Third Quarter 1998
For the period ended September 30, 1998
Press Release

MMRL Reports Excellent Progress on
its Major Developments

Message to Shareholders

Notwithstanding low crude oil prices and reduced cash flows and earnings, MMRL made substantial progress on its major projects during the third quarter of 1998. The principal accomplishments were as follows:

1. Success at Saltfleetby

The second development well at Saltfleetby has been completed and is currently being tested and evaluated. Results to date have exceeded plan with initial production rates of 15 mmcf/d of natural gas and 400 bbls/d of liquids. This well follows the previously announced development well at Saltfleetby that tested at over 10 mmcf/d of natural gas and 230 bbls/d of liquids.

Based on these results, production from Saltfleetby during its first full year should exceed 20 mmcf/d of natural gas and 500 bbls/d of liquids. At the current sales price of natural gas in the UK of $3.50 per mcf, this project should generate $22,000,000 of cash flow for MMRL in its first twelve months of operation commencing in late 1999. The development is conveniently located 11 km from one of the UK's largest gas plants at Theddlethorpe and can be tied in by pipeline along an existing pipeline right of way.

2. First Kyle Development Well Exceeds Expectation

The first development well in the Kyle offshore field demonstrated a productive capacity double the forecasted rate. Initial production from the first well is expected in May 1999 at rates net to MMRL of over 2,000 boe/d. Based on the current development plan that calls for three more development wells over the next two years, production net to MMRL in the year 2000 is expected to be 3,000 boe/d. At a Brent oil price of US$14.00 per barrel the Kyle field is expected to generate cash flow for MMRL in 1999 of $6,000,000 and in the year 2000 of over $15,000,000.

3. MMRL's UK Onshore Acreage Has Substantial Potential

Work continued during the summer on evaluating MMRL's 1.25 million onshore acreage position. A total of over 40 exploration prospects have now been identified. Several of these prospects have reserve potential comparable to Saltfleetby. Given the company's high success rate to date from onshore exploration drilling in the UK this land position provides MMRL with substantial growth potential in the years ahead.

4. MMRL Acquires Large Heavy Oil Acreage Position

In September, 1998 MMRL completed the assembly of the final portion of a large acreage position in North East Alberta. MMRL is a 33.3% partner in this land acquisition located about 65 km north of the Pelican Lake heavy oil project. This acreage is estimated to contain over one billion barrels of oil in place. Testing is continuing to determine if this oil can be recovered economically using primary recovery techniques.

Production

Total production averaged 4,025 boe/d in the third quarter down 43% from the second quarter and down 49% from a year earlier. Crude oil and natural gas liquids averaged 3,848 bbls/d in the third quarter of 1998 as compared to 6,443 bbls/d a year earlier. Natural gas production averaged 1.2 mmcf/d in the third quarter of 1998 versus 13.5 mmcf/d in 1997. These results reflect the asset sales made during the second quarter of 1998.

Financial

Cash flow from operations totalled $1.8 million in the third quarter or $0.12 per share fully diluted as compared to $10.4 million or $0.57 per share a year earlier and $5.0 million in the second quarter of 1998. A net loss of $3.2 million was recorded in the third quarter or $0.19 per share fully diluted, compared to net earnings of $3.2 million last year. The year to date net loss was $6.7 million or $0.37 per share fully diluted compared to net earnings of $9.2 million in 1997.

Drilling

For the three month period ended September 30, 1998, MMRL participated in the drilling of 2 wells, one of which was the successful Kyle well and the second a successful oil well onshore in the UK. During this period of low crude oil prices, the company has deferred the drilling of its onshore oil and gas prospects and allocated its financial resources and capital spending to its two major development projects at Saltfleetby and Kyle.

Outlook

MMRL continued its focus on efficiency and cost savings which has resulted in a number of staff reductions. The financial benefit of these restructuring efforts will be reflected in results commencing on January 1, 1999.

Based on the production capacity in both Saltfleetby and Kyle together with the company's recent cost cutting measures, cash flow in 1999 should be considerably higher than 1998 levels even at existing commodity prices. Cash flow at the end of 1999, when both projects are on stream, is expected to be running at annual rates of $40,000,000.

Peter A. Braaten
President and C.E.O.
November 19, 1998

This news release contains forward-looking information. Actual future results may differ materially. The risks, uncertainties and other factors that could influence actual results are described in MMRL's annual report to shareholders and other documents filed with regulatory authorities.