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

To: Kerm Yerman who wrote (11639)	7/7/1998 4:23:00 PM
From: Kerm Yerman	Respond to of 15196

MERGERS - ACQUISITIONS / Kensington Energy Ltd. Responds to Draig Press Release KENSINGTON ENERGY LTD. ASE SYMBOL: KNN.A KNN.B JULY 7, 1998 CALGARY, ALBERTA--The board of directors of Kensington Energy Ltd. (Kensington") wish to respond to the press release of Draig Energy Ltd. ("Draig") issued on July 6, 1998. At the request of Peters & Co., the Kensington board and Griffiths McBurney & Partners ("Griffiths McBurney") met with representatives of Draig on July 2, 1998. This meeting did nothing to lessen the previously expressed concerns about Draig and its offer to Kensington shareholders: - Management of Draig continues to ignore the underlying value of Kensington. At the July 2 meeting the president of Draig admitted he did not pay any attention to Kensington's increased reserves and reserve value as disclosed in the Directors' Circular of July 19, 1998. - Draig's management acknowledged Kensington's concerns regarding overbooking of reserves at Draig's Chigwell and Hanna properties. - Kensington remains concerned about the ability of Draig to reach its production targets through drilling and the stability of Draig's production. Draig's quoted production was reached with acquisition of over 200 boe/d and the recent tie-in of one horizontal gas well drilled into an existing pool - this well has virtually no production history. - Kensington remains concerned about Draig's debt levels. Draig's debt is above $8 million and will probably be higher by year end. In response to Draig's statement that Kensington has been unable to attract any other bidders, the Kensington board is not actively seeking a merger. In the last several weeks, seventeen companies have approached Kensington or Griffiths McBurney & Partners regarding potential business combinations with Kensington. Any potential business combination of Kensington would take into account the underlying value of the Class A and Class B shares. No action is required by Kensington shareholders wishing to reject the offer. Kensington's Class A Shares and Class B Shares trade on The Alberta Stock Exchange under the symbols KNN.A and KNN.B, respectively. Kerm's note: This release is chained to related Draig Energy release. (click on message number opposite my name)