SEAGULL ENERGY CORPORATION                   1001 Fannin
NEWS RELEASE                                 Suite 1700
                                             Houston, Texas 77002
                                             (713) 951-4700



FOR IMMEDIATE RELEASE

Contacts:
         Alan Payne                          Judith Wilkinson
         Seagull Energy Corporation          The Abernathy MacGregor Group, Inc.
         713-951-4700                        212-371-5999


                 SEAGULL ENERGY AMENDS SHAREHOLDER RIGHTS PLAN

     HOUSTON,  TEXAS  (DECEMBER 15, 1997) -- Seagull Energy  Corporation  (NYSE:
SGO)  announced  today that its Board of  Directors  has amended  the  Company's
Shareholder  Rights Plan to, among other  things,  reduce the threshold at which
the Rights  become  exercisable  from 20% to 10%.  Under the amended  plan, if a
person or group acquires or seeks to acquire beneficial ownership of 10% or more
of  Seagull's  common  stock or  announces a tender  offer which would result in
ownership  by a person or group of 10% or more of the common  stock,  each Right
would entitle the other  shareholders  to buy $30.75 worth of Seagull shares for
half  of  the  then-current,  per-share  market  price.  Any  shareholder  whose
ownership exceeded 10% on December 12, 1997, and who does not acquire additional
shares, is excepted from this amendment.

     The  Shareholder  Rights  Plan,  which was  initially  adopted in 1989,  is
intended to ensure that all of the Company's shareholders receive fair and equal
treatment in the event a hostile  takeover of the Company is  attempted,  and to
guard against partial tender offers, squeeze-outs, open-market accumulations and
other abusive takeover activities.

     Seagull also announced  today that Carl C. Icahn has recently  notified the
Company that he has made a filing with the Antitrust  Division of the Department
of Justice under the  Hart-Scott-Rodino  Antitrust  Improvements Act of 1976. In
his  filing,  Mr.  Icahn  indicated  that he  intends to acquire at least 15% of
Seagull's  common  stock  "depending  upon  various  factors   including  market
conditions." Except for the  Hart-Scott-Rodino  notice,  Seagull has not had any
contact with Mr.  Icahn,  and Seagull has not been  informed of any purchases of
Seagull shares by Mr. Icahn.

     Houston-based  Seagull is an  international  oil and gas company engaged in
exploration  and  development  in  the  United  States,  Egypt,  Cote  d'Ivoire,
Indonesia and the Russian Republic of Tatarstan. It also transports, distributes
and markets natural gas, liquids products and petrochemicals.