ExproFuels Receives Approvals in Uzbekistan.

SAN ANTONIO, Texas--(BUSINESS WIRE)--June 7, 1996--The Exploration Company's ExproFuels division announced today President Karimov of Uzbekistan has signed the decree of the Cabinet of Ministers authorizing the American consortium, of which ExproFuels and American Engineering, Inc. of Memphis, Tennessee are equity partners, as the official entity to deal with the Uzbekistan Government in its efforts to convert the country's entire vehicle fleet to operate on natural gas.

The decree, titled, "On Proposals On Foundation of Uzbek-American Joint Ventures `Gasmotors' and `Gascompressor'," recognizes the overriding economic and environmental importance of the conversion from liquid fuels to Compressed Natural Gas ("CNG") and contains the necessary orders to the various government ministries to enable the successful implementation of this major national project.

Important points covered in the presidential decree include approval of the proposals recommended by the consortium and authorization from the government to form the joint ventures Gasmotors, between the Ministry of Water Management, Uzautorans Corporation and the American consortium member American Engineering, Inc.; and the second joint venture, Gascompressor, between Uzgosnefteprodukt Association (the former oil and gas ministry) and American Engineering, Inc. The Gasmotors venture is responsible for vehicle conversions and eventual manufacturing of conversion components, while the Gascompressor venture is charged with providing refueling infrastructure.

The decree mandates the Uzbek National Bank for Foreign Economic Activity to sign the necessary loan and refinancing agreements with U.S. banks, and the Uzbek Ministry of Finance to issue its sovereign national guarantee against the loans to the ventures. All appropriate agencies are ordered to assist the registration of the joint ventures. All of the various ministries, agencies, regions and cities are ordered to cooperate in allocating land required for deployment and administration of the refueling stations. Finally, the joint ventures are included under the Uzbek Foreign Investment Law, which guarantees various benefits including a five-year tax holiday, repatriation of profits and open conversion of the local currency to dollars prior to the repatriation of profits.

Negotiations are in process to finalize the two joint venture agreements between American Engineering, Inc., and CNG International, L.L.C., the American consortiums' operating entity, which has been established to house all activities in this newly independent state, and the three government ministries named as project partners. Current plans call for the joint venture documents to be signed on the 26th of June when President Karimov will be in Washington, D.C. The Uzbek President will meet with top level U.S. government officials prior to private industry meetings to be held in Houston, Denver and Seattle with many of the various companies involved in developing Uzbek ventures.

ExproFuels has the right to further increase its current 10.82 percent interest in CNG International, L.L.C. The company has responsibility for operating the 200,000 vehicle conversion program with oversight responsibility for the installation and operation of approximately 360 CNG refueling stations. Subsequent to the initial 5-year period, ExproFuels will maintain its ownership interest in all manufacturing, repairs, conversions, exports and refueling station activities. Company officials anticipate this interest and associated fees earned for work performed on these projects will significantly enhance its earnings potential and international operating levels.

ExproFuels, a division of The Exploration Company, converts gasoline and diesel engines to operate on CNG, liquefied petroleum gas (LPG) and liquefied natural gas (LNG). The division also designs, builds, owns, operates and provides fuel for alternative fuels stations. The Exploration Company is an oil and gas exploration and production company, publicly traded on the NASDAQ exchange under the symbol "TXCO".

CONTACT: ExproFuels Division, The Exploration Company

Thomas H. Gose, 210/496-5300