Parallel Petroleum Corporation declares its second quarter 2008 average net daily production, work-in-progress, revised 2008 capital investment budget, June 30, 2008 reserves and field operations update

The Company's net daily production for the second quarter ended June 30, 2008 averaged 7,716 equivalent barrels of oil per day (BOEPD), an increase of 28% when compared to an average of 6,035 BOEPD during the second quarter ended June 30, 2007, and an increase of 2% when compared to an average of 7,592 BOEPD during the first quarter ended March 31, 2008. When comparing the second quarter of 2008 to the first quarter of 2008, production from the Company's New Mexico Wolfcamp gas project increased 12%, from 1,795 to 2,004 BOEPD due to better, and more consistent, well results and timing of completions.

Production from the Company's South Texas gas properties increased 12% from 380 to 426 BOEPD primarily due to well workovers and improved well performance. The second quarter 2008 increases were partially offset by a 4% decrease in the Company's Permian Basin oil projects, from 2,897 to 2,791 BOEPD, due to relative development timing and normal decline on base production, and a 1% decrease in the Barnett Shale gas project, from 2,520 to 2,495 BOEPD, due to natural decline and timing of completions of new wells.

Parallel has increased its 2008 capital investment budget approximately 35% from $127.2 million to approximately $171.6 million, excluding approximately $43.2 million for property acquisitions made during the second quarter of 2008. Of the $44.4 million increase, $14.0 million is for leasehold costs in the Barnett Shale; $24.2 million for leasehold costs and 9 additional wells in the New Mexico Wolfcamp Northern and Southern Areas and additional interests acquired in the Northern Area, as is discussed in the New Mexico property information below; $2.2 million for drilling and completion activities associated with the Company's increased interests in its Diamond M project related to a recent acquisition, as was announced on June 26, 2008; $1.7 million for the drilling of 3 additional wells in the Harris San Andres project; and $2.3 million for leasehold and the drilling of 1 new well in the Company's East Texas Cotton Valley Reef project.

The revised budget provides for approximately $133.8 million for the drilling and completion of approximately 121 gross (77.8 net) new wells: the workover of 53 gross (44.2 net) existing wells; and the conversion-to-injection of 14 gross (12.1 net) producing wells; and approximately $37.8 million for the purchase of leasehold and seismic data. As of June 30, 2008, Parallel had invested approximately $82.6 million of the $171.6 million budget in the drilling of approximately 59 gross (30.57 net) wells, including 33 gross (15.19 net) wells that were in progress as of June 30, 2008, and leasehold, seismic, workovers, and conversions-to-injection.

On a project basis, approximately $138.2 million, or 81%, of the 2008 capital investment budget is expected to be invested in the Company's two horizontal drilling gas projects. Parallel has budgeted approximately $74.0 million for its Barnett Shale Gas project and approximately $64.2 million for its New Mexico Wolfcamp Gas project. Additionally, the Company expects to invest approximately $28.4 million, or 17%, of the 2008 budget in its long-life, shallow oil properties located in the Permian Basin of West Texas. The remainder of the 2008 budget will be allocated to the Company's other projects.

Parallel anticipates that the $171.6 million 2008 capital investment budget will be funded from its operating cash flow and revolving credit facility. At June 30, 2008, approximately $93.0 million was available under the Company's revolving credit facility.

As estimated by its independent engineers, Parallel's proved developed producing (PDP) reserves were approximately 24.3 million equivalent barrels of oil (MMBOE) at mid-year 2008. This is a 19% increase of approximately 3.8 MMBOE when compared to PDP reserves as of December 31, 2007, and includes PDP reserve additions of approximately 5.2 MMBOE, less production run-off of approximately 1.4 MMBOE. Proved developed non-producing (PDNP) reserves increased approximately 0.1 MMBOE to approximately 0.9 MMBOE during the first half of 2008, and proved undeveloped (PUD) reserves increased approximately 1.9 MMBOE to approximately 18.6 MMBOE.

The Company's total proved reserves as of June 30, 2008 increased 15% to 43.8 MMBOE, as compared to 38.0 MMBOE as of December 31, 2007. This 15% increase of approximately 5.8 MMBOE includes reserve additions of 7.2 MMBOE less production run-off of approximately 1.4 MMBOE. The 2008 mid-year proved reserves were 55% PDP, 2% PDNP, and 43% PUD, compared to 2007 year-end proved reserves, which were 54% PDP, 2% PDNP, and 44% PUD. The 2008 mid-year proved reserves by volume were 67% oil and 33% natural gas.

Parallel's Standardized Measure of Discounted Future Net Cash Flows as of June 30, 2008 increased approximately 88% to approximately $1.2 billion, compared to year-end 2007. The NYMEX price per barrel of oil increased from $96.01 to $140.00, and the NYMEX price per Mcf of natural gas increased from $7.46 to $13.16, when comparing December 31, 2007 to June 30, 2008. On July 31, 2008, the NYMEX prices per barrel of oil and Mcf of natural gas were $124.08 and $9.12, respectively.

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