Rexene Provides Update on Program to Enhance Shareholder Value.

DALLAS--(BUSINESS WIRE)-- Dec. 11, 1996--Rexene Corporation (NYSE:RXN), in a presentation at the Schroder Wertheim Chemical Conference in New York today, said that all three major projects in its expansion and improvement program are on schedule, with polymer production at the company's new 75 million pound REXflex polyolefin plant expected to begin within several days. This program is expected to significantly enhance shareholder value at Rexene over the next several years.

"Our REXflex FPO plant is in the midst of its mechanical start-up," said Rexene Chairman and Chief Executive Officer Andrew J. Smith. "Likewise, our olefins modernization and expansion is on schedule, with detailed engineering underway and four crackers to be delivered to the site in Odessa, Texas, in early 1997. That program will add 260 million pounds to our present 540 million pounds of ethylene capacity.

"We're also on schedule to start construction of our 220 million pound 'Compact' process linear low density plant in the second quarter of next year," Smith continued. "Detailed engineering plans are well underway and equipment is being ordered. Finally, a debottlenecking and efficiency improvement of our polypropylene business is now underway. That should be completed in the second quarter of 1997 and will add 30 million pounds, or approximately 16 percent, to our capacity on an annualized basis."

As a result of these and other projects now underway, Smith said Rexene is well positioned to continue building value for shareholders. He noted that Rexene has increased its net worth by nearly $165 million since the bottom of the last cycle in the chemical industry at the end of 1993.

"We've got a better asset base by far as we enter 1997," Smith said. "We have more efficient polyethylene and polypropylene production capabilities, 20 million additional pounds of APAO, a CT Film division that truly has global reach, a better customer mix and an improving cost structure. On top of that, we have a 75 million pound REXflex polymer plant, steadily improving olefin production costs expected to reach $25 million in cost reductions by the end of 1998, and a new 220 million pound premium LLDPE production plant expected to start up by the end of 1998. Clearly, the prospects for value creation at Rexene are very strong."

In his remarks at the Schroder Wertheim conference, Smith noted that Rexene saw steady improvement in operations for the first three quarters of 1996 due to generally strong demand for its polyethylene and propylene derivative businesses. Earnings improved from 34 cents per share in the first quarter to 39 cents per share in the second quarter to 45 cents per share in the third quarter.

This trend is not expected to continue in Rexene's fourth quarter, however, due primarily to the impact of recent higher feedstock costs affecting the industry. As a result, the company expects to report fourth quarter earnings per share at or near the levels reported in the first and second quarters of 1996.

"While product demand and pricing remains good, natural gas liquids (NGL) feedstock costs increased dramatically in late November and early December," Smith said. "These share increases will have a negative impact on earnings in December and January. We would expect to see this seasonal effect on feedstock prices moderate, and have seen some moderation in the past few days. However, higher feedstock costs over the past few weeks will flow through our operations and we do not anticipate sufficient increases in finished product prices over the short term to offset these costs.

Rexene Corporation, through its Rexene Products and CT Film divisions, manufactures thermoplastic resins and plastic film. Headquartered in Dallas, Texas, the company has manufacturing facilities in Texas, Wisconsin, Georgia, Delaware, Utah and in England.

CONTACT: Neil Devroy, Rexene Corporation, 972/450-9101