DENVER, Colorado --Tipperary Corporation (AMEX-TPY), an independent energy company, today announced that its 90%-owned subsidiary, Tipperary Oil & Gas (Australia) Pty Ltd, has entered into a new contract to supply gas from the Comet Ridge Coalbed Methane project to ENERGEX Retail Pty Ltd, a Brisbane-based national retail electricity and gas distributor owned by the Queensland government.

The five-year contract calls for an increase in the gas quantities currently being delivered under a contract Tipperary entered into with gas utility Allgas Energy Ltd. in September 1998. ENERGEX acquired a major shareholding in Allgas in July 1998. The new contract calls for increasing gas volumes up to a potential of approximately 15 million cubic feet per day during the period June 1, 2000 through May 31, 2005. Tipperary owns a 61.25% interest in the Comet Ridge project, and the remaining interest holders will be entitled to elect to participate in this contract as well. Tipperary will sell between approximately 58% and 100% of the contract volumes, depending upon how many other owners in the project participate.

The contract contemplates a new development drilling program on the Comet Ridge project to establish increased production. The Company's share of development costs will be borrowed under a credit facility provided by TCW Asset Management Company. Tipperary previously announced that it had entered into a credit agreement with TCW to provide funding of up to $17 million. The Company will use $6 million to refinance a project loan from Slough Estates USA Inc., the Company's major shareholder, and for working capital. The balance will be used to finance further development of the Comet Ridge project and to offer financing to other project participants.

The total volumes deliverable during the term of the new five-year contract could be as high as approximately 19 Bcf. At current exchange rates, these maximum volumes would generate approximately $25 million in revenues over the life of the contract. Tipperary's share of this maximum potential value would fall between $14.5 million and $25 million, depending upon how many other owners elect to participate.

David Bradshaw, CEO of Tipperary, said, "We are pleased to announce this expansion of our ongoing relationship with ENERGEX. It represents a substantial new revenue source to Tipperary and will allow us to begin new development drilling to be funded by our credit facility with TCW Asset Management Company. We also believe this new contract is of particular importance to the state of Queensland in view of its recently announced energy policy, which requires increasing usage of fuels that will reduce greenhouse gas emissions."

In addition to its major interest in the Australia coalbed methane project on Authority to Prospect (ATP) 526, Tipperary's 90% owned subsidiary - Tipperary Oil & Gas (Australia) Pty Ltd - owns exploration permits on ATPs 655 and 675 near ATP 526 in Queensland. Also, the Company has producing oil and gas properties in the United States, which are being sold in connection with a shift in the Company's direction toward increasing reserves and production from coalbed methane properties in the United States, Australia and possibly other countries.

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-K for the Fiscal Year Ended September 30, 1999, for meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management.