DENVER, Colorado --Tipperary Corporation (AMEX-TPY), an independent oil and gas company, today announced that its 90%-owned Australian subsidiary has entered into an agreement with Queensland Fertilizer Assets Ltd (QFAL) of Queensland, Australia. The agreement states that Tipperary would sell up to 260 billion cubic feet of gas to QFAL over 20 years beginning in 2004. The gas is to be consumed by a fertilizer plant QFAL intends to construct in southeastern Queensland.

The contract provides that QFAL will have financing commitments for construction of the plant and a pipeline and Tipperary will have the financing to drill and complete enough wells to satisfy the delivery requirements.

Construction of the plant should take approximately two years and will begin approximately six months after QFAL obtains project financing for the plant and governmental approvals, neither of which can be assured.

At current exchange rates, the total volumes to be delivered under the contract should generate a minimum of US$15 million in annual revenues, or US$300 million over the 20-year life of the contract.

The agreement also provides that the price of the gas may increase after the second year of the contract based on urea price increases in excess of a specified minimum. Assuming the urea price levels during 2001 are in effect, annual sales under the contract would increase by approximately US$7 million to US$22 million annually.

Tipperary's Australian subsidiary owns a 65% interest in the Comet Ridge coalbed methane project and will offer each participant in the project a pro-rata portion of sales under the new contract.

David Bradshaw, Tipperary CEO, said, "The execution of this contract gives QFAL the opportunity to supply Queensland and eastern Australia with fertilizer produced locally from Queensland natural gas feedstock. It provides Tipperary with a basis for even more aggressive coalbed methane development. In view of the substantial benefits to QFAL, Tipperary and the Queensland economy, we are optimistic that QFAL will secure financing and go forward with this project."

Tipperary Corporation is an independent energy company focused primarily on exploration for and production of coalbed methane and conventional natural gas. Headquartered in Denver, Colorado, Tipperary owns 90% of Queensland, Australia-based Tipperary Oil & Gas (Australia) Pty Ltd. In addition to its major interest in the Comet Ridge coalbed methane project, this subsidiary owns various exploration permits in Queensland. Domestically, Tipperary holds an interest in the 38,000-acre Hanna Draw coalbed methane exploration project in Wyoming and 50% of a 65,000-acre Colorado coalbed methane exploration project in Moffat County, Colorado.

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 Annual Report on Form 10-KSB(A) for the Transition Period Ended December 31, 2000, for meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management.