Clayton Williams Energy said to explore sale

Clayton Williams Energy, the oil and gas company run by Texas wildcatter Clayton “Claytie” Williams Jr., is exploring a sale, according to people familiar with the matter.

The shale producer is working with a financial adviser to solicit offers from potential buyers, said the sources, who asked not to be identified because the matter isn’t public. The company has just begun reaching out to suitors and it may decide to remain independent, one person said.

Shares of the Midland-based company (ticker: CWEI) rose as much as 25 percent to $69.37 after Bloomberg News reported the company’s interest in selling, and closed up 9.6 percent at $60.78.

A representative for Clayton Williams Energy did not immediately return two calls requesting comment. But a Clayton Williams executive alluded to the prospect of an outright sale in August while discussing the company’s strategy for navigating the industry downturn.

“We are considering everything,” Clayton Williams President Mel Riggs said during a presentation at an industry conference. “We have to keep an eye on the exit. There’s a point where that may be the right thing to do.”

Clayton Williams — whose namesake founder and 84-year-old chief executive started the company in 1991 after an infamous failed campaign for Texas governor — has good assets but a bad balance sheet, according to analysts. That means it controls a lot of high-value land — about 340,000 acres in two of the most productive shale basins in the U.S. — but can barely afford the operating expenses need to tap into it.

This story was originally published October 14, 2015 at 5:04 PM with the headline "Clayton Williams Energy said to explore sale."