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| Costilla Announces $410 Million Acquisition From Pioneer; Acquisition Will Triple Costilla's Size, Add Significantly to Exploration Opportunities |
MIDLAND, Texas, Sept. 8 /PRNewswire/ -- Costilla Energy, Inc. (Nasdaq: COSE) announced today that it has executed a purchase and sale agreement with Pioneer Natural Resources Company (NYSE, TSE: PXD) whereby Costilla will acquire from Pioneer selected oil and gas assets for approximately $410 million. The assets are located primarily in the Gulf Coast region of Texas where Costilla has achieved considerable success in its deep gas drilling projects. The assets will complement and extend Costilla's core operating properties in Southeast Texas as well as the Permian Basin, and include proven reserves, with approximately 3,000 producing wells, significant leasehold acreage and seismic data, and various gathering and distribution facilities. The transaction is scheduled to close in mid-December 1998, with an effective date of October 1, 1998. "In addition to providing us with significant new exploration opportunities, this acquisition will effectively triple the size of Costilla Energy," said Mike Grella, president & CEO of Costilla Energy. "We believe these properties hold significant upside potential for a domestic entrepreneurial company such as ours. Costilla is first and foremost an exploration company, and our success stems from our ability to recognize latent value and to create cash flow from our own development opportunities. Having spent six months of exhaustive due diligence on these properties, our exploration staff has identified numerous 3-D drilling projects that have potential for high impact reserve and production additions. We see this acquisition as a step to the next threshold of growth for Costilla Energy." 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. 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
or Guy McCrary, both of Costilla Energy,
915-683-3092
