Costilla Energy, Inc.
Ticker: COSE 400 West Illinois, Suite 1000
Exchange: NASDAQ-National Market Midland, Texas 79701
Industry: Natural Resources (915) 683-3092

Type of Shares:Common Shares Filing Date:7/26/96
U.S. Shares:4,800,000 Offer Date:10/2/96
Non-U.S. Shares:0 Filing Range:$14.00 - $16.00
Primary Shares:4,800,000 Offer Price:$12.50
Secondary Shares:0 Gross Spread:$0.88
Offering Amount: $72,000,000 Selling:$0.50
Expenses: - Reallowance:$0.10
Shares Out After:10,000,000

ManagerTierPhone
Prudential Securities IncorporatedLead Manager (212) 214-3000
Rauscher Pierce Refsnes, Inc.Co-manager (214) 978-5491

Audited
Income
Latest
Unaudited
Income
Prior
Unaudited
Income
Balance
Sheet
12/31/95 3/31/96 3/31/95 3/30/96
Revenue:$21.82$8.95$2.18Assets:$91.02
Net Income:-$4.31$0.00-$1.05Liabilities:$86.88
EPS:Equity:$4.14

Note: Dollar amounts are in U.S. millions; Audited figures expressed as full year,
unaudited figures are partial year

Business Description
The company explores for and develops oil and gas properties in the Texas portion of the Permian Basin and the Gulf Coast, as well as in the Rocky Mountain region of the U.S. The company's strategy focuses on increasing reserves through a targeted exploration program, the exploitation of its existing properties and selective property acquisitions. In addition, the company recently acquired an interest in a concession for the development of mineral interests in the Republic of Moldova, in Eastern Europe. The company also has minor interests in the domestic gas gathering and transmission business. The company's predecessor began operating in 1988 with the strategy of acquiring and exploiting undervalued oil and gas properties, and at December 31, 1992 had net proved reserves of 4.7 MMBOE. Since January 1, 1993, the company has successfully closed seven transactions for an aggregate purchase price of approximately $101 million.

Use of Proceeds
The proceeds from the proposed offering will be used to repay existing indebtedness, to pay certain costs incurred in connection with the Corporate reorganization, and for general corporate purposes.

Last updated: 10/28/96

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