DENVER, Colorado -- Tipperary Corporation (AMEX-TPY), an independent energy company, today announced it has entered into agreements to issue $10 million of convertible preferred stock and to offer its United States oil and gas properties for sale. Cash proceeds from the financing and the divestiture of U.S. assets are anticipated to be used to substantially reduce the Company's debt and fund Tipperary's efforts to increase coalbed methane reserves.

The Company entered into a refinancing agreement with its 46% shareholder, Slough Estates USA Inc. (Slough). Slough will invest $10 million ($500,000 of which has already been advanced to the Company) in return for approximately 6.3 million shares of preferred stock, which will be convertible into common stock at a conversion value of $1.58 per common share. The agreement is subject to a closing on or before December 31, 1999.

Tipperary entered into a separate agreement with Hanifen, Imhoff Inc., a Denver investment banking firm. Under this agreement, Hanifen, Imhoff will act as the Company's exclusive financial advisor in connection with the divestiture of Tipperary's U.S. oil and gas properties. The pre-tax value of the Company's proved reserves as of September 30, 1999 was $25 million for the United States properties and $58 million for its Australia property. These values are the estimated future net revenues discounted at 10%. Tipperary's U.S. producing properties, which will be divested, are located primarily in the Rocky Mountain region and in the Permian Basin of west Texas and southeast New Mexico. The Company also owns an interest in the Point Thomson Unit on the North Slope of Alaska. This interest is not included in proved reserves reported to the Securities and Exchange Commission due to a lack of pipeline infrastructure. However, management anticipates it will be sold in the divestiture.

David L. Bradshaw, Tipperary's President and CEO, said, "After considering the comparable investment opportunities, our Board of Directors has decided to make coalbed methane our primary focus. We believe we have an opportunity to increase coalbed methane reserves significantly over the next several years. Our Australian proved reserve volumes of 131 Bcf far exceed our U.S. volumes of 25 Bcf equivalent, and we have a large undrilled area on the 1,088,000-acre Authority to Prospect (ATP) 526 on the Comet Ridge Coalbed Methane project in Queensland, Australia. Additionally, we have been granted a new ATP covering approximately 370,000 acres near ATP 526. We have applied for and expect to be granted another ATP covering approximately 850,000 acres in the vicinity."

Kenneth L. Ancell, a prominent coalbed methane engineer who recently joined Tipperary as Executive Vice President of Corporate Development, added, "I have worked on coalbed methane projects for the past 20 years and am convinced this resource will be an increasingly important fuel as we enter the next century. We are pursuing additional coalbed methane opportunities in Australia and the United States and may consider other countries as well."

Tipperary is a Denver-based independent energy company. Its 90% owned subsidiary, Tipperary Oil & Gas (Australia) Pty Ltd, holds a 370,000-acre Authority to Prospect and a 55.75% interest in the Comet Ridge Coalbed Methane project in Queensland, Australia. In addition to its Australia interests, Tipperary has producing properties in the United States.

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-K for the Fiscal Year Ended September 30, 1998, for meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management.