Coho Energy Updates Status of Proposed Equity Issue.

DALLAS--(BUSINESS WIRE)--Nov. 11, 1998--Coho Energy Inc. (Nasdaq:COHO)(TSE:CEE) today announced that the Company has filed a definitive proxy statement with the Securities and Exchange Commission relating to the proposed issuance of $250 million of common equity to HM4 Coho L.P., a limited partnership managed by Hicks, Muse, Tate & Furst Incorporated.

A shareholders meeting to vote on the transaction has been scheduled for December 4, 1998, and proxy material is expected to be mailed on or about November 10, 1998.

In August 1998 HM4 Coho L.P. and the Company entered into an agreement providing for the common equity issuance in two stages. On November 4, 1998, the agreement with Hicks, Muse was amended and restated to provide for a single equity transaction rather than the two-stage transaction as proposed in the original agreement. This change was made in response to a Nasdaq Stock Exchange objection to the two stage structure without first obtaining shareholder approval. In all other aspects, the terms of the transaction, which were summarized in the Company's August 24, 1998, press release, are essentially unchanged. As part of the transaction, HM4 Coho L.P. will acquire 41,666,666 common shares at $6.00 per share and own approximately 62% of Coho's outstanding shares.

Jeffrey Clarke, Coho's Chairman and Chief Executive Officer, stated, "The Hicks, Muse equity investment should allow Coho to substantially strengthen its balance sheet and continue its track record of increasing reserves, production and shareholder value, despite the current difficult environment for the oil and gas industry. Moreover, the transaction should position Coho to capitalize on these weak industry conditions, by giving it the financial flexibility to acquire producing properties at very attractive and, in some cases, distressed prices. We believe that the industry is entering a unique 'window of opportunity' to make sizable acquisitions of quality producing properties that the Company would expect to generate strong rates of return to well financed buyers like Coho. In addition, the Company believes many of these properties will have exploitation and exploration potential that could be acquired at little or no additional cost."

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