Mission Resources Announces Strong Results For the First Quarter of 2005

Business Wire, May 10, 2005

HOUSTON -- Provides Drilling Update, Guidance for the Second Quarter 2005 and Increases Full-Year 2005 Guidance

Mission Resources Corporation (Nasdaq:MSSN) today reported financial and operational results for the first quarter of 2005.

--First quarter 2005 discretionary cash flow increased 43% over first quarter 2004 to $16.3 million and increased 6% over the fourth quarter 2004 amount.

--First quarter net income improved 600% to $2.8 million or $0.06 per share - diluted compared with $0.4 million or $0.01 per share - diluted in the first quarter of 2004.

--First quarter 2005 average daily production was 62.8 million cubic feet of gas equivalent ("Mmcfe"). Current daily production is approximately 77 Mmcfe.

--To date in 2005, Mission has participated in 18 successful exploratory and development projects. There are 23 projects currently in-progress.

"We are very pleased with this quarter's results and with the success of our aggressive 2005 exploration program," said Robert L. Cavnar, Chairman, President and Chief Executive Officer. "We met or exceeded our first quarter goals for production, expenses and discretionary cash flow. Our daily production is ramping up with the successful projects discussed below as we stay focused on operational performance."

Capital Expenditures: During the first quarter of 2005, Mission spent $20.8 million for development activity, $6.4 million for exploration activity and $5.0 million for seismic data, land and corporate assets. Listed below is an update for our most recent activities.

At our Lions Wilcox Field, Goliad County, Texas, several wells are currently drilling or being completed. Current operations are as follows:

--The Dehnert #1 has been turned to sales and is currently producing at a gross daily rate of approximately 12.0 Mmcfe. Mission holds a 25.9% net revenue interest and will become the operator in the second quarter of 2005.

--The Buckner Foundation #1 has reached a total depth of 15,700 feet and production casing has been set. Installation of production facilities is nearing completion and the pipeline installation will commence immediately. Completion operations are scheduled to begin mid-May. The Buckner Foundation #1 encountered 5 gas-bearing sands with a gross interval of 458 feet in the Lower Wilcox interval below 13,700 feet. Mission is the operator of this well and holds a 26.3% net revenue interest.

--The Weise #2 has tested the lower intervals of the Corona (Wilcox) Sands at rates of approximately 2.0 Mmcfe per day. Testing of additional pay intervals in this well is in progress. We anticipate that this well will produce at rates similar to the Weise #1, which flowed at an initial gross daily rate of approximately 14.5 million cubic feet of gas. The well has been connected to the pipeline and the production equipment installation is complete. Mission is the operator of this well and holds a 23.4% net revenue interest.

--The Simmons #1 is currently drilling below 12,800 feet with a planned total depth of 15,000 feet. Mission holds a 25.9% net revenue interest in this well and will be the operator after completion.

--The Wright Materials #3 is currently drilling at approximately 9,200 feet with a planned total depth of 16,000 feet. Mission is the operator of this well and holds a 20.6% net revenue interest.

Other areas with recent activity are as follows:

--At our North Leroy field in Vermilion Parish, Louisiana, the Ledoux #1 was completed and turned to sales from the Marg howei sand at an initial gross rate of approximately 4.7 Mmcfe per day. Mission holds a 52.0% net revenue interest.

--At the Argo Prospect in Jefferson County, Texas, Mission has spud the Iles #2 well. This well targets the Yegua EY sands encountered in the Iles #1 well. We are continuing to evaluate completion alternatives in the Iles #1 well and are awaiting regulatory permits. We are currently drilling below 6,500 feet on the Iles #2 with a planned total depth of 11,500 feet. Mission is the operator of these wells and holds a 48.8% net revenue interest.

--At our Andromeda Prospect located in DeWitt County, Texas, Mission has spud the Mussleman #1 and is currently drilling below 9,600 feet with a planned total depth of 14,500 feet. Mission is the operator of this well and holds a 53% net revenue interest.

--We recently spud the Smith #1 in the Ricardo Prospect in Kleberg County, Texas. The well is drilling below 9,000 feet and has a proposed total depth of 16,500 feet. Mission holds a 25% net revenue interest in this well.

--At the Reddell Field in Evangeline Parish, Louisiana, Mission is continuing its successful development program. The Coreil #2 began producing to sales in early April and is currently producing approximately 2.0 Mmcfe per day from the upper Wilcox. The Pardee O #1 was turned to sales at a gross rate of approximately 4.7 Mmcfe per day also from the upper Wilcox. The Pardee Q #1 is currently drilling below 7,100 feet with a proposed total depth of 11,520 feet to the upper Wilcox. Mission holds a 10.2% net revenue interest in all three of these wells. The Pardee N #1 was drilled to total depth of 13,700 feet and logged an estimated 150 feet of pay in the middle and lower Wilcox. The Pardee N #1 will be completed after the Pardee Q #1 drilling operation is completed. Both wells are drilled from the same surface location. Mission holds a 10.9% net revenue interest in the Pardee N #1. Additional work is planned in this program for later in the year.