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| Costilla's Acquisition From Pioneer Going Forward With Reduced Purchase Price Closing Re-scheduled for March 1999 |
MIDLAND, Texas, Dec. 17 /PRNewswire/ -- Costilla Energy, Inc. (Nasdaq: COSE) reported today that its previously announced acquisition of certain oil and gas assets from Pioneer Natural Resources USA, Inc. (NYSE: PXD; Toronto) is going forward with amendments to the original purchase and sale agreement. Under the terms of the new agreement, Costilla will obtain the assets described in the original agreement with Pioneer for $294 million and retention by Pioneer of Costilla's $25 million deposit. In addition, Costilla has conveyed to Pioneer three million shares of its common stock with an approximate market value of $13 million, and at closing may purchase an additional interest in a Pioneer gas property for $3 million. Costilla retains the assignable option to repurchase the common shares for $13 million until May 31, 1999. The closing date has been re-scheduled for March 31, 1999, with an effective date of January 1, 1999. "The new terms of our agreement with Pioneer are quite beneficial to Costilla given our goal of continuing exploration and reserve development of domestic properties with which we have enjoyed considerable success," said Mike Grella, president and CEO of Costilla. "The re-negotiated terms significantly increase the appeal of the transaction in this environment of wavering commodity prices." 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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Company News On-Call:
800-758-5804, ext. 126873
CONTACT:
Mike Grella, President & CEO, or Guy McCrary,
Manager, Investor Relations, both of Costilla Energy, Inc.,
915-683-3092
