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Gold/Mining/Energy : Red Sea Oil Corporation (RSO)
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To: Donald Lickman who wrote (265)1/17/2000 12:18:00 PM
From: Greywolf  Read Replies (1) of 332
 
RED SEA OIL AND LUNDIN OIL IN DISCUSSIONS
REGARDING BUSINESS COMBINATION

January 17, 2000 (RSO - CDNX) ...Red Sea Oil Corporation ("Red Sea") and
Lundin Oil AB ("Lundin") are pleased to announce that they are in
discussions regarding a business combination of Red Sea and Lundin.

The Board of Directors of Lundin and Red Sea have agreed to proceed in
principle with a business combination, subject to mutually agreeable terms,
which will most likely involve the offer to Red Sea shareholders of newly
issued shares in Lundin.

Lundin currently owns 58% of the outstanding shares in Red Sea. Red Sea has
a 60% interest in and is the operator of Area NC177 in Libya, including the
undeveloped En Naga North and West oil field. Lundin has a 40% interest in
Area NC177.

Lundin shares are quoted on the Stockholm Stock Exchange and the NASDAQ
market and the Red Sea shares are quoted on the Canadian Venture Exchange.

The transaction would constitute a "related party transaction" in accordance
with applicable Canadian securities legislation. Accordingly, an
independent committee of the Board of Directors of Red Sea has been formed
in order to assess the fairness of any offer to those shareholders other
than Lundin and other insiders. The committee will appoint an independent
third party in order to assist it in reviewing any potential offer and who
will prepare appropriate valuations on Lundin and Red Sea as part of its
mandate.

Red Sea and Lundin expect to be in a position to announce the terms of the
offer by 29 February 2000.

Mr. Ian Lundin, President of Lundin and Red Sea said, "The combination of
Red Sea and Lundin is a logical development, particularly as Lundin already
owns 58% of Red Sea. The greater financial capacity of Lundin to raise
project financing should ensure that the En Naga North development can
proceed".

ON BEHALF OF THE BOARD

"Ian H. Lundin"
President
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