Carbon Energy Corporation Announces Increase in Net Proved Oil and Natural Gas Reserves in United States and Canada.

Business Editors

DENVER--(BUSINESS WIRE)--March 13, 2002

Carbon Energy Corporation (AMEX:CRB) announced that its net proved oil and natural gas reserves after royalties were estimated by independent petroleum engineering firms to be 59 billion cubic feet of natural gas equivalent ("Bcfe" where one barrel of oil is equivalent to six thousand cubic feet of gas).

This is an 8 Bcfe or 16% increase from the net proved reserves of 51 Bcfe reported at year end 2000 (all year-end 2000 net proved reserves are adjusted for a property sale in January 2001). Patrick R. McDonald, Carbon Energy's Chief Executive Officer, said: "Carbon's natural gas and oil reserves increased during 2001 as a result of exploration drilling success in the United States and Canada. As a result of the 2001 program, multiple low-risk development drilling opportunities were identified and will comprise the majority of Carbon's 2002 drilling program, particularly in the Piceance and Uintah Basin of Colorado and Utah where Carbon has over 135,000 net acres of oil and gas leases."

At year end 2001, Carbon's net proved natural gas reserves were 53.9 Bcf of gas, compared to 45.4 Bcf at year end 2000, an increase of 8.5 Bcf or 19%. Crude oil and natural gas liquids ("ngl") totaled 851,000 barrels, compared to 930,000 barrels at year end 2000, a decrease of 79,000 barrels or 9%. Proved developed reserves were approximately 86% of total proved reserves on a Bcfe basis.

During 2001, Carbon produced 5.2 Bcf of gas and 140,000 barrels of oil and natural gas liquids, amounting to 6.1 Bcfe. The addition of 8.0 Bcfe to Carbon's net proved reserves resulted in a reserve replacement of 232% of the Company's 2001 production.

Canadian Proved Reserves Increase

Net proved reserves at year end 2001 of Carbon's Canadian unit, CEC Resources Ltd., totaled 19.9 Bcf of natural gas and 439,000 barrels of crude oil and ngl, a total of 22.5 Bcfe. This was an increase of .9 Bcfe or 4% compared to the year-end 2000 total of 21.6 Bcfe. The reserves were estimated by Sproule Associates Limited. Net proved natural gas reserves increased by 1 Bcf from the year-end 2000 total of 18.9 Bcf. Net proved crude oil and ngl reserves decreased by 22,000 barrels from the year-end 2000 total of 461,000 barrels. The increase in natural gas reserves is primarily attributable to successful drilling activity in the Carbon Field areas of Central Alberta. The pretax net present value of Carbon's Canadian reserves using year-end prices and costs held constant and discounted at 10% was $24.7 million. The prices used in the estimate of value at December 31, 2001, were wellhead prices of $2.30 per Mcf, $14.78 per barrel of crude oil and $12.24 per barrel of ngl.

During 2001, CEC Resources produced 2.4 Bcf of gas and 58,600 barrels of oil and natural gas liquids, amounting to 2.8 Bcfe. The addition of .9 Bcfe to CEC Resources' net proved reserves resulted in a reserve replacement of 131% of the Company's 2001 production.

U.S. Proved Reserves Increase

At year end 2001, net proved reserves of Carbon's U.S. unit, Bonneville Fuels Corporation, totaled 34 Bcf of natural gas and 412,000 barrels of crude oil and ngl, a total of 36.5 Bcfe. This was an increase of 7.2 Bcfe or 25% compared to the year-end 2000 total of 29.3 Bcfe. The reserves were estimated by Ryder Scott Company. Net proved natural gas reserves increased by 7.5 Bcf or 28% from year-end 2000 total of 26.5 Bcf. Proved crude oil and ngl reserves decreased by 57,000 barrels or 12% from the year-end 2000 total of 469,000 barrels. The increase in natural gas reserves is attributable to successful exploration drilling in Colorado and New Mexico. The pretax net present value of Carbon's U.S. reserves using year-end prices and costs held constant and discounted at 10% was $31.1 million. The prices used in the estimate of value at December 31,

2001, were based on wellhead prices of $2.25 per Mcf and $18.45 per barrel of crude oil.

During 2001, Bonneville Fuels produced 2.8 Bcf of gas and 81,100 barrels of oil and natural gas liquids, amounting to 3.3 Bcfe. The addition of 7.1 Bcfe to Bonneville Fuels' proved reserves results in a reserve replacement of 316% of the Company's 2001 production.

Exploration and Production Operations

Carbon's United States exploration and production operations are comprised of working interests in 260 producing oil and gas wells, of which 151 are operated by Carbon. Carbon has an interest in approximately 166,000 net acres of oil and gas leases located in the Piceance Basin of Colorado, the Uintah Basin of Utah, the Permian Basin of New Mexico and in Texas, Montana, Wyoming and Kansas.

CEC Resources Ltd. owns working interests in 75 producing oil and natural gas wells located in Alberta and Saskatchewan, of which 39 are operated by CEC. CEC has an interest in approximately 36,500 net acres of oil and gas leases.

Carbon is involved in the development of its extensive natural gas properties in the Rocky Mountain region of the United States and in Canada, with emphasis on the Piceance and Uintah Basins and the Carbon and Rowley areas of Central Alberta.

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect the Company's operations, financial performance and other factors as discussed in the Company's filings with the Securities and Exchange Commission. Among the factors that could cause results to differ materially are those risks discussed in the Company's Form 10-K for the year ended December 31, 2000.