Migl-Mitchell #2 Penetrates 274 Feet of Productive Wilcox Sands

                  Gas Production Anticipated in Early April

    MIDLAND, Texas, March 23 /PRNewswire/ -- Costilla Energy, Inc.
(Nasdaq:  COSE) announced today that the company's previously announced Migl-
Mitchell #2 has identified 274 net feet of productive Wilcox sands in route to
a total depth of 15,846 feet.  This well adds 30 billion to 40 billion cubic
feet to the company's natural gas reserves.  The Migl-Mitchell #2 has been
drilled to a separate fault block from the previously announced Migl-Mitchell
#1, which is currently producing at a daily rate of about 10 million cubic
feet per day.  Initial production on the Migl-Mitchell #2 is expected in early
April.
    Costilla owns a 100 percent working interest, 80 percent net revenue
interest, in the Migl-Mitchell #2, which is located on the company's Southwest
Speaks property.  The company has 7,865 acres under lease in this Lavaca
County, Texas prospect.
    Costilla also reported that production has been increased from the Scott
& Hopper GU 1-5 to approximately 2.2 million cubic feet of gas plus 40 barrels
of condensate per day on flowing tubing pressure of 2,500 pounds.
    Costilla Energy, Inc. is an independent energy company engaged in the
exploration, acquisition and development of oil and gas properties, with
operations primarily in the Permian Basin of Texas and New Mexico, South and
East Texas and the Rocky Mountain regions.  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.
    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.  These factors are discussed
in more detail in the Company's prospectus for its initial public offering of
common stock.

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