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| Costilla Initiates Stock Buyback Plan; Board Authorizes Repurchase of 500,000 Shares |
MIDLAND, Texas, July 15 /PRNewswire/ -- Costilla Energy, Inc. (Nasdaq: COSE) reported today that its board of directors has authorized the repurchase of 500,000 shares of the company's common stock, or about five percent of the 9,981,000 outstanding common shares. "This decision reflects our management's conviction that the current market price of our stock does not appropriately indicate the company's underlying value," said Michael J. Grella, Costilla's president and CEO. "We are firmly convinced that the recent price levels substantially undervalue our ongoing operating successes and our significant prospects going forward." Costilla recently reported that it had exited the second quarter of 1998 producing approximately 93.7 million cubic feet of gas equivalent per day (MMCFEPD), an increase of about 42 percent over average daily production of 66 MMCFEPD at the beginning of 1998. The company's average net daily production grew at the compounded annual growth rate of 98 percent over the four years ended December 31, 1997. With almost one million acres of oil and gas properties under leasehold, Costilla has an inventory of more than 600 prospective drilling locations throughout its core operating areas in the Permian Basin, the Rocky Mountains, and South and East Texas. Costilla Energy, Inc. is an independent energy company actively 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. Additional information about Costilla Energy is 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.
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CONTACT:
Mike Grella, President & Chief Executive
Officer of Costilla Energy, Inc., 915-683-3092
