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MCFARLAND ENERGY AGREES TO $16 MILLION PURCHASE OF SUBSTANTIAL CALIFORNIA PRODUCING PROPERTY; RESERVES TO INCREASE MORE THAN 50 PERCENT

 SANTA FE SPRINGS, Calif., Nov. 9 /PRNewswire/ -- In a move significantly expanding the company's size and reserve base, McFarland Energy Inc. (NASDAQ: MCFE) has agreed to purchase the Star Fee property in Section 26 of the Midway Sunset oil field in Kern County, Calif. The Star Fee is in the northern portion of Midway Sunset, approximately one- eighth mile northwest of the McDonald Lease, McFarland Energy's principle crude oil producing property.
 According to the agreement, McFarland Energy will pay $16,000,000 for the 100 percent revenue interest in the Star Fee. To date, over 90 percent of the owners in interest have agreed to sell, and more acceptances are anticipated, McFarland estimates proved recoverable reserves of 3.7 million barrels of oil to the 100 percent interest.
 The Star Fee purchase will be effective as of Oct. 1, 1993, with closing anticipated by Nov. 30. The purchase is subject to the negotiation of final documents. McFarland Energy will assume operations immediately upon closing. The company has arranged to finance the acquisition through its existing lender.
 J.C. "Mac" McFarland, the company's chairman and chief executive officer, commented, "This transaction is an important milestone in our active search for compatible acquisitions. The Star Fee acquisition will increase our reserves by over 50 percent and will favorably impact long-term revenue, operating cash flow and earnings.
 "Our experience and knowhow at the McDonald Lease will translate into production enhancements and cost efficiencies at Star Fee. When the transaction is completed, we look forward to providing further information about this prime property and our plans for its development."
 McFarland Energy Inc. is an independent oil and gas exploration and production company headquartered in Santa Fe Springs, with operations in California and the Gulf Coast. Its stock is listed on NASDAQ's National Market System.
 -0- 11/9/93
 /CONTACT: Ron Yoshihara, 310-944-0181/
 (MCFE)


CO: McFarland Energy Inc. ST: California IN: OIL SU: RLE

NY-LM -- LA014 -- 2065 11/09/93 08:34 EST
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Publication:PR Newswire
Date:Nov 9, 1993
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