Parallel Petroleum Corporation Announces Additional Oil & Gas Hedges.

Business Editors/Energy Writers

MIDLAND, Texas--(BUSINESS WIRE)--Jan. 28, 2003

Parallel Petroleum Corporation (Nasdaq:PLLL) today announced that it has entered into additional oil and gas hedge contracts with BNP Paribas.

A recap for the period of time, number of MMBtu's, number of barrels, and swap prices are as follows:

                                                        Houston Ship
                                           MMBtu of      Channel Gas
Period of Time                           Natural Gas      Swap Price
--------------                         ---------------  -------------
April 1, 2003, thru Oct. 31, 2003           428,000         $4.825

                                                            NYMEX
                                                          Oil Swap
Period of Time                         Barrels of Oil       Price
--------------                         ---------------  -------------
Jan. 1, 2006, thru Dec. 20, 2006            265,500         $23.04

Management Comments

Larry C. Oldham, Parallel's president, commented, "Parallel has about 50% of its estimated current gas volumes hedged for the seven-month period from April 2003 through October 2003. Sixty percent of the gas hedge is based on a no cost collar comprised of a $4.25 floor and a $5.30 ceiling price per MMBtu, as we announced on Jan. 3, 2003. Forty percent of the gas hedge is based on a fixed swap price of $4.825 per MMBtu, as shown in the table above.

"We also have approximately 75% of our estimated current oil production hedged for the 45-month period from April 2003 through December 20, 2006 based on NYMEX Oil Swap Contracts at fixed oil prices per barrel of $24.58 for April 2003 through December 2003, $23.19 for calendar year 2004, $22.77 for calendar year 2005, as we announced on December 3, 2002, and $23.04 for January 2006 through December 20, 2006, as shown in the table above."

Oldham further commented, "Both oil and gas prices have been very volatile over the last 12 months with gas prices ranging from a high of $5.65 to a low of $2.90 per MMBtu and oil prices ranging from a high of $35 to a low of $18 per barrel. Our existing oil and gas hedges protect a portion of our revenues and cash flow and further enhance our ability to fund our budgeted capital investments and to repay our obligations under our existing credit facility in a volatile price environment."

In a final comment, Oldham stated, "These hedges allow us to receive a very good price on approximately 62.5% of our anticipated oil and gas sales volumes starting in April 2003 through December of 2003 regardless of whether prices go up or down. The hedges do not include any new oil and gas production that may be added as a result of our Jan. 17, 2003, announced $8 million capital investment budget for fiscal year 2003."

The Company

Parallel Petroleum Corporation is headquartered in Midland, Texas, and is an independent energy company primarily engaged in the acquisition, development and production of oil and gas using enhanced oil recovery techniques including 3-D seismic technology. Additional information on Parallel Petroleum Corporation is available at www.parallel-petro.com.

This release contains forward-looking statements subject to various risks and uncertainties that could cause the company's future plans, objectives and performance to differ materially from those in the forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "subject to," "anticipate," "estimate," "continue," "present value," "future," "reserves," "appears," "prospective" or other variations thereof or comparable terminology. Factors that could cause or contribute to such differences could include, but are not limited to, those relating to the results of exploratory drilling activity, the company's growth strategy, changes in oil and natural gas prices, operating risks, availability of drilling equipment, outstanding indebtedness, changes in interest rates, dependence on weather conditions, seasonality, expansion and other activities of competitors, changes in federal or state environmental laws and the administration of such laws, and the general condition of the economy and its effect on the securities market. While we believe our forward-looking statements are based upon reasonable assumptions, these are factors that are difficult to predict and that are influenced by economic and other conditions beyond our control. Investors are directed to consider such risks and other uncertainties discussed in documents filed by the company with the Securities and Exchange Commission.