Avalon Opens First Oklahoma Private Juvenile Facility.

OKLAHOMA CITY--(BUSINESS WIRE)--Feb. 8, 1999--Avalon Correctional Services, Inc. (NASDAQ: "CITY"), continues to expand its correctional services, announced today the opening of its 80-bed medium security juvenile facility in Oklahoma. The Union City Juvenile Center is the first private secure juvenile center for the state of Oklahoma.

The 44,000 square-foot facility utilizes Avalon's management team design and operating systems to provide services for 80 Youthful Delinquent Offender males ages 13 to 19. Avalon was awarded a five year contract with the Oklahoma Office of Juvenile Affairs to design, construct, own and operate the facility. The 80-bed contract will generate annual revenues of approximately $3.6 million. The implementation of this contract will increase Avalon's total revenues by 40 percent.

The contract includes educational programming, counseling and treatment programs, recreation therapy, independent living skills designed to assist youths with reintegrating into an appropriate school or work program, and a job training program.

Avalon Chief Executive Officer, Donald E. Smith, said, "The award of this contract and the opening of the Union City Juvenile Center is a very significant step in the implementation of Avalon's growth plan and expansion of our correctional services. The opening of this state-of-the-art facility will serve the current and foreseeable future needs of our contracting agency. The achievement of this contract provides Avalon with the opportunity for a first class entrance into the Juvenile industry."

The Company also announced it has begun construction on a 300 bed expansion to Avalon's 150 bed El Paso, Texas correctional facility. The expansion is scheduled for completion in the second quarter of 1999. The additional beds will accommodate a 250 bed contract.

Avalon Correctional Services, Inc. is a leading developer and manager of privatized community correctional facilities in the United States. Avalon provides a diverse range of programs and services to local, state, and federal government agencies.

Certain statements in this release constitute forward-looking statements or statements which may be deemed or construed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "forecast," "estimate," "project," "intend," "expect," "should," "would," and similar expressions and all statements which are not historical facts are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance (financial or operating) or achievements to differ from the future results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. The above factors are more fully discussed in the Company's SEC filings.