ExproFuels signs participation agreement on Uzbekistan project.

SAN ANTONIO--(BUSINESS WIRE)--March 30, 1995--The Exploration Company announced today that its ExproFuels Division had signed a participation agreement with the American Technical Institute (ATI) and the American Engineering Inc. (AEI) of Memphis, Tenn. to provide project management, technical evaluation and assistance for them on their joint venture with the government of Uzbekistan.

ATI/AEI has signed agreements with agencies of the government of Uzbekistan to provide compressed natural gas (CNG) conversion and fuel station equipment, installation and maintenance training, manufacturing technology and overall management of the project which ultimately envisions the total conversion of Uzbekistan's government fleet of 350,000 vehicles to run on natural gas. ExproFuels President Tom Gose is quoted as saying, "This is by far the largest and most economical project I have seen in this industry to date. The Uzbekistan government has the opportunity to save a very substantial amount per vehicle converted per year due to the wide price margin between imported gasoline and locally produced natural gas. This, along with the fact that the government is a partner, gives them the impetus to push the joint venture forward as fast as it will go and gives us the comfort that the project will definitely move forward in a timely manner."

AEI is a for-profit entity set up specifically for this project by ATI, a non-profit nuclear engineering college, also based in Memphis, Tenn. Dr. Wayne Jones, president stated, "The CNG Project in Uzbekistan represents an opportunity for transfer of technology under a commercial enterprise to a country of the former Soviet Union which will have far reaching benefits. The project will convert a large number of motor vehicles to operate on CNG to produce estimated savings in fuel cost to the Government of Uzbekistan of over a billion dollars while at the same time creating a manufacturing infrastructure that will provide employment for hundreds of Uzbek people. Conversion of vehicles will also reduce the worldwide air pollution problem making Uzbekistan a leader in both economic development and setting environmental standards for Central Asia."

"As a priority project for the government of Uzbekistan, it has been supported from its inception by his excellency, President Islam Karimov. The Uzbek government partners are enthusiastic and will lend their facilities, expertise and unparalleled access to the Central Asian vehicle conversion market to the Joint Venture. The total investment package planned for the Uzbekistan-American Joint Venture amounts to approximately $25 million, including both private investment and bank financing."

AEI is now preparing for conversion of the first set of test vehicles. Following conversion and testing of this first group, conversion of project vehicles will ramp up to the level necessary to achieve the goals established by the Uzbekistan Government.

Other project participants include Gemini Engine Company of Corpus Christi, Texas, which will provide refueling stations needed to augment the infrastructure of Uzbekistan in support of the conversion of its vehicles to operate on CNG. The Southern States Energy Board of Atlanta, Ga. and Barents Group, LLC, a division of KPMG-Peat Marwick, LLP in Tashkent, are also cooperating with ATI/AEI in the development of the CNG Project.

Through this agreement ExproFuels plans to invest up to three million two hundred thousand dollars, as a supplement to other financing, over a scheduled period in order to earn an equity position of up to 50 percent in the ExproFuels/AEI joint venture, while AEI and other participants will retain the remaining interest in the project.

Current revenue projections from a reduced portion of the vehicles scheduled to be converted are in excess of $200 million for the joint venture. ExproFuels level of participation in the contract is dependent upon its ability to fund the project through various start-up phases. ExproFuels is currently in negotiations on raising the capital required for this investment as well as various other ongoing and potential projects.

ExproFuels is a division of The Exploration Company whose stock trades on the Nasdaq Exchange under the symbol "TXCO".

CONTACT: ExproFuels Division, San Antonio

Tom Gose, 210/490-9400