Arch Petroleum Inc. reports status of New Mexico drilling programs.

FORT WORTH, Texas--(BUSINESS WIRE)--April 30, 1996--Arch Petroleum Inc. (NASDAQ - ARCH) reported that as part of its drilling and development programs in Lea County, New Mexico, it has completed the previously announced first phase of its Teague Blinebry infill drilling program with seven drilled and completed wells and in May will begin phase two consisting of 12 wells.

Average production from the project continues to be better than expected. As a result of the phase one drilling, 1 million barrels of oil and 5 billion cubic feet of natural gas were added to the company's proved reserve estimate at year end 1995.

A third phase of the program is dependent on the success of the second, but the company ultimately expects the three phases of the program to add proved reserves of about 1.9 million barrels of oil and 8 billion cubic feet of natural gas.

In addition, the Plains-Knight No. 4 was drilled and completed during January in the Abo Dolomite at 6,300 feet. The well was drilled for development of more shallow primary objectives, but positive indicators led to drilling to this depth. The primary objectives are favorable as well and will be completed at a later date.

Initial well tests indicated that the Abo was capable of flowing over 200 barrels of oil and 500 thousand cubic feet of natural gas per day. Through March, the well has flowed 6,400 barrels of oil and 13.5 million cubic feet of natural gas.

As a result of this discovery, the company has deepened an adjacent well for a second successful Abo completion. Company engineering has determined that several additional Abo locations exist on Arch-controlled acreage.

Ralph Manoushagian, a spokesman for Arch, stated, "The Lea County acquisition from Chevron in 1994 continues to be a good example of Arch's expertise in acquiring and exploiting reserves. When this group of properties, including Teague and Plains-Knight, were purchased, net production was about 470 barrels of oil per day and 2.7 million cubic feet of natural gas per day.

At the end of 1995, Arch produced from these properties about 900 net barrels of oil per day and 4.8 million net cubic feet of natural gas per day while adding about $10 million in reserve value. We control multiple opportunities for drilling and development and look forward to continuing work in the area."

Arch Petroleum Inc. is an independent oil and gas exploration and production company headquartered in Fort Worth, Texas. It owns interests in domestic producing properties located in Texas and New Mexico and in Canadian producing properties in Alberta through its wholly owned subsidiary, Trax Petroleums Limited.

Arch also holds interests in gas gathering and transmission through its subsidiaries, Saginaw Pipeline Company, L.C. and Onyx Pipeline Company, L.C.

CONTACT: Arch Petroleum Inc., Fort Worth

Ralph Manoushagian, 817/332-9209 or 800/772-8558