EXHIBIT 99.1


                                           CONTACT:
                                           Michael E. Luttrell
                                           Vice President-Finance
                                           and Chief Financial Officer
                                           (713) 658-9444

July 21, 1999

                 SOUTHERN MINERAL ANNOUNCES RESTRUCTURING PLANS

Houston, Texas--Southern Mineral Corporation (NASDAQ: SMIN) announced that its
Board of Directors has approved a restructuring of the Company that involves a
$20.6 million equity infusion, the sale of certain properties in Texas and an
exchange offer for its 6.875% Convertible Subordinated Debentures due 2007.  The
restructuring plan comes after an extensive process by the Company to evaluate
strategic opportunities for the Company to maximize shareholder value.  The
Company expects that the restructuring, including the equity infusion, and the
asset sale will improve the Company's financial condition and allow the Company
to pursue new opportunities for growth in the future.

The sale of the Company's properties consists of the sale of certain proven and
unproven property interests in Texas to ANR Production Company, for $16.28
million, subject to certain adjustments.  The properties include all of the
Company's interest in the Brushy Creek and Texan Gardens Fields in Dewitt,
Lavaca and Hidalgo counties of Texas. The transaction is expected to close by
early August 1999, following the satisfaction of certain conditions, but is not
conditioned on the restructuring transactions described below.  The Company
expects that the proceeds from the sale will be used primarily for reduction of
its domestic bank indebtedness with the remainder, if any, for general corporate
purposes.

The financial restructuring involves a $20.6 million equity investment by
affiliates of EnCap Investments L.L.C. (EnCap) in exchange for 43,829,787 newly
issued shares of the Company's Common Stock pursuant to a Stock Purchase
Agreement, which number of shares will represent a controlling interest in the
Company.  With over $1 billion in funds under management, EnCap Investments L.C.
is an institutional funds management firm specializing in financing the upstream
and midstream sectors of the oil and gas industry.  EnCap is a wholly-owned
subsidiary of El Paso Energy Corporation (NYSE:EPG).

The EnCap transaction is conditioned upon, among other things, exchange of at
least 98% of the Company's outstanding Convertible Debentures for a combination
of cash, Common Stock and warrants to purchase Common Stock and receipt of
certain third party consents.  For each $1,000 principal amount of Convertible
Debentures (including



accrued interest), the Company will offer to exchange (1) 377.8 shares of Common
Stock, (2) warrants to purchase 188.9 shares of Common Stock for a period of
three years for an exercise price of $1.50 per share, and (3) $241.50 in cash.
Consummation of the restructuring is also conditioned upon shareholder approval
of the issuance of the additional shares to EnCap and the shares and warrants to
the debenture holders. Certain fees will be payable to EnCap in connection with
the transactions.

If the exchange offer is unsuccessful, but certain other conditions are met, the
Company may proceed with the EnCap investment and the restructuring of its
capital structure through a prepackaged plan of reorganization under Chapter 11
of the U. S. Bankruptcy Code.

This news release is neither an offer to purchase, sell or exchange any
securities of Southern Mineral nor a solicitation of an offer to purchase, sell
or exchange securities. Solicitations and acceptance of the exchange offer and
the prepackaged plan will only be made by a proxy statement/ prospectus/
disclosure statement. Copies of the preliminary proxy/statement/ prospectus/
disclosure statement may be obtained from the Company.

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, the Mid-Continent, 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
listed on the NASDAQ National Market under the symbol SMIN, and its Convertible
Debentures are listed on the NASDAQ Smallcap Market under the symbol SMING.

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 uncertainties related to
successful negotiations with other parties, price volatility, production levels,
closing of the transaction, capital availability, 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.