Costilla's Bank Payment Extended to June 18th

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Costilla's Bank Payment Extended to June 18th

    MIDLAND, Texas, June 1 /PRNewswire/ -- Costilla Energy, Inc.
(Nasdaq: COSE) reported today that its bank credit facility has been amended
providing for an extension of the $10.2 million principal payment until
June 18th.  As previously reported, the Company is in the process of divesting
its Rocky Mountain oil and gas properties.
    Costilla Energy, Inc. is an independent oil and gas company with
operations primarily in the Gulf Coast region of South Texas and the Permian
Basin of West Texas and Southeastern New Mexico.  Headquartered in Midland,
Texas, the Company and its predecessors have been in business since 1988.  The
Company's common stock is traded on the Nasdaq National Market under the
symbol COSE.  Additional information about Costilla is available on the
Internet at http://www.costillaenergy.com.
    Certain statements in this news release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995.  Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance, or achievements of Costilla Energy, Inc. to be materially
different from any future results, performance, or achievements expressed or
implied by such forward-looking statements.  Such factors include, among
others, the following:  the volatility of oil and gas prices; the Company's
ability to replace its oil and gas reserves; the availability of capital
resources; the reliance upon estimates of proved reserves; operating hazards
and uninsured risks; competition; government regulation; and the ability of
the Company to implement its business strategy.  Additional information is
available in the Company's filings with the Securities and Exchange
Commission, which are incorporated by this reference as though fully set forth
herein.

SOURCE Costilla Energy, Inc.

http://www.costillaenergy.com
Company News On-Call:

http://www.prnewswire.com/comp/126873.html or fax,
800-758-5804, ext. 126873
CONTACT:
Guy McCrary, Manager of Investor Relations of
Costilla Energy, Inc., 915-683-3092