Cornerstone Natural Gas, Inc. announces 1995 financial results.

DALLAS--(BUSINESS WIRE)--Feb. 15, 1996--Cornerstone Natural Gas, Inc. (AMEX:CGA) today reported its highest earnings since 1987.

The company recorded net earnings of $1.1 million ($.08 per share) for the year ended Dec. 31, 1995. These results compare to net earnings of $315,000 ($.02 per share) for the previous year and represent a 248 percent increase. Earnings before interest, income taxes and depreciation ("EBITD") were $6.7 million in 1995 compared to $4.2 million in 1994. The increase in net earnings and EBITD are primarily attributable to an increase in performance from the company's natural gas processing assets.

Management stated that the company had accomplished its 1995 goal of bringing significant additional supplies of natural gas to its systems. Total company average natural gas inlet volumes increased to 89 million cubic feet per day ("MMCFD") in 1995 from 67 MMCFD in 1994. The company added natural gas compression and expanded its Calhoun plant increasing the company's North Louisiana natural gas processing capacity from 110 MMCFD to 135 MMCFD. The North Louisiana facilities processed 95 MMCFD of natural gas in December 1995 and are currently processing over 100 MMCFD. These volumes represent an 82 percent increase over 1994. Management expects further increases in natural gas processing volumes in North Louisiana during 1996.

One of the company's other goals for 1995 was to place idle assets back into service. This goal was achieved in August 1995 when the company completed the refurbishment of its Iola plant. The Iola plant processed 15 MMCFD of natural gas in December 1995. The plant had previously been idle since 1988. A significant portion of the natural gas in northern Grimes County, Texas is dedicated to this facility. Several major producers have active drilling programs in the area and processed natural gas volumes are expected to increase throughout 1996.

The company is continuing its stated strategy to expand its operations in North Louisiana and Texas. Management expects further growth during 1996 through new projects and acquisitions.

The company is engaged in the business of natural gas gathering, marketing, and processing. Natural gas gathering and marketing includes purchasing, gathering, transporting and marketing of natural gas. Natural gas processing includes recovering and marketing of natural gas liquids from natural gas and treating natural gas by removing noncommercial components. -0-

              CORNERSTONE NATURAL GAS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                               (UNAUDITED)

                        Three Month Period        Twelve Month Period
                        Ended December 31,         Ended December 31,
                    -------------------------   -------------------------
                        1995          1994          1995          1994
                   ------------  ------------  ------------  ------------
Revenues         $42,383,000   $26,327,000  $131,909,000  $106,406,000
Expenses:
  Cost of sales   36,591,000    22,528,000   113,568,000    90,997,000
  Operating
    expenses       1,812,000     1,132,000     6,180,000     5,975,000
  Depreciation
    and
    amortization     921,000       704,000     3,380,000     2,733,000
  General and
    administrative 1,453,000     1,395,000     5,446,000     5,250,000
                 -----------   -----------   -----------   -----------
                  40,777,000    25,759,000   128,574,000   104,955,000
                 -----------   -----------   -----------   -----------
Operating
  earnings         1,606,000       568,000     3,335,000     1,451,000
                 -----------   -----------   -----------   -----------
Other income
  (expense):
  Interest
    income             4,000        25,000        85,000        79,000
  Interest
    expense         (687,000)     (317,000)   (2,311,000)   (1,284,000)
  Equity in net
    earnings (losses)
    of unconsolidated
    subsidiaries       3,000         3,000       (29,000)      (11,000)
  Other                   --         1,000        19,000        16,000
  Gain on sale
    of assets, net        --            --            --        90,000
                 -----------   -----------   -----------   -----------
                    (680,000)     (288,000)   (2,236,000)   (1,110,000)
                 -----------   -----------   -----------   -----------
Earnings before
  income taxes       926,000       280,000     1,099,000       341,000
Provision for
  income taxes:
  Current                 --        13,000            --        26,000
  Deferred                --            --            --            --
                 -----------   -----------   -----------   -----------
Net earnings
  applicable to
  common stock   $   926,000   $   267,000   $ 1,099,000   $   315,000
                 ===========   ===========   ===========   ===========
Earnings per common
  and common
  equivalent
  share          $       .06   $       .02   $       .08   $       .02
                 ===========   ===========   ===========   ===========
Weighted average
  common and
  common
  equivalent
  shares
  outstanding     14,615,000    14,445,000    14,615,000    14,467,000
                 ===========   ===========   ===========   ===========
Working capital
  provided by
  operations     $ 1,901,000   $   976,000   $ 4,598,000   $ 2,999,000
                 ===========   ===========   ===========   ===========

CONTACT: Cornerstone Natural Gas, Inc., Dallas

Robert L. Cavnar, 214/691-5536.