Belco Oil & Gas Corp. Completes CODA Energy, Inc. Acquisition.

NEW YORK--(BUSINESS WIRE)--Dec. 1, 1997--Belco Oil & Gas Corp. (NYSE:BOG) announced today that it has completed the purchase of the outstanding stock of Coda Energy, Inc. from an affiliate of Enron Capital & Trade Resources Corp. holding 95% of the common stock of Coda, and certain members of Coda's senior management.

As previously announced, Belco paid the selling shareholders $149 million in cash and assumed approximately $175 million of Coda debt. Belco also issued three year Warrants to purchase 1,666,667 shares of Belco common stock at an exercise price of $27.50 per share. Belco has stated that it expects the transaction to be significantly cash flow accretive to shareholders in the first year.

Commenting on the acquisition, Robert A. Belfer, Chairman and CEO of Belco stated, "The acquisition of Coda Energy was a departure from our historic strategy of growth through the drillbit; however, we felt that this transaction represented compelling value. Coda's proven reserves of 55.5 MMBOE as provided by Belco's independent reservoir engineering firm translated to a per barrel of oil equivalent cash cost to Belco of $5.84 (exclusive of the value of the warrants). This gives no value to Coda's probable and possible reserves, an assumption we believe will prove conservative. Moreover, the combined companies are extremely well balanced for growth as Coda's Permian Basin and Mid-Continent core areas have been added to Belco's existing core areas in Wyoming and the Austin Chalk trend."

Laurence D. Belfer, President and COO stated, "The transaction will increase Belco's reserve life from just over five years to eight years. Proven reserves will more than double to over 600 Bcfe, balanced almost equally between oil and gas (based on Belco's 1996 year-end reserve report and Coda's May 1, 1997 report). Further, approximately 78% of the proven reserves will be in the longer-lived Permian Basin, Mid-Continent and Rocky Mountain regions. Belco's total current production will increase by approximately 40% or over 10,000 BOE per day."

Robert A. Belfer continued, "There are several important qualitative factors that go beyond these impressive numbers. Coda shares Belco's core area and low-cost philosophy in addition to having high working interests and high operatorship of its wells. The two companies both make extensive use of technology, although the emphasis is somewhat different. For example, Coda has particular expertise in secondary waterflood recovery, while Belco is particularly skilled in horizontal drilling and deep zone exploration."

Laurence D. Belfer added, "Belco has identified numerous exploitation and exploration opportunities on Coda's property base including the potential for infill drilling, expansion of existing waterfloods, unitization and implementation of new secondary recovery projects as well as exploration of deeper zones on certain producing properties which we believe will add significant incremental value over time."

Robert A. Belfer concluded, "Coda's growth has largely come from acquisitions, which is a skill set that complements Belco's drillbit growth orientation. We have already begun working with Coda's outstanding group of energy professionals. All of us at Belco are very enthusiastic about the prospects for the Company and look forward to exciting growth and profit opportunities."

Belco Oil & Gas Corp. is an independent energy company engaged in the exploration, development and production of natural gas and oil.

This press release includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although BOG believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements herein include the timing and extent of changes in commodity prices for oil and gas, the need to develop and replace reserves, environmental risks, drilling and operating risks, risks related to exploration and development, uncertainties about the estimates of reserves, competition, government regulation and the ability of the Company to meet its stated business goals and to successfully integrate the business and operations of Coda Energy, Inc.

CONTACT: BELCO OIL & GAS CORP.

Myra E. Turoff, Investor Relations, 212/508-9539

www.belcooil-gas.com