EXHIBIT 99.1


SOUTHERN MINERAL CORPORATION
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NEWS RELEASE                               CONTACT:
                                           Michael E. Luttrell
                                           Vice President-Finance
                                           and CFO
                                           (713) 658-9444

July 5, 2000


         SOUTHERN MINERAL ANNOUNCES AGREEMENT TO EMERGE FROM BANKRUPTCY

Houston, Texas - Southern Mineral Corporation (OTC Bulletin Board: SMINQ.OB)
today announced an agreement among all parties contesting its current Plan of
Reorganization ("the Plan") to support an amendment to its Plan to emerge from
bankruptcy. Among other arrangements, the amendment will provide for the
issuance of common stock to its current Convertible Subordinated
Debentureholders that, when issued, will represent approximately 78% of the
common shares.  In addition, a cash payment of $5 million will be made on a pro
rata basis to the Debentureholders. This agreement replaces the prior filed Plan
that provided for an exchange into convertible preferred stock and a $1.4
million cash payment. The agreement also provides that the current common
shareholders will receive warrants allowing them to increase their ownership to
up to 40%. The Bankruptcy Court has set July 19, 2000 to complete the
confirmation hearing on the Plan subject to certain restrictions. Upon
confirmation, a new slate of seven directors will take office and be comprised
of two members of the Company's current Board and five members selected by the
contesting parties.

Southern Mineral Corporation is an oil and gas acquisition, exploration and
production company that owns interests in oil and gas properties located along
the Texas Gulf Coast, Canada and Ecuador. The Company's principal assets include
interests in the Big Escambia Creek field in Alabama and the Pine Creek field in
Alberta, Canada. The Company's common stock is quoted on the OTC Bulletin Board
under the trading symbol "SMINQ.OB".

This news release contains forward-looking statements within the meaning of the
Securities Litigation Reform Act. The projections and statements reflect the
Company's current views with respect to future events and financial performance
that involve risks and uncertainties including price volatility, production
levels, drilling results, capital availability, successful negotiations with
other parties, evaluation of opportunities, operational and other risks,
uncertainties and factors described from time to time in the Company's publicly
available SEC reports.  Actual results may differ materially from those
projected.