors), employees and advisors of the Company or a subsidiary of the
Company. A total of 1,798,200 shares of Common Stock is authorized and
reserved for issuance under the plan subject to adjustments to reflect changes
in the Company's capitalization resulting from stock splits, stock dividends
and similar events. The Compensation Committee has the sole authority to
interpret the plan, to determine the persons to whom options will be granted,
to determine the basis upon which the options will be granted, and to
determine the exercise price, duration and other terms of options to be
granted under the plan; provided that (i) the exercise price of each option
granted under the plan may not be less than the fair market value of the
Common Stock at the date of grant of such option, (ii) the exercise price must
be paid in cash upon exercise of such option, (iii) no option may be
exercisable more than ten years after the date of grant, and (iv) no option is
transferable other than by will or the laws of descent and distribution. No
option is exercisable after an optionee terminates his relationship with the
Company or a subsidiary of the Company, subject to the right of the
Compensation Committee to extend the exercise period for not more than 90 days
following the date of termination of an optionee's employment. If an
optionee's employment is terminated by reason of disability, the Compensation
Committee has the authority to extend the exercise period for not more than
one year following the date of termination of the optionee's employment. If an
optionee dies and has not fully exercised options granted under the plan, such
options may be exercised in whole or in part within 90 days of the optionee's
death by the executors or administrators of the optionee's estate or by the
optionee's heirs. The vesting period, if any, specified for each option will
be accelerated upon the occurrence of a change of control or a threatened
change of control of the Company.

TABLE OF AGGREGATED OPTION EXERCISES IN 2000 AND OPTION VALUES AS OF DECEMBER 31, 2000

NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT DECEMBER 31, 2000 (#) OPTIONS AT DECEMBER 31, 2000 ($)
ACQUIRED ON VALUE -------------------------------- ---------------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ------------ ------------ ----------- ------------- ------------- -------------

Clayton W. Williams - $ - 309,250 - $ 4,618,563 $ -

L. Paul Latham 9,300 $ 285,188 3,960 5,890 $ 85,140 $ 126,635

Mel G. Riggs 4,000 $ 139,000 3,300 4,588 $ 70,950 $ 98,642

Jerry F. Groner - $ - 5,785 4,247 $ 128,484 $ 91,311

Patrick C. Reesby - $ - 2,805 5,289 $ 60,308 $ 113,714

- ------------------
(1) The value of In-the-Money options was computed at $27.00 per share,
which was the market price for the Common Stock on December 31, 2000.

REPORT OF THE AUDIT COMMITTEE

The following is the report of the Audit Committee with respect to
the Company's audited financial statements for the year ended December 31,
2000.

The Audit Committee has reviewed and discussed the Company's audited
financial statements with management. The Audit Committee has discussed with
Arthur Andersen LLP, the Company's independent accountants, the matters
required to be discussed by Statement of Auditing Standards No. 61,
COMMUNICATION WITH AUDIT COMMITTEES which includes, among other items, matters
related to the conduct of the audit of the Company's financial statements. The
Audit Committee has also received written disclosures and the letter from
Arthur Andersen LLP required by Independence Standards Board Standard No. 1,
which relates to the accountants' independence from the Company and its
entities, and has discussed with Arthur Andersen LLP their independence from
the Company.

The Audit Committee acts pursuant to the Audit Committee Charter, a
copy of which is attached as an Appendix to this Proxy Statement. Each of the
members of the Audit Committee qualifies as an "independent" Director under
the current listing standards of National Association of Securities Dealers.

Based on the review and discussions referred to above, the Audit
Committee recommended to the Company's Board of Directors that the Company's
audited financial statements be included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2000.

AUDIT COMMITTEE
Robert L. Parker
Stanley S. Beard
Jordan R. Smith

FEES TO ARTHUR ANDERSEN LLP

AUDIT FEES

During 2000, the Company incurred fees for professional services
rendered by Arthur Andersen LLP, its independent accountants, totaling $83,500
for the audit of its annual financial statements and for the review of its
quarterly financial statements. In addition, a limited partnership of which
the Company serves as general partner incurred audit fees totaling $15,000.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

Arthur Andersen LLP did not provide any services to the Company
during 2000 related to financial information systems design and implementation.

ALL OTHER FEES

During 2000, the Company incurred fees for professional services
rendered by Arthur Andersen LLP totaling $52,500 for accounting and tax
consulting and for audit services related to an employee benefit plan. In
addition, a limited partnership of which the Company serves as general partner
incurred fees of $13,000 for tax compliance services.

RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS

Arthur Andersen LLP, who have been the Company's independent
accountants since inception, have been selected by the Board of Directors,
upon recommendation of the Audit Committee, to be its independent accountants
for the current year. A representative of this firm will be present at the
Annual Meeting of Stockholders. This representative will have an opportunity
to make a statement if he desires to do so and will be available to respond to
stockholder questions.

COMPARISON OF CUMULATIVE TOTAL SHAREHOLDER RETURN

Set forth below is a line graph comparing the percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the total return of the Nasdaq Stock Market's Market Index and a peer group
for the period from December 31, 1995, to December 31, 2000. The peer group is
composed of all the crude petroleum and natural gas companies with stock
trading on the Nasdaq Stock Market's National Market System within SIC Code
1311, consisting of approximately 189 companies. The chart indicates the
value, at the conclusion of each fiscal year from December 31, 1995 to
December 31, 2000, of $100 invested at December 31, 1995 and assumes
reinvestment of all dividends. The Company paid no dividends during this
five-year period.

EDGAR REPRESENTATION PERFORMANCE GRAPH

NASDAQ
MARKET PEER
DATE COMPANY INDEX GROUP
---- ------- ------- ------

12/95 100.00 100.00 100.00
12/96 534.62 124.27 132.97
12/97 461.54 152.00 134.78
12/98 307.69 214.39 107.96
12/99 363.46 378.12 131.87
12/00 830.77 237.66 167.53

CERTAIN TRANSACTIONS AND RELATIONSHIPS

The Company and the Williams Entities are parties to an agreement
(the "Service Agreement") pursuant to which the Company furnishes services to,
and receives services from, such entities. Under the Agreement, the Company
provides legal, payroll, benefits administration, and financial and accounting
services to the Williams Entities, as well as lease operating and technical
services with respect to certain properties owned by the Williams Entities.
The Williams Entities provide tax preparation services, tax planning services,
and business entertainment to or for the benefit of the Company. To the extent
that the Company has provided services to the Williams Entities at cost under
the Service Agreement, the Company believes that the terms upon which it has
provided such services may be less favorable than the terms the Company could
have negotiated with unaffiliated third parties. Conversely, to the extent
that the Company has received services from the Williams Entities at cost
under the Service Agreement, the Company believes that the terms upon which
such services were available to the Company may be more favorable than the
terms the Company could have negotiated with unaffiliated third parties.
During 2000, the Williams Entities paid the Company approximately $665,000,
while the Company paid the Williams Entities approximately $172,000, both
pursuant to the Service Agreement.

RECEIPT OF STOCKHOLDER PROPOSALS

All stockholder proposals submitted for inclusion in the Company's
proxy statement and form of proxy for the Annual Meeting of Stockholders of
the Company to be held in 2002 must be received at the Company's principal
executive offices, Six Desta Drive, Suite 6500, Midland, Texas 79705,
Attention: Mel G. Riggs, by December 14, 2001. Such proposals must also comply
with the applicable regulations of the Securities and Exchange Commission.
Notice to the Company of all other stockholder proposals (not submitted for
inclusion in the Company's proxy statement and form of proxy) for the 2002
Annual Meeting will not be considered timely unless received at the Company's
principal executive offices as set forth above on or before February 27, 2002.

OTHER BUSINESS

The Company knows of no other business to come before the meeting.
If, however, other matters properly come before the meeting, it is the
intention of the persons named in the enclosed proxy to vote the shares
represented thereby in accordance with their best judgment.

AVAILABILITY OF ANNUAL REPORT

The Annual Report of the Company for the fiscal year ended December
31, 2000, which contains the Company's Form 10-K including financial
statements, has been mailed to each stockholder of record on the
above-referenced record date.

By order of the Board of Directors,
Mel G. Riggs
Secretary

Dated: April 17, 2001

APPENDIX

CLAYTON WILLIAMS ENERGY, INC.

AUDIT COMMITTEE OF BOARD OF DIRECTORS

CHARTER

PURPOSE AND PRINCIPLES

There shall be a committee of the board of directors (the "Board") to
be known as the Audit Committee. The Audit Committee shall provide assistance
to the Board in fulfilling their responsibility to the shareholders and
investment community relating to the accounting and financial reporting
practices of Clayton Williams Energy, Inc. (the "Company"), and the quality
and integrity of the Company's financial reports. To achieve these purposes,
the Audit Committee shall be guided by the following principles:

o Management of the Company is responsible for preparing the
Company's financial statements, and the independent auditors
are responsible for auditing those financial statements;

o The Audit Committee's role is one of oversight in monitoring
components of the audit and financial reporting processes;

o The Audit Committee must provide an open avenue of independent
communication and flow of information between the Audit
Committee and the independent auditors;

o The Audit Committee must have candid discussions with
management and the independent auditors regarding accounting
and financial reporting issues; and

o Members of the Audit Committee must be diligent and
knowledgeable regarding accounting and financial reporting
issues in order to be effective.

COMPOSITION

The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors and shall
be free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment as a member of
the Audit Committee. A director will not be considered independent if he or
she has:

o Been employed by the Company or its affiliates in the current
or past three years;

o Accepted any compensation from the Company or its affiliates
in excess of $60,000 during the previous fiscal year (except
for board services, retirement plan benefits, or
non-discriminatory compensation);

o An immediate family member who is, or has been in the past
three years, employed by the Company or its affiliates as an
executive officer;

o Been a partner, controlling shareholder or an executive
officer of any for-profit business to which the Company made,
or from which it received, payments (other than those which
arise solely from investments in the Company's securities)
that exceed 5% of the organization's consolidated gross
revenues for that year, or $200,000, whichever is more, in any
of the past three years; or

A-1

o Been employed as an executive officer of another entity where
any of the Company's executives serve on that entity's
compensation committee.

Each director appointed to the Audit Committee must be able to read
and understand fundamental financial statements, including balance sheets,
income statements and statements of cash flows. At least one director must
have past employment experience in finance or accounting, requisite
professional certification in accounting, or other comparable experience or
background, including a current or past position as a chief executive or
financial officer or other senior officer with financial oversight
responsibilities.

ACCOUNTABILITY OF INDEPENDENT AUDITORS

The independent auditors are ultimately accountable to the Board and
the Audit Committee. Accordingly, the Audit Committee has the authority and
the responsibility to select, evaluate and replace the independent auditor.
The Audit Committee is responsible for ensuring auditor independence.

SPECIFIC DUTIES OF THE AUDIT COMMITTEE

In carrying out the purposes, principles and responsibilities of the
Audit Committee, the Audit Committee shall:

o Receive from the independent auditors a formal written
statement describing all relationships between the independent
auditors and the Company, including non-audit services and
fees;

o Determine auditor independence based upon such disclosures;

o Select the independent auditors and instruct management to
engage such auditors to conduct an audit of the consolidated
financial statements of the Company and its subsidiaries in
accordance with auditing standards generally accepted in the
United States;

o Instruct management to engage the independent auditors to
review the quarterly consolidated financial statements of the
Company and its subsidiaries in accordance with Statement of
Auditing Standards No. 71. The engagement letter shall require
the independent auditors to (i) deliver the quarterly review
report to management of the Company prior to the filing of the
Company's quarterly report on Form 10-Q and (ii) attempt to
discuss with the Audit Committee, prior to such filings on
Form 10-Q, any events, transactions and changes in accounting
estimates which were considered by the independent auditors in
performing the quarterly review to have significantly affected
the quality of the Company's financial reporting;

o Discuss with the independent auditors and financial management
the scope of the proposed audit for the current year and the
audit procedures to be utilized, and at the conclusion thereof
review such audit, including any comments or recommendations
of the independent auditors;

o Review with the independent auditors and financial and
accounting personnel, the adequacy and effectiveness of the
accounting and financial controls of the Company, and elicit
any recommendations for the improvement of such internal
control procedures or particular areas where new or more
detailed controls or procedures are desirable. Particular
emphasis should be given to the adequacy of such internal
controls to expose any payments, transactions, or procedures
that might be deemed illegal or otherwise improper;

o Review the financial statements contained in the annual report
to shareholders with management and the independent auditors
to determine that the independent auditors are satisfied with
the disclosure and content of the financial statements to be
presented to the shareholders. Any changes in accounting
principles should be reviewed;

A-2

o Recommend to the Board the inclusion of the Company's
consolidated financial statements in the annual report on Form
10-K prior to its filing;

o Discuss with the independent auditors all items required to be
communicated to the Audit Committee in accordance with
Statement of Auditing Standards No. 61, including the
auditors' judgment about the quality, not just the
acceptability, of the Company's accounting principles;

o Provide sufficient opportunity for the independent auditors to
meet with members of the Audit Committee without members of
management present. Among the items to be discussed in these
meetings are the independent auditors' evaluation of the
Company's financial, accounting, and auditing personnel, and
the cooperation that the independent auditors received during
the course of the audit;

o Submit the minutes of all meetings of the Audit Committee to,
or discuss the matters discussed at each committee meeting
with, the Board. Investigate any matter brought to its
attention within the scope of its duties, with the power to
retain outside counsel for this purpose if, in its judgment,
that is appropriate;

o Prepare a report to be included in the Company's annual proxy
statement stating the Audit Committee's findings that result
from its financial reporting oversight responsibilities;

o Review and reassess on an annual basis the adequacy of this
Charter, and make amendments as necessary to further the
purpose, principles and responsibilities of the Audit
Committee. The Audit Committee shall first approve the
adoption of the Charter or any amendments thereto, and then
submit the Charter to the Board for approval; and

o Authorize an officer of the Company to certify to the
applicable stock exchange that (i) the Audit Committee has
adopted a formal written Charter and has reviewed and
reassessed the adequacy of the Charter on an annual basis, and
(ii) the Audit Committee has met and will continue to meet the
membership requirements set forth in this Charter.

A-3

CLAYTON WILLIAMS ENERGY, INC.

ANNUAL MEETING OF STOCKHOLDERS

WEDNESDAY, MAY 16, 2001
10:00 A.M.

PETROLEUM CLUB OF MIDLAND
501 W. WALL
MIDLAND, TEXAS

CLAYTON WILLIAMS ENERGY, INC.
SIX DESTA DRIVE, SUITE 6500
MIDLAND, TEXAS 79705-5513 PROXY
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON MAY 16, 2001.

The undersigned hereby appoints L. Paul Latham and Mel G. Riggs, or either of
them, with full power of substitution, to act as attorneys and proxies for the
undersigned, and to vote all shares of Common Stock of Clayton Williams Energy,
Inc. (the "Company") which the undersigned is entitled to vote at the Meeting
of Stockholders, to be held at the Petroleum Club of Midland, 501 W. Wall,
Midland, Texas on May 16, 2001 at 10:00 a.m., local time, and at any and all
adjournments thereof.

Should the undersigned be present and elect to vote at the Meeting or any
adjournment thereof, and after notification to the Company's Corporate
Secretary of the decision to terminate this proxy, then the power of said
attorneys and proxies shall be deemed terminated and of no further force and
effect.

The undersigned acknowledges receipt from the Company prior to the execution of
this Proxy, of a Notice of the Meeting, and a Proxy Statement, both dated April
17, 2001, and a copy of the Company's 2000 Annual Report.

PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY

SEE REVERSE FOR VOTING INSTRUCTIONS.

- PLEASE DETACH HERE -

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.

1. Election of directors: 01 Clayton W. Williams 02 L. Paul Latham

[ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
(except as marked)

(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ____________________________
ANY INDICATED NOMINEE, WRITE THE NUMBER(S) OF THE
NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) ____________________________

THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, IT
WILL BE VOTED FOR THE DIRECTORS SHOWN ABOVE. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THE PROXY HOLDERS IN THEIR BEST
JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.

Address Change? Mark Box [ ]
Indicate changes below: Date _______________________________

_________________________________________

_________________________________________
Signature(s) in Box
Please sign exactly as your name appears
on this proxy card. When signing as
attorney, administrator, trustee or
guardian, please give your full title. If
shares are held jointly, each holder
should sign.