Assure Energy and Quarry Oil & Gas Announce Plan to Combine with Quarry's Enterprise Value Attributed at C$30.0 Million.

CALGARY, Alberta -- Assure Energy, Inc. ("Assure") (OTCBB: ASURF) and Quarry Oil & Gas Ltd. ("Quarry") (TSX Venture: QUC) jointly announce that their respective Boards of Directors have authorized each company to enter into a non binding letter of intent outlining the intention of Assure and Quarry to complete a business combination, on the terms and subject to the conditions set out below.

Proposed Transaction

Assure and Quarry propose to combine the companies to effectively allow Assure to acquire all the issued and outstanding common shares of Quarry which Assure currently does not already own at a deemed approximate price of Cdn$1.16 per Quarry share, subject to adjustments, by way of a business combination. The Cdn$1.16 per share for Quarry reflects an estimated Cdn$30.0 million enterprise value (market capitalization plus assumed debt) for Quarry. The transaction is anticipated to proceed on the basis of issuing to each Quarry shareholder 0.302 common shares of the entity resulting from the business combination for each Quarry share. Assure shareholders will receive one share of the entity resulting from the business combination for each Assure share held. For the purpose of this transaction, it is assumed that Assure's share price is US$3.00. The 10 day average closing price of ASURF as of October 1, 2004 was US$3.00.

The effective issue price of the shares of the entity formed under the business combination to be issued to the Quarry shareholders of Cdn$1.16 per Quarry share is a 70% premium to Quarry's average closing price of Cdn$0.68 derived from the three days that Quarry shares traded during the ten day trading period ending October 1, 2004.

Assure currently owns 7.9 million common shares of Quarry, representing approximately 51% of the issued and outstanding common shares of Quarry. In addition, Assure owns 1,000,000 share purchase warrants in Quarry, each warrant exercisable to purchase once common share of Quarry at a price of Cdn$0.80 until June 30, 2006.

The business combination of Assure and Quarry will allow the Quarry shareholders to participate in the upside of both companies and to be associated with a proven management team. It is anticipated that common shares of the combined entity will trade in the USA on the NASD Bulletin Board and also trade in Canada on the TSX Venture Exchange. The combined entity offers shareholders of both Assure and Quarry a larger company with greater access to capital, increased market liquidity and a stronger balance sheet. Directors of Assure and Quarry believe that the combination of the two companies as contemplated will result in a more productive, more efficient entity from which shareholders of both companies should benefit.

Terms and Conditions

The transaction is anticipated to be structured as an amalgamation, plan of arrangement, or other form of business combination mutually agreed to between Assure and Quarry giving consideration to tax efficiencies, compliance with the applicable security regulations and appropriate corporate laws.

For Quarry, the proposed transaction is a "related party transaction" subject to TSX Venture Exchange Policy 5.9 and OSC Rule 61-501. Haywood Securities Inc., has been engaged as valuator to prepare a valuation consistent with OSC Rule 61-501 of both Quarry and the subject matter of the transaction contemplated. The Quarry shareholders, other than Assure, will be required to approve the transaction under applicable securities and corporate laws at a duly called shareholders meeting.

By mid-October Assure and Quarry intend to enter into a mutually acceptable and definitive agreement to combine the companies under the terms and conditions setout herein.

About Assure

Assure Energy, Inc. is an Alberta, Canada corporation that is principally engaged in the exploration, development and acquisition of petroleum and natural gas located in Canada's Western Sedimentary Basin. Assure operates through its wholly owned subsidiary Assure Oil & Gas Ltd. and its wholly owned subsidiary Westerra 2000 Inc. Assure owns approximately 51% of the issued and outstanding shares of Quarry through Assure Holdings Inc. Assure trades on the OTCBB under the symbol ASURF.

About Quarry

Quarry Oil & Gas Ltd., an Alberta, Canada corporation, is a junior oil and gas company engaged in the exploration and development of petroleum and natural gas properties located in Canada's Western Sedimentary Basin. Quarry's common shares trade on the TSX Venture Exchange under the symbol QUC.

FORWARD-LOOKING STATEMENTS 

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks defined in this document and in statements filed from time to time with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by, or on behalf of, the Company, are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.