Production Increased 13.2% to a Record 15.5 Bcfe

           Board of Directors Authorizes Repurchase of Common Stock

    EDISON, N.J., Aug. 11 /PRNewswire/ -- KCS Energy, Inc. (NYSE: KCS) today
announced a second quarter net loss of $38.9 million, or $1.32 per share, on
revenue of $33.7 million.  Earnings were negatively impacted by a $57.6
million pre-tax, ($37.5 million after-tax) non-cash ceiling writedown and a
higher depletion rate, both due to dramatically lower energy prices.  The
Company recorded this non-cash writedown in accordance with accounting
procedures prescribed by the Securities and Exchange Commission which requires
a "ceiling test" whereby capitalized oil and gas property costs are limited to
the present value of future net revenues from estimated production of proved
oil and gas reserves, discounted at 10%.  The test assumes that all of the
Company's future production will be produced at the low energy prices in
effect at June 30, 1998.  Without the effect of the non-cash ceiling
writedown, the Company's second quarter net loss would have been $1.4 million,
or $0.05 per share.  This compares to second quarter 1997 net income of $2.3
million, or $0.08 per share, on revenue of $32.6 million.  Earnings before
interest, taxes, DD&A and other income (EBITDA) was $22.0 million for the
second quarter of 1998, compared to $21.9 million for the prior-year period.
    For the six-month period of 1998, total net loss was $39.0 million, or
$1.32 per share, compared to net income from continuing operations of $7.7
million, or $0.27 per share, for the 1997 comparable period.  EBITDA for the
six-month period was $42.4 million, compared to $50.3 million in 1997.
    Average realized oil and gas prices for the 1998 second quarter declined
7% to $2.08 per Mcfe compared to $2.24 per Mcfe for the same period a year
ago.  Natural gas prices averaged $2.17 per Mcf during the 1998 period
compared to $2.07 per Mcf in 1997.  Oil prices averaged $10.82 per barrel
compared to $17.89 per barrel in 1997.
    For the six months ended June 30, 1998 average realized oil and gas prices
declined 15% to $2.13 per Mcfe compared to $2.51 per Mcfe for the same period
in 1997.  Natural gas prices averaged $2.17 per Mcf during the 1998 period
compared to $2.33 per Mcf in 1997.  Oil prices averaged $11.86 per barrel
compared to $19.60 per barrel in 1997.
    KCS President and Chief Executive Officer James W. Christmas stated, "KCS'
balanced approach of acquisitions combined with development and exploratory
drilling in three core areas gives us the flexibility we need in today's tough
energy market.  For example, while prices remain exceptionally low in the
Rocky Mountain region we can deploy capital selectively to areas that offer
the most promising economics.  While today's depressed commodity prices are
not reflected in the conventional acquisition market, acquisitions that
reflect the current price environment can be made through the Company's VPP
program.  This niche position gives us an advantage on which we will continue
to capitalize."

    Record Oil and Gas Production
    The Company's oil and gas production increased 13.1% over the first
quarter of 1998 and 13.2% over the prior-year period to a  record 15.5 billion
cubic feet equivalent (Bcfe) during the quarter.  Mr. Christmas attributed
this success to excellent results from 1998 drilling programs and to success
in its acquisition program, especially through its VPP program.  In a VPP
arrangement, typically with a small to mid-size independent operator, KCS
obtains oil and natural gas reserves free of operating costs (similar to a
royalty interest).  The arrangement allows KCS to diversify its reserve base
and achieve attractive rates of return while minimizing exposure to business
and operating risks.
    "We have been utilizing VPPs as an acquisition method for four years and
the results continue to exceed our expectations," Mr. Christmas said.  "During
the first half of 1998, we invested $54.5 million through the VPP program,
exceeding the amount invested under the entire program in 1997.  As an added
benefit of the program, KCS was able to acquire an expanded interest in one
onshore and nine offshore properties initially acquired under the VPP program.
This expanded interest gives us essentially a working interest over the full
life of the properties with reserve upside potential but still without the
burden of operating or abandonment costs," he said.
    The Company's second quarter volumes were boosted by a full quarter of
production from the Garden Banks 134 #1 well located in the Gulf of Mexico.
This well, in which KCS has a 73% net revenue interest as a result of the
follow-on acquisition mentioned above, has steadily been producing at 15.0
million cubic feet of natural gas per day and 500 barrels of condensate per
day.  Since the end of the quarter, another well in that transaction, the
Brazos 544 #1 well, located in the Texas Gulf Coast, was completed and will
further increase production in the third quarter.  This well, in which KCS has
a 61.2% net revenue interest, initially tested at 12.0 million cubic feet of
natural gas per day.

    Rocky Mountain Operations
    Prices at the Company's Manderson Field in Wyoming have further weakened,
continuing an 18-month decline during which prices have decreased nearly 65%.
These prices, which averaged $8.16 per barrel of oil in the second quarter,
combined with high unit production costs at the current production levels,
have resulted in operating losses for our Rocky Mountain operations totaling
$1.7 million during the second quarter.  According to KCS Energy Senior Vice
President and Chief Operating Officer William Hahne, "We have curtailed
further capital expenditures and are concentrating on expense reductions.
Cost reduction measures implemented, including Company and contractor labor
reductions, should reduce the operating and administrative expenses of the
Rocky Mountain operations by 30%.  These actions should enable the Rocky
Mountain operations to achieve a breakeven point on a cash basis.  In the
meantime, we continue to evaluate how best to proceed with development of the
field and its multiple reservoirs."
    To strengthen the technical efforts associated with the Rocky Mountain
operation, the Company hired Stephen L. Rabenaldt as Vice President of
Development for KCS Mountain Resources, Inc.  Mr. Rabenaldt has been a
petroleum engineer and executive for 25 years, managing drilling, engineering
and exploitation activities throughout the U.S.

    Mid-Continent Operations
    "The Mid-Continent business unit has accomplished excellent drilling
results in the second quarter of 1998.  Of the 13 wells spudded, 12 were
successful.  Notably, the Commissioners #1 well in Latimer County, Oklahoma,
in which KCS has a 69% working interest, tested at 3.9 million cubic feet of
natural gas per day and the Ehrlich #1 well in Ellis County, Oklahoma, in
which KCS has a 24% working interest, tested at 2.9 million cubic feet of
natural gas and 23 barrels of condensate per day.  In addition, seven
completions have tested in the one- to two-million cubic feet per day range.
Other wells are currently being completed.  The Company anticipates drilling
an additional 10 to 15 wells in the region during the balance of 1998," Mr.
Hahne said.

    Gulf Coast Operations
    In the Gulf Coast business unit, development of the Langham Creek Field in
Texas continues.  The Josey Ranch #3-16 well, in which KCS has an 87.5%
working interest, was completed and placed on production at 4.4 million cubic
feet of natural gas per day.  Initial interpretation of the 3-D seismic survey
shot over Langham Creek late in 1997 is completed and indicates multiple
additional drilling locations, the first of which should commence drilling
within thirty days.  The Company also completed the Fleury #1 well at Bayou
Carlin, in which the KCS has a 50.0% working interest, which tested at 2.1
million cubic feet of gas per day.  That well is awaiting pipeline connection.
    "There has been considerable activity with respect to the Dickenson Field
near Galveston, Texas, in which the Company acquired a 90% net revenue
interest for $4.9 million on April 30," Mr. Hahne said.  "At that time, the
field was producing 1.8 million cubic feet of gas per day and no oil.  Through
relatively inexpensive field and well work over a two-month period, KCS has
more than doubled production in this field to 3.8 million cubic feet of gas
and 350 barrels per day of oil.  Additionally, the Company is negotiating to
obtain 3-D seismic surveys over the Dickinson Field and neighboring Gillock
fields to evaluate deeper Vicksburg potential, as well as shallow
opportunities."

    Management Update
    "At the beginning of 1998, I reported that with the significant growth KCS
has experienced, it was important to bring in skilled professionals with
proven expertise and commitment and I am pleased to say that we have
accomplished that goal.  The expanded team of highly experienced individuals
will allow optimum profitability with continued growth during this period of
volatile commodity prices," Mr. Christmas said.  "For the remainder of the
year our strategy will be to reduce costs and conserve capital, to capitalize
on opportunities that arise in the cyclical downturn in energy prices such as
we have been experiencing."

    Stock Repurchase Plan
    On August 6, 1998, the Company's Board of Directors authorized the
repurchase of up to 1,000,000 shares of its Common Stock in open market
transactions on the New York Stock Exchange.  Repurchases will be made from
time to time and upon terms determined by management.
    KCS is an independent energy company engaged in the acquisition,
exploration, development and production of natural gas and crude oil with
operations in the Rocky Mountain, Mid-Continent and Gulf Coast regions.  The
Company also owns oil and gas property interests in the Gulf of Mexico and
Michigan's Niagaran Reef trend.
    This press release contains forward-looking statements that involve a
number of risks and uncertainties.  Among the important factors that could
cause actual results to differ materially from those indicated by such
forward-looking statements are delays and difficulties in developing currently
owned properties, the failure of exploratory drilling to result in commercial
wells, delays due to the limited availability of drilling equipment and
personnel, fluctuations in oil and gas prices, general economic conditions and
the risk factors detailed from time to time in the Company's periodic reports
and registration statements filed with the Securities and Exchange Commission.

                                 KCS Energy, Inc.
                           Condensed Income Statements

                                      Three Months Ended    Six Months Ended
    (Amounts in Thousands                   June 30,            June 30,
    Except Per Share Data)             1998       1997      1998       1997

    Oil and gas revenue               $32,157   $30,589   $61,863  $ 69,823
    Other revenue, net                  1,506     1,962     3,109     2,607
    Total revenue                      33,663    32,551    64,972    72,430

    Operating costs and expenses
      Lease operating expenses          7,642     7,011    14,918    13,699
      Production taxes                  1,008     1,312     2,058     3,086
      General and administrative        2,993     2,289     5,592     5,338
      Depreciation, depletion
        and amortization               15,547    13,914    28,375    28,565
      Writedown of oil and
        gas properties                 57,631        --    57,631        --
    Total operating costs
      and expenses                     84,821    24,526   108,574    50,688

    Operating income (loss)           (51,158)    8,025   (43,602)   21,742

    Interest and other income, net        101       119       199       230
    Interest expense                   (8,925)   (4,536)  (16,802)   (9,798)
    Income (loss) before
      income taxes                    (59,982)    3,608   (60,205)   12,174

    Federal and state income
      taxes (benefit)                 (21,105)    1,316   (21,188)    4,477

    Net income (loss) from
      continuing operations           (38,877)    2,292   (39,017)    7,697

    Net income (loss) from discontinued operations
      Net loss from operations             --        --        --       (72)
      Net gain on disposition              --        --        --     5,461

    Net income (loss)                $(38,877)   $2,292  $(39,017) $ 13,086

    Basic and diluted earnings
      (loss) per share
      of common stock
      Continuing operations            $(1.32)    $0.08    $(1.32)    $0.27
      Discontinued operations              --        --        --      0.19

    Total earnings (loss) per share    $(1.32)    $0.08    $(1.32)    $0.46

    Weighted average shares
      outstanding                      29,480    29,272    29,461    28,311


                                 KCS Energy, Inc.
                             Condensed Balance Sheets

                                                     June 30,     December 31,
    (Thousands of Dollars)                             1998           1997
    Assets
    Cash                                              $6,227         $4,802
    Other current assets                              36,102         46,867
    Property, plant and equipment, net               455,107        426,333
    Deferred taxes and other assets                   48,916         24,412
      Total assets                                  $546,352       $502,414

    Liabilities and stockholders' equity
    Current liabilities                              $45,986        $64,024
    Deferred credits and other liabilities               875            875
    Long-term debt                                   393,890        292,445
    Stockholders' equity                             105,601        145,070
      Total liabilities and stockholders' equity    $546,352       $502,414

                        Condensed Statements of Cash Flow

                                                        Six Months Ended
                                                            June 30,
                                                      1998            1997
    Net income (loss)                               $(39,017)       $13,086
    DD&A                                              28,375         28,565
    Writedown of oil and gas properties               57,631             --
    Gain on sale of discontinued operations               --         (5,461)
    Other                                            (20,315)         4,710
                                                      26,674         40,900
    Net changes in assets and liabilities             (7,659)         4,683
    Net cash provided by operating activities         19,015         45,583

    Cash flow from investing activities:
    Investment in oil and gas properties            (117,494)       (85,436)
    Proceeds from sale of pipeline assets                 --         27,907
    Proceeds from sale of oil and gas
      properties                                       4,815          3,712
    Investment in other property, plant
      and equipment                                   (2,101)        (1,274)
    Net cash used in investing activities           (114,780)       (55,091)

    Cash flow provided by financing activities        97,190          8,951
    Net increase (decrease) in cash
      and cash equivalents                            $1,425          $(557)

    EBITDA (from continuing operations)*             $42,404        $50,307

    * Earnings before interest, taxes, DD&A, and other income.EBITDA is not a
    measure of financial performance or liquidity under generally accepted
    accounting principles and should not be considered in isolation.


                                 KCS Energy, Inc.
                                Supplemental Data

                                       Three Months Ended   Six Months Ended
                                            June 30,            June 30,
                                         1998      1997       1998       1997
    Production data:
      Oil (Mbbl)                          489       427       857       882
      Liquids (Mbbl)                       35        28        56        70
      Gas (MMcf)                       12,312    10,920    23,637    22,159
    Total production (MMcfe)           15,453    13,648    29,112    27,872

    Other data:
    Average sales prices
      Oil (per bbl)                    $10.82    $17.89    $11.86    $19.60
      Liquids (per bbl)                  5.48     10.73      6.77     11.76
      Gas (per Mcf)                      2.17      2.07      2.17      2.33
      Total (per Mcfe)                   2.08      2.24      2.13      2.51

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