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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Herb Duncan who wrote (9654)	3/21/1998 12:54:00 AM
From: Kerm Yerman	Respond to of 15196

MERGERS / Midas Resources Ltd. Announces A Merger With Scorpion Energy Inc. MIDAS RESOURCES LTD. TSE SYMBOL: MDS MARCH 20, 1998 CALGARY, ALBERTA--Midas Resources Ltd. ("Midas") announced today that it has agreed to acquire all of the issued and outstanding securities of Scorpion Energy Inc. ("Scorpion"), subject to obtaining all necessary regulatory and shareholder approvals. Pursuant to the proposed business combination, Midas will issue 1.3 Midas shares for each issued and outstanding security of Scorpion. Scorpion presently has 10,816,000 issued and outstanding securities (12,011,500 on a fully diluted basis). If the proposed acquisition is completed, the securityholders of Scorpion would own approximately 70 percent of the combined entity and the management team of Scorpion would take over management of the company. The agreement between Midas and Scorpion is subject to a number of conditions, including the usual due diligence review by both parties, the approval of The Toronto Stock Exchange and approval of the Midas shareholders. At the meeting, Midas shareholders may be asked to approve a name change and a share consolidation. Certain major shareholders of Midas, who represent 36 percent of the fully diluted shares, have agreed to enter into agreements with Scorpion confirming their support for the proposed transaction. Midas and Scorpion have agreed under certain circumstances to pay a break fee to the other party if the business combination is not completed. Scorpion is a private oil and gas company based in Calgary, Alberta. Scorpion commenced operations in June 1997 and has grown rapidly to its current production rate of 700 barrels of oil equivalent per day (BOED) through a strategic combination of acquisitions and drilling. FirstEnergy Capital Corp. has provided financing to the company. Scorpion's management consists of: Leif Snethun, P.Geol., President and Chief Executive Officer; Peter McNichol, P.Eng., Vice President Operations; Errol Stewart, Vice President Land; Tom Collins, P.Geoph., Vice President Exploration; and Barry Olson, P.Eng., Vice President Engineering, who have a total of 85 years of oil and gas experience. Certain major shareholders of Scorpion, who represent 34 percent of the fully diluted securities, have agreed to enter into agreements with Midas confirming their support of the proposed transaction. Operating in all three western provinces, Scorpion, as a 50 percent partner, recently entered into a farmin on 100,000 undeveloped acres in the natural gas prone area of northeastern British Columbia. The farmin includes access to 5,000 kilometres of seismic. The current production of the combined company is 5.93 million cubic feet per day (MMCFD) of natural gas and 465 barrels per day (BOPD) of oil and natural gas liquids, or 1058 BOED. Two gas wells, anticipated to net the combined company 2.2 MMCFD, are expected to be tied in shortly. With a total land base of 104,700 gross (34,900 net) acres, of which 20,289 are net undeveloped acres, the company projects a 1998 capital budget of $8,300,000, of which 90 percent is targeted for natural gas prospects. The independent directors of Scorpion are Bill DeJong and Ken Piercy. B.J. Seaman is currently Advisor to the Board. Ernie Toews will be joining the Board of the combined company. Griffiths McBurney acted as financial advisor to Midas on this transaction.