HOUSTON, TEXAS, May 12, 2000 - Texoil, Inc., (NASDAQ Small Cap: "TXLI", Boston Stock Exchange "TXL") today announced financial and operating results for the first quarter of 2000.  Oil and gas and related revenues increased 170% in the three months ended March 31, 2000, over the comparable period in 1999, to $11.0 million.  The Company reported net income available for common shareholders (after preferred stock dividends) of $2.4 million for the first quarter of 2000, or $.36 per share, as compared to $173,000, or $.03 per share in 1999.  Earnings before interest, taxes, DD&A and preferred stock dividends (“EBITDA”) increased 260% to $6.7 million, or $1.01 per share, in the first quarter of 2000 from $1.9 million, or $.28 per share, for the same period in 1999.  Cash flow from operations, before changes in working capital and preferred stock dividends (“Cash Flow”) was $6.3 million, or $.95 per share, compared to $1.3 million, or $.20 per share, for the first three months of 1999.

On a barrel of oil equivalent basis (“BOE”), production during the first quarter of 2000 totaled approximately 524,000 barrels of oil, a 64% increase over the first quarter of 1999.  Production volumes increased to 301,000 barrels of oil (“Bbls”) and 1.3 billion cubic feet of gas (“Bcf”), an increase of 79% and 47%, respectively, over first quarter production for 1999.  The Company’s average oil price for the three months ended March 31, 2000, increased 114% to $23.78 per Bbl, compared to $11.09 per Bbl for the same period in 1999.  Average gas prices increased 23% for the first quarter of 2000 to $2.57 per Mcf, compared to $2.09 per Mcf for the comparable period of 1999.  Average prices reflect the results of hedging activities.

Comparison of First Quarter 2000 to Fourth Quarter 1999

Revenues increased $2,039,000, or 23%, EBITDA increased $2,174,000 or 48% and net income available for common shareholders increased $949,000 or 65% in the first quarter of 2000 over the fourth quarter of 1999.  Oil production and gas production increased 16% and 13%, respectively, over the preceding quarter. 

Management Comments

Mr. Frank A. Lodzinski, Texoil’s Chief Executive Officer stated, “Texoil continues to achieve significant increases in substantially all performance measures, including production, revenues, cash flows and profitability.  Strong product prices continue to be a favorable factor, but production increases are also a major contributor.  The Company has out-performed many of its peers, both in terms of financial performance and reserve and production growth.”

Texoil, Inc. (www.texoil.com), an independent energy company, acquires and develops oil and gas reserves through an active and diversified program that includes purchases of reserves, re-engineering, development and exploration activities, which are currently focused in Texas, South Louisiana and the Texas Gulf Coast.   

Forward-Looking Information

This release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 23E of the Securities Exchange Act of 1934, as amended.  All statements included in this release regarding the impact of recent acquisition of production properties on the Company are forward-looking statements and are based on management’s best projections.  Although the Company believes the expectations and beliefs reflected in forward-looking statements included in this release are reasonable, it can give no assurance that such expectations will prove to have been correct.  Forward-looking statements are not guarantees of future performance and actual results, developments and business decisions may differ from those envisioned by such forward-looking statements.

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