Box Energy Accepts Resignation of 18 Employees Under Existing Severance Agreements.

DALLAS--(BUSINESS WIRE)-- Oct. 27, 1997--Box Energy Corporation today announced that 18 of its 31 employees resigned under a severance agreement providing between six and eighteen months' severance pay. The resignations follow the request from the company that employees terminate existing severance agreements and enter into new agreements more in line with industry standards. The original agreements were entered into in December 1995 and allowed employees to trigger their severance if management changed any benefit program, reporting relationship or job responsibility.

Each employee cited a decision by Box Energy to close the employee dining room (which served breakfast and lunch to all employees and their guests at no cost to the employees) as a reason for his or her resignation.

James A. Watt, President and Chief Operating Officer, Box Energy said the resignations would not materially impact ongoing exploration and production operations. The company, he said, would seek to replace about half of the unfilled positions, bringing total staff to about 25.

The company will take a charge to third quarter earnings of $5.9 million for reorganization costs. These costs consist of approximately $2.7 million for severance payments to the 18 employees, $1.2 million to Tom Box to settle his severance and all claims against the company and $2.0 million to Mr. J.R. Simplot to end his litigation against the company.

On August 29, Mr. Simplot and members of his immediate family purchased a controlling interest in the Box Brothers Holding Company, which owns 57 percent of the Class A stock of Box Energy Corporation.

"As a result of these changes," Mr. Watt said, "the company can now dedicate its management attention to building shareholder value through conventional exploration, development and acquisition programs.

"Management needs to change the culture of the organization and establish benefit programs for all employees that are in sync with industry standards and provide motivation for the employees to accomplish the goals and objectives established by management and the board," Mr. Watt continued. "We can now hire new employees whose focus will be building shareholder value through investing our significant cash flow in exploration for and acquisition of oil and gas reserves. All our properties are outside operated and the programs can be continued with existing staff and consultants until a new staff is in place."

David Hawk, newly elected Chairman of the Board of Box Energy, said: "Mr. Simplot has fought for the last ten years to put employee values and those of the shareholders in balance. General and administrative costs of this company have been some of the highest in the industry and I totally support Mr. Watt's efforts to bring those costs into line."

Box Energy Corporation (NASDAQ NMS: BOXXA and BOXXB and PCX symbol: BXCA.P and BXCB.P) is an independent exploration and production company primarily engaged in the exploration for, and the development and production of, oil and natural gas.

CONTACT: James A. Watt

Box Energy Corporation

214-890-8060