Coho Energy First Quarter Earnings Doubled, Cash Flow Up 40%.

DALLAS--(BUSINESS WIRE)--May 15, 1997--Coho Energy, Inc. (NASDAQ: COHO; TSE: CEE) today reported first quarter 1997 net income of $2.1 million or $0.10 per share, more than double the $1.04 million or $0.05 per share in the first quarter of 1996.

Revenues rose 26% to $15.5 million from $12.4 million a year ago. Cash flow from operations (before working capital adjustments) in the first quarter of 1997 rose to 40% to $8.15 million ($0.39 per share) from $5.8 ($0.29 per share) last year.

The improvement in Coho's first quarter results was due to continued increases in crude oil and natural gas production and higher prices for both crude oil and natural gas. Total net daily production during the first quarter averaged 9,974 barrels of oil equivalent (BOE), a 4% increase over the 9,590 BOE in the same period of 1996. Production would have been higher but for a series of short term operating difficulties that impaired crude oil output, which included seasonal weather related power outages. These problems have been rectified and oil production levels have risen since March. Realizations during the first quarter (after the effects of hedging transactions) averaged $18.35 per barrel and $2.53 per thousand cubic feet (Mcf) compared to $15.16 per barrel and $1.99 per Mcf in the first quarter of 1996.

In Mississippi, production rose 5% to 7,004 BOE per day in the first quarter of 1997 from 6,682 BOE per day a year ago. Production during the quarter included 152 mmcf of natural gas or 282 BOE per day, compared to 40 mmcf (73 BOE per day) a year ago, reflecting successful gas well completions in the Martinville field. Louisiana production averaged 17.8 mmcf per day compared to 17.5 mmcf per day last year.

Capital expenditures in the first quarter of 1997 were $11.7 million compared to $7.2 million in last year's first quarter. This 62% increase reflected Coho's aggressive exploitation and secondary recovery program in its core Mississippi salt basin properties. During the quarter, Coho drilled a successful Laurel well to the Christmas formation that is currently producing 200 barrels per day and a Tuscaloosa well in the Brookhaven field that is producing 160 barrels per day. Three natural gas wells were completed in the Company's Monroe field in northern Louisiana.

Subsequent to March 31, 1997, Coho has drilled and tested a significant Brookhaven exploration well that is productive in the Paluxy and Washita Fredricksburg formations. The existing Brookhaven field, which is productive in the Tuscaloosa formation, covers 35 square miles. A good deal of delineation drilling will be needed to establish the size of this new accumulation. In the Martinville field, the Company completed a Mooringsport formation well that is producing 550 barrels per day. In addition, Coho is currently testing a Cotton Valley development well in the Soso field and a second Christmas formation well in the Laurel field. Coho plans an active program in Mississippi in 1997, including an aggressive exploration commitment.

Coho Energy, Inc. is a Dallas based independent oil and gas producer focusing on exploitation of underdeveloped oil properties and exploration in the Mississippi Salt Basin. -0-

                          COHO ENERGY INC.
                   SUMMARY OF FINANCIAL RESULTS
               (In Thousands, Except Per Share Data)


                                   Three Months Ended
                                        March 31,
                                    1997        1996

Oil production (BBL/D)             6,724       6,609
Gas production (MCF/D)            19,499      17,884
Production (BOE/D)                 9,974       9,590

Average sales price
  $/BBL                            18.35       15.16
  $/MCF                             2.53        1.99

Operating revenues
  Net oil and gas
    production                   $15,536     $12,367

Operating expenses
  Oil and gas production           3,080       2,830
  Taxes on oil and gas
    production                       540         597
  General and
    administrative                 1,776       1,459
  Depletion and
    depreciation                   4,536       3,905

Total operating expenses           9,932       8,791

Interest expense                   2,098       1,835

Income taxes                       1,402         706

Net earnings (loss)
 applicable to common stock       $2,104      $1,035

Earnings (loss) per
  common share                    $ 0.10       $0.05

Cash flow from
  operating activities
   (before working
    capital adjustments)          $8,155      $5,834

Cash flow per common
  share                            $0.39       $0.29

Weighted average
  number of common
  share equivalents               20,917      20,231


                          COHO ENERGY, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEET
                          (In Thousands)

                                March 31,    Dec. 31,
                                  1997        1996

ASSETS

 Current Assets                 $13,192      $17,618

 Property and Equipment         217,397      210,212

 Other                            2,121        2,211

                               $232,710     $230,041

LIABILITIES AND SHAREHOLDERS'
 EQUITY

Current Liabilities             $10,438      $10,956

Long Term Debt                  122,314      122,777

Deferred Income Taxes            16,220       14,842

                                148,972      148,575

Shareholders' Equity             83,738       81,466

                               $232,710     $230,041

Common Shares Outstanding        20,375       20,347

CONTACT: Coho Energy Inc., Dallas

Jeffrey Clarke/Anne Marie O'Gorman

972/774-8300