Coho Energy Announces Financial Results for First Quarter 2002.

Business Editors

DALLAS--(BUSINESS WIRE)--May 15, 2002

Coho Energy, Inc. (OTCBB:CHOH) announced today its financial and operating results for the quarter ended March 31, 2002.

On February 6, 2002, Coho and its wholly owned subsidiaries, Coho Resources, Inc. and Coho Oil & Gas, Inc., filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas. The bankruptcy petitions were filed to protect Coho while it develops a solution to its liquidity problems. In November 2001, Coho had received a notice of borrowing base deficiency from its bank lenders because the banks reduced Coho's borrowing base by $20 million in their semi-annual review. Coho was unable to cure the borrowing base deficiency within the 90-day cure period and received a notice of default from the lenders on February 1, 2002. Coho is currently operating as debtor-in-possession under the court's supervision and pursuant to its orders.

The Company, the bank group and the unsecured creditors committee, together with CIBC World Markets Corp., as the financial advisor for all three, have developed a marketing plan, which is subject to bankruptcy court approval, in the attempt to achieve maximum value for the Company's assets in this process. The marketing plan allows the Company to explore other alternatives available to it, in addition to a sale of its assets, including a recapitalization of its debt and equity assuming the Company is able to raise sufficient equity from existing or new investors to cure the $20 million borrowing base deficiency and to provide working capital to develop its properties. A recapitalization may include a partial sale of its assets. Any sale or recapitalization will be subject to bankruptcy court approval under a Chapter 11 plan of reorganization or liquidation or in accordance with Section 363 of the bankruptcy code, which generally provides for a partial sale of assets prior to confirmation of a plan of reorganization or liquidation.

Pursuant to the marketing plan, a tentative timetable has been

established to solicit bids for the sale of the Company or its assets. Critical dates are as follows:

-- May 16, 2002 -- Indication of interest deadline;

-- April 29, 2002-June 14, 2002 -- Data room visits;

-- June 20, 2002 -- Final offers due;

-- June 27, 2002 -- Court hearing and auction; and

-- August 16, 2002 -- Final closing.

These dates are only estimates and can be amended or terminated. The bankruptcy court and the unsecured creditors committee have expressed their willingness to consider alternatives and any and all bids may be rejected if the Company decides to pursue such alternative transactions.

All adjustments to the carrying value of the Company's assets or liabilities related to the bankruptcy filing have not been reflected in the March 31, 2002 balance sheet. During 2002, the Company will adjust liabilities subject to compromise to its estimate of the allowed claims. During the first quarter of 2002, the Company recorded an estimated prepayment penalty, also referred to as the default penalty, of $29.3 million that was accelerated on its senior subordinated debt, or standby loan, due to the bankruptcy filing and adjusted the recorded amount of the standby loan embedded derivative resulting in a $10.2 million gain. In addition, unamortized debt issuance costs of $22.6 million and debt discounts of $10.7 million were written off. The adjustments to the March 31, 2002 carrying values related to the prepayment penalty, standby loan embedded derivative, unamortized debt issuance costs and debt discounts were recorded in earnings as reorganization costs.

At this time, it is not possible to predict the outcome of the bankruptcy proceedings, in general, or the effect on the Company's business or on the interests of the creditors or shareholders. The Company believes, however, that it may not be possible to satisfy in full all of the claims against it and the shareholders of our company may not realize any value on their investment. If all of the Company's oil and gas properties are sold, the Company will be liquidated. As a result of the bankruptcy filing, all liabilities incurred prior to February 6, 2002, including secured debt, are subject to compromise. Under the bankruptcy code, payment of these liabilities may not be made except pursuant to a plan of reorganization or liquidation or bankruptcy court approval.

Cash flow provided by operating activities (before working capital adjustments) was $2.1 million for the current three month period as compared to cash flow provided by operating activities of $7.6 million for the same three month period in 2001. Operating revenues net of operating expenses, production taxes and general and administrative expenses were $6.3 million for the current three month period compared to $12.0 million for the same period in 2001.

For the three months ended March 31, 2002, the Company reported a net loss of $59.6 million, or $3.19 per share, as compared with net income of $6.3 million, or $0.34 per share, in the same period in 2001. The loss for the first quarter of 2002 includes reorganization costs of $53.3 million while the first quarter of 2001 includes a reduction in the previously recognized reorganization costs of $1.2 million. Reorganization costs during the first quarter of 2002 include adjustments aggregating $52.4 million related to the acceleration of the standby loan default penalty and adjustments to the March 31, 2002 carrying values related to the standby loan embedded derivative, unamortized debt issuance costs and debt discounts as discussed above. The Company recognized a loss of $2.9 million related to its crude oil hedge arrangements during the first quarter of 2002. A loss of $2.3 million on the standby loan embedded derivative and a gain of $9.2 million related to the accumulated effect of the accounting change was recognized by the Company in the first quarter of 2001.

Coho Energy, Inc. is a Dallas based oil and gas producer focusing on exploitation of underdeveloped oil properties in Oklahoma and Mississippi.

For further information contact: Gary Pittman at [phone]

                           COHO ENERGY, INC.
                              SUMMARY OF
                           FINANCIAL RESULTS
  (In thousands, Except per Share, Production and Average Price Data)

                                               Three Months Ended
                                                   March 31,
                                           -------------------------
                                              2002              2001
                                              ----              ----
OIL PRODUCTION (Bbl/day)                      9,183             9,912
GAS PRODUCTION (Mcf/day)                      4,141             4,413
PRODUCTION (BOE/day)                          9,874            10,647

Average Sales Price
    Crude Oil per Bbl (a)                  $  16.91          $  20.81
    Natural Gas per Mcf (a)                $   2.40          $   5.16

OPERATING REVENUES
    Oil and Gas Production                 $ 14,868          $ 20,611
                                           --------          --------
OPERATING EXPENSES
Oil and Gas Production                        6,347             5,890
Taxes on Oil and Gas Production                 889             1,444
General and Administrative                    1,360             1,323
Loss on Derivatives                           2,938               280
Depletion and Depreciation                    4,513             4,115
                                           --------          --------

TOTAL OPERATING EXPENSES                     16,047            13,052

NET INTEREST EXPENSE                         (5,212)           (9,306)

LOSS ON STANDBY LOAN EMBEDDED                   ---            (2,340)
   DERIVATIVE

REORGANIZATION COSTS                        (53,256)            1,200

INCOME TAX (EXPENSE) BENEFIT                   ---               ---

ACCUMULATED EFFECT OF AN
   ACCOUNTING CHANGE                           ---              9,180
                                           --------          --------

              ---
NET (LOSS) INCOME                          $(59,647)         $  6,293
                                           ========          ========

BASIC AND DILUTED (LOSS) INCOME PER
 COMMON SHARE                              $  (3.19)         $   0.34

CASH FLOW FROM OPERATING ACTIVITIES
   (before working capital adjustments)    $  2,104          $  7,622

CASH FLOW PER COMMON SHARES -
   BASIC                                   $   0.11          $   0.41

WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES - BASIC                     18,714            18,714

(a) The average sales price per Bbl of crude oil is net of hedging
    losses of $2.69 per Bbl for the three months ended March 31, 2001.
    The average sale price per Mcf of natural gas is net of hedging
    losses of $2.31 per Mcf for the three months ended March 31, 2001.
    There were no hedging gains or losses included in operating
    revenues during the three months ended March 31, 2002.


                           COHO ENERGY, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In thousands)

                                       March 31,          December 31,
                                         2002                2001
                                     -------------       -------------
ASSETS

Current Assets                       $   20,005          $   20,919

Property and Equipment                  330,846             332,952

Other                                       112              23,272
                                     -----------         -----------
                                     $  350,963          $  377,143
                                     ===========         ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities not subject to compromise

     Current Liabilities             $    6,679          $  304,994

Liabilities subject to compromise       334,395                ---

Long Term Debt                             ---                2,710

Long Term Accrued Derivative
 Liabilities                                397                 257
                                     ----------          ----------

                                        341,471             307,961
                                     ----------          ----------

Commitments and Contingencies               450                 450

Shareholders' Equity                      9,042              68,732
                                     ----------          ----------
                                      $ 350,963           $ 377,143
                                     ==========          ==========
Common Shares Outstanding - Basic        18,714              18,714