Commonwealth Energy Corp. Secures Option on High Potential Gas Prospect.

CALGARY, Alberta--(BUSINESS WIRE)--Jan. 4, 1999--Commonwealth Energy Corp. ("Commonwealth" or "the company") is pleased to announce it has entered into a letter of intent to acquire a "Pinnacle Reef" oil and gas prospect in Oceana and Montague Counties, Michigan.

The area is renowned for its prolific oil and gas production from similar structures in the Michigan Basin. It is not uncommon to have cumulative production of 4,000,000 BOE (Barrels of Oil Equivalent) from these Pinnacles. Under the terms of the agreement, Commonwealth will earn a 100% working interest by reimbursing past exploration costs and by funding the first exploratory well. Commonwealth's intention is to bring partners into the project and retain a 25% working interest. Initial production test rates for wells in the area have measured as high as 10,000,000 cubic feet of gas per day and 500 BOPD (barrels of oil per day).

In further news, the Warren #1 well in Coleman County, Texas has been completed and flow tested at a rate of 190,000 cubic feet of gas per day and 20 BOPD. All facilities are in place for production to begin once the hot tap connection is made into the Mitchell Energy Pipeline System.

In reference to the news release of November 25, 1998, the reentry of the first of four gas wells in Parker County, Texas will commence this week. With the infrastructure already in place, the company anticipates immediate production revenue. Similar reentries in the region indicate that these four wells could have a cumulative daily production range of 1.3 to 2.9 MCF (million cubic feet) of gas.

For more information, please contact Bob Stewart or Doug Wolters (Investor Relations) at 800/950-2587, or Michael Du Mont at 604/688-3543.

The Alberta Stock Exchange has neither approved nor disapproved the information contained herein.