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| Costilla Hedges Oil at $16.25 Per Barrel: |
Contracts Effective for Remainder of 1998; 1999 Production Hedged at $16.40
Per Barrel
MIDLAND, Texas, Sept. 1 /PRNewswire/ -- Costilla Energy, Inc.
(Nasdaq: COSE) announced today that it has hedged approximately 95 percent of
its current average daily oil production, at a price of $16.25 per barrel,
through commodity price swap contracts effective September 1 through
December 31, 1998. The company has also executed hedges on about 95 percent
of current level of oil production at the price of $16.40 per barrel for oil
produced during the entire 1999 calendar year. The referenced prices are
based upon the price at which West Texas Intermediate (WTI) crude oil settles
on the NYMEX. The contracts do not apply for trading days at the close of
which the NYMEX price for WTI crude falls below $13.25 per barrel in 1998, and
$13.50 in 1999.
"Our company has concentrated on drilling for gas throughout 1998, and our
rapidly-growing gas production is our best hedge against erratic oil prices,"
said Mike Grella, president and CEO of Costilla Energy. "These new oil hedges
provide additional evidence that, in spite of short term soft oil prices on
the open market, Costilla is prepared to sustain cash flow from our existing
production. Over the long term, we remain extremely bullish about both oil
and gas and the diverse mix of projects in our portfolio. This company is
extremely well positioned to maximize opportunities when commodity prices on
both fronts rebound."
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.
back to topRelated links:
Company News On-Call:
fax, 800-758-5804, ext. 126873
CONTACT:
Mike Grella, President & CEO, or Guy McCrary,
Manager of Investor Relations, both of Costilla Energy, Inc.,
915-683-3092
