Parallel Petroleum Announces Closing Acquisition of Additional Interes

    Business Editors/Energy Editors

    MIDLAND, Texas--(BUSINESS WIRE)--Jan. 5, 2005--Parallel Petroleum Corporation (NASDAQ:PLLL) today announced that its wholly owned subsidiary, Parallel, L.P., acquired an additional 7.1% average working interest and 5.4% average net revenue interest associated with its producing properties in the Means Queen Unit and Carm-Ann San Andres Fields. These additional interests, which were acquired yesterday and today, were purchased from 10 unaffiliated parties for a combined purchase price of approximately $1.52 million, after closing adjustments. These acquisitions represent the closing of 10 of the remaining 11 transactions related to the 28 Purchase and Sale Agreements that the Company announced on December 1, 2004 and December 31, 2004. The 10 purchases that were closed yesterday and today represent a combined estimated 268,000 BOE of proved oil and gas reserves, with current production of approximately 27 BOE per day net to Parallel. Subject to curing certain title defects, additional interests are expected to be acquired later in January for an aggregate purchase price of approximately $764,000. Parallel financed the acquisition using a portion of its revolving credit facility provided by First American Bank SSB, BNP Paribas, Citibank, F. S. B. and Western National Bank.

    Property Information

    The properties are located in Andrews and Gaines Counties in the Permian Basin of west Texas, produce from the Queen and San Andres formations at depths of approximately 4,200 to 4,900 feet, and consist of 25 leases covering approximately 5,360 gross contiguous acres, with 67 gross producing oil wells. Upon closing of yesterday's and today's transactions, Parallel's average working interest in these properties increased from approximately 69.8% to approximately 76.9%, and its average net revenue interest increased from approximately 53.8% to approximately 59.2%.

    The Company

    Parallel Petroleum is an independent energy company headquartered in Midland, Texas, primarily engaged in the acquisition, development, exploration and production of oil and gas using enhanced oil recovery techniques and 3-D seismic technology. Additional information on Parallel Petroleum Corporation is available at www.plll.com.

    This release contains forward-looking statements subject to various risks and uncertainties that could cause the company's future plans, objectives and performance to differ materially from those in the forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "subject to," "anticipate," "estimate," "continue," "present value," "future," "reserves," "appears," "prospective," or other variations thereof or comparable terminology. Factors that could cause or contribute to such differences could include, but are not limited to, those relating to the results of exploratory drilling activity, the company's growth strategy, changes in oil and natural gas prices, operating risks, availability of drilling equipment, outstanding indebtedness, changes in interest rates, dependence on weather conditions, seasonality, expansion and other activities of competitors, changes in federal or state environmental laws and the administration of such laws, and the general condition of the economy and its effect on the securities market. While we believe our forward-looking statements are based upon reasonable assumptions, these are factors that are difficult to predict and that are influenced by economic and other conditions beyond our control. Investors are directed to consider such risks and other uncertainties discussed in documents filed by the company with the Securities and Exchange Commission.

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CONTACT: Parallel Petroleum Corporation, Midland Cindy Thomason, 432-684-3727 cindyt@plll.com http://www.plll.com

KEYWORD: TEXAS INDUSTRY KEYWORD: OIL/GAS ENERGY MERGERS/ACQ SOURCE: Parallel Petroleum Corporation

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