DENVER, Colorado -- Tipperary Corporation (AMEX-TPY), an independent oil and gas company, today announced that it has closed the previously announced $11.7 million financing transaction with Slough Estates USA Inc., the Company's largest shareholder.

The debt and equity financing is comprised of a loan in the amount of $6 million to be used for development of the Comet Ridge coalbed methane project; $4 million from the issuance of 2 million shares of restricted Tipperary common stock; and an additional loan in the amount of $1.7 million. The proceeds from the $1.7 million loan and the issuance of common stock were used to reduce bank debt by $4.7 million with the Company retaining $1 million for working capital.

The $1.7 million loan was combined with amounts previously owed to Slough including $2.7 million due as of September 30, 1998 and $1.1 million borrowed subsequent to September 30, 1998. The combined loans, totaling $5.5 million, are due under the terms of a three-year note bearing interest at the London Interbank Offered Rate (LIBOR) plus 3.5%.

The commitment for the $6 million loan was made to the Company's wholly-owned Australian subsidiary, Tipperary Oil & Gas (Australia) Pty Ltd., and the proceeds will be used to fund the drilling of eight wells and to expand the gathering system on the Comet Ridge project. Tipperary's share of estimated costs for this development project is approximately $3.3 million. The balance of the proceeds will be available for the Company to extend loans to any other working interest owners in the project requiring financing for their proportionate share of the capital costs of this drilling program.

The $6 million loan is evidenced by a five-year note bearing interest at the rate of 10% per annum. The terms of the note also provide that Slough will receive additional payments based upon a contractual payment of 7% of gross revenues from both the existing and eight proposed wells until the loan is paid in full, and on the eight new wells thereafter. In addition to the promissory note for $6 million, Tipperary will transfer to Slough 10% of the common stock of the Australian subsidiary.

In connection with this debt and equity financing, Tipperary also issued to Slough warrants to purchase 500,000 shares of the Company's common stock at $3.00 per share, exercisable during a five-year period beginning in December 2000 and ending in December 2005.

David L. Bradshaw, Tipperary's president and chief executive officer, said, "We are pleased to have consummated this financing with our largest shareholder. It allows us to move forward aggressively to further develop the Comet Ridge Coalbed Methane project in Australia, and reduce bank debt substantially."

In addition to its interest in the Comet Ridge Project, Tipperary has producing properties primarily in the Rocky Mountain region and in the Permian Basin of west Texas and southeast New Mexico.

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 Corporation expects or anticipates will or may occur in the future are forward-looking statements. Readers are encouraged to read the SEC reports of Tipperary Corporation, particularly its Annual Report on Form 10-K for the year ended September 30, 1998, for meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management.