Meridian announces plans to sell certain non-strategic properties

The Meridian Resource Corporation announced the initiation of a formal process to pursue the sale of certain non-strategic oil and gas properties located in South Louisiana, Southeast Texas and offshore Louisiana.
The properties scheduled for sale account for approximately 20 % of the Company's current net average daily production, or approximately 30 mm cfpd of gas equivalent. Proceeds from the sale will be used to reduce bank debt and supplement internal cash flow to fund Meridian's inventory of exploration and development projects scheduled for drilling in 2000 and beyond.

Joseph A. Reeves Jr., chairman of the board and CEO, commented, "This is one of a series of actions that Meridian is taking to re-position the Company and improve its share value, which management believes has been severely penalised because of several factors, including:
1) the general market perception about returns in the energy sector in light of uncertainties about the future of commodity prices;
2) the relative leverage position of the Company;
3) uncertainties created by the Enron litigation.

"Since assuming ownership of the Shell properties in July 1998, we have made tremendous strides in all areas of our operations, especially those areas which impact the Company's value and profitability. Drilling successes have exceeded 70 % for all wells drilled. Reserve replacement has exceeded 270 %, with the addition of approximately 200 Bcfe from drilling efforts and a resulting finding and development cost of less than $.50/Mcfe, exclusive of seismic and land costs.
The overall increase in reserves for the period was approximately 28 % (net of production, sales and revisions) and the increase in net daily production exceeded 22 %. In addition, the Company has reduced lifting costs to $.31/Mcfe. Combined with recent price increases, these efforts have resulted in substantially increased margins and improved cash flows and earnings.

With the Enron litigation resolved effective December 1999, the sale of the properties is the next logical step for Meridian to strengthen its financial position and focus its efforts on those properties where Meridian's exploration expertise will have the maximum positive impact on shareholder value." Chase Securities Inc. has been retained as the Company's financial advisor.