CARMANAH reports first-quarter results.

CALGARY, ALBERTA--(BUSINESS WIRE)--MAY 25, 1995--CARMANAH RESOURCES (Alberta Stock Exchange:CKM) CARMANAH RESOURCES LTD. announced mixed results for the first quarter ended March 31, 1995.

During the reporting period, revenue surged to $2.63 million, exceeding the level achieved in all of 1994. The dramatic increase reflects both the impact of the commencement of production at the Camar field, offshore Indonesia and an expanded Canadian production base.

Production averaged 1,236 BOPD at an average price of $23.16 per barrel in 1995 compared with only 25 BOPD at an average price of $11.52 during 1994.

However, due primarily to two incidents which occurred at the Camar Field in January and March, 1995, costs also escalated significantly and revenue was curtailed due to extended production shutdowns. In January, 1995 a severe storm resulted in a disconnection of the storage and accommodation tanker ("SAT") and a subsequent 17-day production shutdown.

In March 1995, following completion of Carmanah's first lifting of Camar crude, the SAT damaged production facilities during the re-mooring operation and Camar production was again shut down for a further 27 days. Accordingly, as a result of lower than expected revenue and higher costs, no cash flow was recorded in the first quarter of 1995.

During the third quarter, a single point permanent mooring system will be installed to replace the less efficient temporary four-point spread mooring system currently being utilized for the SAT. This can be accomplished at minimal, if any, incremental cost and will eliminate the need to disconnect the SAT during liftings. It should also better enable the SAT to withstand adverse weather conditions.

Production at Camar was reinstated on March 29, 1995 and has been continuous since that date. Currently there are more than 125,000 barrels in the SAT, and Carmanah has agreed to the sale of a minimum of 150,000 barrels of Camar crude oil with the lifting to occur between June 7-12, 1995. Current production at Camar is approximately 2,400 BOPD and recently has been as high as 2,831 BOPD.

After deducting non-cash charges, Carmanah had a loss of $485,215 for the first quarter of 1995 ($0.01 per common share) compared with a loss of $41,024 (or nil per common share) for the same period in 1994. There were 89,760,583 common shares outstanding at the end of the period.

Carmanah anticipates improved financial and operating results during the balance of 1995. Plans are being finalized to install artificial lift systems at Camar during the summer. This is expected to result in a significant increase in production rates by the fourth quarter, 1995, with a planned exit rate exceeding 4,000 BOPD.

During this period, a sustained deliverability test of the uphole Kujung I gas at Camar will also be conducted with a view to commencement of production and sales in 1996.

At the company's Annual and Special Meeting held in Calgary on Thursday, shareholders approved a 1:5 consolidation of Carmanah's common shares. Trading on this basis should commence shortly, with 18,003,116 shares to be outstanding as at May 25, 1995. -0-

                 SUMMARY FINANCIAL RESULTS
                 -------------------------

                  Three-Month Period Ended
                         March 31

                                1995          1994
                                ----          ----
          Revenue            $2,628,425      $27,582
          Loss               $ (485,215)    $(41,024)
          Loss per share     $     (.01)    $   (.00)

NOTE: Neither The Toronto Stock Exchange nor The Alberta Stock Exchange has approved nor disapproved the contents hereof.

CONTACT: R.A. Gusella/A.F. Badwi, 403/266-4975

403/266-5042 (Fax)