Castle Energy Corp. announces first quarter earnings.

RADNOR, Pa.--(BUSINESS WIRE)--Feb. 23, 1995--Castle Energy Corp.(a) (NASDAQ/NNM:CECX) reported earnings of $14,084,000 ($1.97 per share) for the quarter ended Dec. 31, 1994.

This compared to earnings of $8,383,000 (87 cents per share) for the corresponding quarter ended Dec. 31, 1993.

Joseph L. Castle II, chairman and chief executive officer, noted that pre-tax income included $30,471,000 of recurring operating income, a $391,139,000 gain on the company's Oct. 14, 1994 settlement with Metallgesellschaft Corp. and its subsidiaries and a $345,008,000 provision for possible losses on the disposition of the company's two refineries.

In December of 1994, the company contracted with Core Refining Corp. ("CORE") to sell both of its refineries to CORE. CORE had been formed by William Sudhaus, the president and chief operating officer of the company.

CORE was unable to raise the equity and debt financing required to close the transaction and the company is terminating its agreement with CORE. CORE is now refocusing its efforts to repurchase only the company's Indian Refinery.

As a consequence, the company has determined the Powerine Refinery will be shut down over the next 60-day period, although the company continues to pursue the sale of the Powerine Refinery with various outside parties as well as the management of the Powerine Refinery.

If the company were to sell the Powerine Refinery, or contract to do so, over the next 60-day period, the company might reassess its decision to shut down that refinery.

The company is also in the process of negotiating a restructured sale of the Indian Refinery with CORE, and, accordingly, has not determined to shut down that refinery at this time. However, the situation is being monitored by the company on a continuous basis and, if the restructured transaction with CORE appears unlikely, the company may determine to shut down the Indian Refinery.

Although the company may be able to sell one or both of its refineries, it has recorded the $345,008,000 loss provision on the assumption both refineries are closed rather than sold, because it has no agreement to sell either refinery.

If the company were to close both refineries and the $345,008,000 provision for losses were the actual result, the company would owe virtually no income taxes and would have a net operating loss carryforward of approximately $50,000,000.

A successful sale of one or both refineries would result in a recovery of a portion of the loss provision and a decrease in the company's net operating loss carryforward.

After the disposition of the refineries Castle will be involved exclusively in natural gas marketing and exploration and production. Castle Energy, through various subsidiaries and affiliates, also owns a gas sales contract with Lone Star Gas Co., a 77-mile intrastate pipeline in Rusk County, Texas and related gas contracts and interests, and operate approximately 450 oil and gas wells nationwide. -0- (a) Castle Energy Corp. is not affiliated with Castle Oil Corp. -0-

                      CASTLE ENERGY CORP.

                                         Three Months Ended
                                            December 31,
                                   -----------------------------
                                        1994           1993
                                        ----           ----
Revenues                            $313,080,000    $222,036,000
Pre-tax accounting income           $ 73,747,000    $ 13,929,000
Net income                          $ 14,084,000    $  8,383,000
Per share:
    Net income                         $1.97            $.82
    Average shares outstanding         7,157,160      10,289,156

CONTACT: Castle Energy Corp., Radnor

Joseph L. Castle II, 610/995-9400