Parallel Petroleum Announces Preliminary Results of the Signal Hill #1 Well

Parallel Petroleum Corporation announced that the Signal Hill #1, located in Jackson County, Texas, has reached an intermediate depth of approximately 13,500 feet. Open-hole logs have been run and intermediate casing will be set through total depth.

Based on interpretations of the open-hole logs, preliminary indications are that the well has Yegua sand at approximately 10,350 feet that may contain hydrocarbons. The sand is approximately 15 feet thick with up to 25 ohms of resistivity and up to 33% porosity. The well will continue to be drilled through its Wilcox objectives to a planned total depth of approximately 18,000 feet, which should be reached within thirty days. Larry C. Oldham, Parallel's President, stated, "Although it is still too early to reach any final conclusions about the production capabilities of the well, we are encouraged by these preliminary developments."

Parallel owns a 27.0% working interest in the well. Beta Oil & Gas, Inc. has a 12.5% working interest in the well and Republic Resources, Inc. has a 3.125% working interest. The remaining interest is owned by private industry partners. Allegro Investments, Inc., Victoria, Texas, is the operator.

The Signal Hill #1 well is the first of three exploratory Wilcox wells that the company intends to drill within the next six months in its Jackson County, Texas Wilcox project.