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

To: Herb Duncan who wrote (13320)	11/7/1998 7:13:00 AM
From: Herb Duncan	Respond to of 15196

MERGERS-ACQUISITIONS / Gopher Oil & Gas and Scarlet Exploration Enter Into Combination Agreement FOR: GOPHER OIL & GAS COMPANY LTD. ASE SYMBOL: GOF AND SCARLET EXPLORATION INC. ASE SYMBOL: SCO NOVEMBER 6, 1998 CALGARY, ALBERTA--Gopher Oil & Gas Company Ltd. ("Gopher") and Scarlet Exploration Inc. ("Scarlet") today announced that they have entered into a combination agreement (the "Combination Agreement") which contemplates the combination of the businesses of Gopher and Scarlet under the name "Ventus Energy Ltd.". Pursuant to the Combination Agreement it is contemplated that the shareholders of Gopher will receive 1 common share of Ventus for each 4 common shares of Gopher and the shareholders of Scarlet will receive 1 common share of Ventus for each 8 common shares of Scarlet. The Combination Agreement is subject to normal due diligence conditions including certain finance commitments of Ventus, completion of title and environmental reviews, receipt of satisfactory fairness opinion by Scarlet, confirmation of current financial status of Scarlet and Gopher and entering into formal documentation. The Combination Agreement is also subject to regulatory and shareholder approval. It is anticipated that an information circular describing the transaction will be mailed to shareholders of Gopher and Scarlet in November 1998 concurrently with the release of third quarter results by Scarlet. Shareholders owning or controlling approximately 14 percent of the issued and outstanding shares of Scarlet have committed to vote in favour of the transaction. Shareholders owning or controlling approximately 33 percent of the issued and outstanding shares of Gopher have committed to vote in favour of the transaction. Upon completion of this transaction, Ventus will have in excess of 1,500 barrels per day of existing oil production, 80 percent of which is light, sweet, high net back crude production in Northwest Alberta with considerable optimization potential to significantly increase production over the next six months. Gopher's recent acquisition at Peerless Lake, Alberta has a substantial number of development, exploitation and exploration opportunities while Scarlet's Zama/Sousa production potential for both exploration opportunities and continued exploitation utilizing horizontal re-entries to improve production and recovery. Ventus' 1999 capital budget includes a minimum of $5,000,000 to be spent this winter in these two areas. The board of directors of Gopher and Scarlet have unanimously approved the Business Combination and believe that this transaction significantly enhances shareholder value for both companies. Upon completion of the transaction, Kevin A. Bennett will be appointed President of Ventus and the management team of Gopher will assume the management of the company. Ventus will be well positioned for profitable growth as one of Canada's pre-eminent junior oil and gas companies and in the near term will focus on developing its existing assets while continuing to search for strategic acquisition opportunities.