Carbon Energy Corporation Announces Extension of Gas Gathering System and Resultant Natural Gas Production Increase.

Business Editors

DENVER--(BUSINESS WIRE)--Nov. 2, 2000

Carbon Energy Corporation (AMEX:CRB) today announced that its Canadian subsidiary, CEC Resources Ltd., has completed an expansion of its Carbon Field natural gas gathering system in central Alberta.

The 7-mile expansion gathers natural gas from four wells, all of which commenced production into CEC compression facilities during October, 2000. Incremental net natural gas production from the wells is approximately 2,300 thousand cubic feet (mcf) of gas per day, with accompanying natural gas liquids of approximately 25 barrels per day, of which approximately 60% is presently being gathered. Additional natural gas compression capacity is being added to the system to allow 100% of the incremental volumes to be gathered. The newly connected wells are expected to increase Carbon's production, revenues and cash flow during the fourth quarter of 2000.

Carbon acquired its interest in the wells through a series of acquisitions during 2000 and expects an addition to proved reserves at year end 2000 as a result of the connection of the wells to production facilities. During the fourth quarter of 2000, Carbon plans to drill several new wells in the area of the gathering system expansion.

Prior to these activities, Carbon's net daily production from its Canadian operations was approximately 4,850 mcf of natural gas and 150 barrels of oil and natural gas liquids. CEC Resources Ltd. owns working interests in 63 producing oil and natural gas wells located in Alberta and Saskatchewan, of which 30 are operated by CEC. CEC has an interest in over 28,000 net acres of oil and gas leases.

Carbon's U.S. exploration and production operations consist of working interests in approximately 240 producing oil and gas wells, of which 145 are operated by Carbon. Carbon has an interest in over 150,000 net acres of oil and gas leases located in the Piceance Basin of Colorado, the Uintah Basin of Utah, the San Juan and Permian Basins of New Mexico and the Hugoton Basin of southwest Kansas. Net daily production from Carbon's U.S. operations is approximately 10,250 mcf of gas per day and 225 bbls of oil.

This release may contain certain forward-looking statements which are based on assumptions that are subject to a wide range of uncertainties due to several factors which are discussed more fully in the company's periodic filings with the Securities and Exchange Commission (SEC). Factors that could cause actual results to differ materially include, but are not limited to: general economic conditions, the market price of oil and natural gas, the risks associated with exploration, the Company's ability to find, acquire, market and develop and produce new properties, operating hazards attendant to the oil and natural gas business, uncertainties in the estimation of proved reserves and in the projection of future rates of production and timing of development expenditures, the strength and financial resources of the Company's competitors, the Company's ability to find and retain skilled personnel, climatic conditions, labor relations, availability and cost of material and equipment, environmental risks, the results of financing efforts and regulatory developments.