Maxy Oil & Gas Inc. Announces Casing to be Run on Texaco - Maxy Sanhenan No. 1 Well and Well Logs Indicate Several Intervals of Potential Pay.

VANCOUVER, British Columbia--(BUSINESS WIRE)--June 16, 1999--

Maxy Oil and Gas (VSE:MXY.) The Sanhenan No. 1 well on the Ya'an Block in Sichuan Province, China has been drilled through the primary objective T3X2 formation to a total depth of 3132 meters. Logs run on the well indicate that several intervals in the T3X5 and T3X2 formations are potentially productive. Currently, operations are underway to set casing and test the well. These activities should be completed by the latter part of June.

Efforts were unsuccessful to perform a fracture stimulation procedure on the Qiongxi No. 2 well that was drilled by the Chinese in 1995. Plans are being made to plug and abandon the well pending approval from China National Petroleum Corporation. The well had tested gas in sub-commercial quantities and Maxy believes that a combination of localized well bore damage and poor fracture development contributed to the failure to achieve fracture propagation. Despite the lack of success on this project, Maxy considers the Qiongxi structure highly prospective for future exploration.

Maxy owns a 25 percent working interest in the Yaan Block, while Texaco owns the remaining 75 percent and serves as Operator. China National Petroleum Corporation has the right to back-in for a 51 percent working interest once commerciality is established.

Maxy Oil & Gas Inc.

S. Paul Simpson, Secretary