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THE EXPLORATION COMPANY ANNOUNCES ACQUISITION OF CANADIAN LEASES

THE EXPLORATION COMPANY ANNOUNCES ACQUISITION OF CANADIAN LEASES
 SAN ANTONIO, Nov. 4 /PRNewswire/ -- The Exploration Company (TXCO) (NASDAQ) announced today the signing of an agreement whereby TXCO has acquired an interest in 18,337 acres of Crown leases and licenses located in five areas approximately seventy-five miles northwest of Edmonton, Alberta, Canada from Canadian Synergy Oil & Gas Ltd. in exchange of 12,500,000 shares of TXCO's common stock.
 The leases/licenses lay in an area of numerous potentially productive horizons with some areas having as many as 8-10 mappable zones. Drilling on the leases/licenses is attractive because of the numerous pay zones that could be present in any well although drilling depths range from only 2,500 to 4,900 feet on the blocks. The general area has had a drilling depths range from only 2,500 to 4,900 feet on the blocks. The general area has had a drilling success ratio of well over fifty percent. Most of the zones are gas laden and increasing gas markets greatly enhance the viability of an attractive drilling program on the acreage. The signing of the North American Free Trade Agreement by the U.S. and Canada and increasing gas prices and demand in the U.S. serve to make these leases even more valuable.
 Under its previously announced agreement with EP Operating (EPO), a subsidiary of Enserch Exploration, Inc., EPO drilled the Barclay No. 1- 138 on 40,000 acres held by TXCO in Maverick County, Texas. Although the well was not productive and was plugged to abandon, it proved that seismic could identify porosity zones within the highly productive Glenrose formation in the area. Consequently, TXCO and EPO have agreed to immediately begin an extensive 3-D seismic program covering 21 square miles on the 40,000 acres. In addition, TXCO, in conjunction with EPO, has entered into an agreement with Terry Resources, Inc. wherein TXCO has the option to acquire a 12.5 percent interest in an additional 42,500 acres adjacent to the leases in Maverick County by drilling a well on the Chittim Ranch. TXCO and EPO plan to begin the well within the next few weeks. Under a separate agreement covering an additional 10,000 acres of TXCO's leases, Prime Operating, a subsidiary of Prime Energy, is surveying a location on the block in anticipation of drilling a horizontal well in the Glenrose formation prior to the end of the year.
 TXCO is also actively pursuing additional opportunities in the natural gas vehicles (NGV) industry since TXCO's previously announced termination of its agreement with Global Environmental Industries, Inc. TXCO believes that the recent signing of the Comprehensive National Energy Policy Act of 1992 by President Bush will have a tremendous impact on the NGV industry due to the extensive tax incentives granted to companies and individuals who convert their vehicles to run on alternative fuels. TXCO intends to be actively involved in the NGV industry in the near future.
 -0- 11/4/92
 /CONTACT: James E. Sigmon, president of the Exploration Company, 210-496-5300/ CO: Exploration Company; Canadian Synergy Oil & Gas Ltd. ST: Texas IN: OIL SU: TNM


WB-AH -- NY037 -- 2525 11/04/92 13:19 EST
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Publication:PR Newswire
Date:Nov 4, 1992
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