Cypress Energy Inc. announces 1997 first quarter results.

CALGARY, Alberta--(BUSINESS WIRE)--May 29, 1997--Cypress(Alberta Stock Exchange, TSE:CYZ.A.) Cypress Energy Inc. ("Cypress") is pleased to announce its unaudited financial and operating results for the three months ended March 31, 1997. Comparative financial and operational highlights for this period are not available, as prior to July 1, 1996, Cypress had not commenced commercial production. -0-

Three Months Ended March 31
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Financial Summary
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Gross production revenue                            $2,610,230
Cash flow from operations                            1,203,433
  Per common share                                        0.14
Net income                                             382,018
  Per common share                                        0.04
Capital expenditures                                 9,137,281
Total assets                                        26,673,721
Debt                                                 8,302,128
Shareholders' equity                                15,026,631
Weighted average number of common shares             8,567,705

Operating Summary
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Production
  Crude oil and NGL's (bbls/d)                             418
  Natural gas (mcf/d)                                    7,586
  Barrels of oil equivalent (boe/d)                      1,177
Prices
  Crude oil and NGL's ($/bbl)                           $27.77
  Natural gas ($/mcf)                                    $2.29
  Barrels of oil equivalent ($/bbl)                     $24.64

Undeveloped land (net acres)                            47,910

Production volumes of 1,177 boe/d represent a 40 percent increase from an average 842 boe/d during the fourth quarter of 1996. Production volumes at the start of the second quarter of 1997 were over 1,500 boe/d. Capital expenditures during the quarter included the acquisition of Attock Energy Corporation for approximately $6.7 million.

Cash flow and net income during the first quarter were impacted by inflated operating and G & A costs, particularly during the months of January and February. Higher operating costs were due to weather conditions and high activity levels, especially at the Brant Farrow field as production volumes were increasing rapidly. G & A expense was inflated by certain one time expenses related to the acquisition of Attock Energy. As these costs will not be repeated, a positive impact will be experienced throughout the remainder of the year.

Cypress participated in three wells (gross), 1.95 (net) during the quarter, resulting in one oil well, one cased gas well and one abandoned well due to difficulties while drilling. A successful oil well was drilled, currently producing over 120 bopd of light oil, the cased gas well has tested at rates of 1 mmcf/d. Drilling activity was constrained during the first quarter due to equipment availability, a situation which has been rectified for subsequent quarters.

The acquisition of Attock Energy Corporation ("Attock") was completed in February. The addition of Attock resulted in a 39 percent increase in total proved reserves and a 36 percent increase in proved plus probable reserves, as well as a 63 percent increase in Cypress' net undeveloped land holdings.

On March 27 Cypress was approved for listing on the Toronto Stock Exchange, symbol CYZ.A. Trading commenced on April 14, 1997.

Cypress expects to maintain a high level of drilling activity for the remainder of 1997 with 10 - 12 wells to be drilled by the fourth quarter of 1997, largely on a Cypress controlled and operated land base.

CONTACT: Cypress Energy Inc.

Donald F. Archibald, 403/ 262-8225