DENVER, Colorado --Tipperary Corporation (AMEX-TPY), today announced that its Australian subsidiary has entered into a Memorandum of Understanding ("MOU") with Queensland Fertilizer Assets Ltd ("QFAL") of Queensland, Australia. The MOU provides a framework for negotiation of a definitive contract which would provide that Tipperary sell up to 210 billion cubic feet of gas to QFAL over 20 years. The gas would be consumed by a fertilizer plant QFAL intends to construct in southeastern Queensland.

While the MOU is non-binding, the parties intend to begin work immediately on a final gas contract. Construction of the plant would take approximately two years and would begin approximately six months after QFAL obtains project financing for the plant and governmental approvals, both of which cannot be assured. The MOU provides that Tipperary may seek the assistance of ENERGEX Retail Pty Ltd in underwriting the gas supply obligation. ENERGEX is a wholly owned Queensland Government Enterprise, with which Tipperary has two existing gas contracts.

David Bradshaw, Tipperary CEO, and Hal Howes, Chairman of the Board of QFAL, jointly stated, "We look forward to our respective roles in making this fertilizer plant a reality. It will be a significant stimulant to the Queensland economy, as will the drilling of the wells necessary to supply the contract."

At such time as the parties enter into a final contract, Tipperary is contractually obligated to offer each participant in the Comet Ridge Project a pro-rata portion of sales under the contract.

Tipperary Corporation is an independent energy company focused primarily on exploration for and production of coalbed methane. Headquartered in Denver, Colorado, Tipperary owns 90% of Queensland, Australia-based Tipperary Oil & Gas (Australia) Pty Ltd. This subsidiary, which holds a 62.25% interest in southeastern Queensland's Comet Ridge coalbed methane project, also owns various exploration permits in Queensland. Domestically, Tipperary holds a 49% interest in the 38,000-acre Hanna Draw coalbed methane exploration project in Wyoming, and 100% of 68,000 acres in Colorado acquired for coalbed methane and conventional gas exploration.

Information herein contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as "may," "will," "expect," "anticipate," "estimate," or "continue," or comparable words. In addition, all statements other than statements of historical facts that address activities that Tipperary expects or anticipates will or may occur in the future are forward-looking statements. Readers are encouraged to read the SEC reports of Tipperary, particularly its Form 10-KSB for the Fiscal Year Ended September 30, 2000, for meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management.