Parallel Petroleum Corporation Announces Completion of Three Wells

    Business Editors/Energy Editors

    MIDLAND, Texas--(BUSINESS WIRE)--March 31, 2005--Parallel Petroleum Corporation (NASDAQ:PLLL) today announced the completion of three wells representing the earliest results of its $43.7 million 2005 capital investment budget. Please refer to Parallel's recent Operations Update press release dated March 15, 2005, for additional information on the Company's operations and 2005 capital investment budget.
    Lion Diamond M Unit No. J-1W well, Diamond M Canyon Reef Unit, Scurry County, Texas - This well, operated by Parallel, was tested at an approximate rate of 120 barrels of oil per day and 30 Mcf of gas per day, or 125 gross BOE per day (approximately 70 BOE per day net to Parallel), from four sets of perforations between 6,882 feet and 6,937 feet in the Canyon Reef formation. Parallel owns an approximate 66% working interest (57% net revenue interest) in this well. This well is the first of 24 workovers planned for 2005 in the Diamond M Canyon Reef project, which are primarily targeting porosity intervals below the main reef pay.
    Area 1 gas well, New Mexico Gas Project, Eddy County, New Mexico - This non-operated well is currently flowing to sales at an approximate rate of 4.0 million cubic feet of gas and 6 barrels of oil per day, or 673 gross BOE per day (approximately 100 BOE per day net to Parallel). Parallel owns an approximate 18.1% working interest (14.8% net revenue interest) in this well. This production is from a true vertical depth of approximately 4,800 feet and is producing from a 4,000-foot horizontal completion. Additional wells are planned to be drilled in this area.
    Wilcox well, Onshore Gulf Coast, Jackson County, Texas - This non-operated well is currently flowing to sales from a Wilcox sand at an approximate rate of 8.2 million cubic feet of gas and 166 barrels of oil per day, or 1,532 gross BOE per day (approximately 180 BOE per day net to Parallel), on a 16/64-inch choke with flowing tubing pressure of 7,000 pounds per square inch. Parallel owns an approximate 15.9% working interest (11.9% net revenue interest) in this well. The operator plans additional drilling on the prospect.

    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," "planned," 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 NEW MEXICO INDUSTRY KEYWORD: OIL/GAS ENERGY SOURCE: Parallel Petroleum Corporation

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