Benz Announces Substantial Increases in Revenues and Production for First Half of 1999.

HOUSTON--(BUSINESS WIRE)--Oct. 7, 1999--

Benz Energy Inc. (VSE:BZG) today announces that oil and gas revenues increased 61% to $3.3 million while general and administrative expenses decreased 47% to $1.7 million for the six months ended June 30, 1999 compared to the six months ended June 30, 1998. In addition, net oil and gas production for the first six months of 1999 increased 92% to 9.9 million cubic feet of gas equivalent per day ("MMCFED") compared to the six months ended June 30, 1998. The increases are due primarily to bringing new wells on production in Mississippi and do not include results from the Company's recent completion of the Fortenberry well or increased production from the Howell well at Oakvale Dome resulting from expanded pipeline capacity.

The higher revenues were driven by a 51% increase in natural gas sales and a 141% increase in crude oil and condensate sales, compared to the same period in 1998. The revenue increase was generated despite realized natural gas prices for the six month period falling by 18% to $1.82 per MCF compared to the same period in 1998. Natural gas production contributed 84% of the total production revenues in the first half of 1999. The 47% decrease in general and administrative expenses over the same period in 1998 was primarily due to reduced staff and salary cuts. Overall, the Company posted a net loss of $4.6 million ($0.13 per share) in the first half of 1999, compared to a net loss of $5.4 million ($0.17 per share) in the comparable period in 1998. The Company's improvement was due in part to a 16% decrease in net interest expense, which dropped to $1.9 million from $2.3 million in the comparable period in 1998.

Currently, net daily production rate for the Company has increased to approximately 12 MMCFED due to the completion of the Fortenberry No. 1 well in Mississippi, expanded pipeline capacity from 16 million cubic feet of gas per day (MMCFD) to over 50 MMCFD in the Oakvale Dome Field, and the initial results from workovers in the Oak Hill Field in Texas. In the Fortenberry well, the Company has elected to temporarily bypass the deeper productive Booth sands and produce from the higher quality Harper Formation. This election was made after determining that the Hosston reservoirs developed in the Fortenberry well were substantially damaged near the re-drilled wellbore as a result of the mechanical problems encountered in the original wellbore. Initial production tests resulted in a flow rate of approximately 2.0 MMCFED, and the Company plans to conduct a limited stimulation of the Harper to increase deliverability.

The Company has also entered into a forward price swap that fixes future prices at a price in excess of $2.47 for the equivalent of 6 billion cubic feet of gas of future gas production from September 1999 through August 2002.

Prentis B. Tomlinson, Jr., president of Benz Energy Inc., commented, "We continue to be pleased by the improvement in the Company's operating results while significantly reducing G&A expense, and we look forward to continued improvements."

Benz Energy Inc. is an exploration and development company based in Houston, focused on natural gas in the U.S. Gulf Coast of Texas, Mississippi and Louisiana.

                           BENZ ENERGY INC.
                 Consolidated Statement of Operations
                             U.S. Dollars
                        (U.S. GAAP, Unaudited)

                                     Six Months Ended
                                         June 30,
                                    ------------------
                                   1999           1998
                                  ------         ------

Petroleum Revenue               $3,278,328     $2,040,405

Direct Expenses:
  Lease operating expenses         482,572        346,588
  Depreciation, depletion
   and amortization              2,152,698      1,090,456
                               -----------    -----------
                                 2,635,270      1,437,044
                               -----------    -----------
                                   643,058        603,361
                               -----------    -----------
Other Expenses (Income):
  General and administrative
   expenses                      1,664,268      3,164,250
  Interest expense               1,901,182      2,274,572
  Debt issuance costs            1,014,201        485,095
  Loss on sale or disposal
   of assets                       330,402         17,039
  Interest and other income       (163,294)      (319,361)
                               -----------    -----------
                                 4,746,759      5,621,595
                               -----------    -----------

Net loss                        (4,103,701)    (5,018,234)
Preferred dividends               (469,136)      (385,845)
                               -----------    -----------

Net loss applicable to
 common stockholders           $(4,572,837)   $(5,404,079)
                               ===========    ===========

Basic Loss Per Share                $(0.13)        $(0.17)
                               ===========    ===========
Diluted Loss Per Share              $(0.13)        $(0.17)
                               ===========    ===========

Operating Statistics
--------------------
Gas Production, MCFGD                8,569          4,535
Oil Production, BOD                    226            104
  Equivalent (6:1) MCFED             9,925          5,159

Average Gas Price  US$               $1.82          $2.23
Average Oil Price  US$              $12.56         $11.37


Selected Balance Sheet Items          As of           As of
                                  June 30, 1999   Dec. 31, 1998
-----------------------------------------------------------------
(U.S. $ in millions)                (Unaudited, U.S. GAAP)

Cash & Equivalents                    $.03          $2.32
Current Assets, excluding
 cash & equivalents                   5.87           9.01
Net PP&E                             90.49          79.41
Total Assets                        102.37          95.24

Current Liabilities                  47.11          36.50
Long-term Debt                       42.93          42.26
Shareholders' Equity                  2.83           6.99

Cautionary Statement as to Forward-Looking Information

Investors are cautioned that the preceding statements of the Company include certain estimates, assumptions and other forward-looking information ("forward-looking statements (information)"). The actual future performance, developments and/or results of the Company may differ materially from any or all of the forward-looking statements (information), which include current expectations, estimates and projections, in all or part attributable to general economic conditions and other risks, uncertainties and circumstances partly or totally outside the control of the Company, including rates of inflation, natural gas prices, reserve estimates, drilling risks, future production of oil and gas, changes in future costs and expenses related to oil and gas activities and hedging, financing availability and other risks related to financial activities.

The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.