Calpine Announces Development of 600-Megawatt Teayawa Energy Center; New Energy Center Represents $275 Million Investment in Torres Martinez Indian Reservation.

Business Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--June 29, 2000

Calpine Corporation (NYSE:CPN), the nation's leading independent power company, today announced that it has secured the rights to develop, build, own and operate a 600-megawatt natural gas-fired electricity generating facility near the town of Thermal in Riverside County, Calif. through a development agreement with Adair International Oil and Gas, Inc. (OTC Bulletin Board: AIGI). The $275 million Teayawa Energy Center will be sited on the Torres Martinez Desert Cahuilla Indians' land through a long-term lease agreement between Calpine and the Torres Martinez.

The proposed Teayawa Energy Center will produce enough electricity to supply approximately 600,000 households, representing a significant contribution towards meeting the reliability needs of the rapidly growing Coachella Valley and Southern California. Construction of the project may begin as soon as mid-2001, with commercial operation beginning in late 2003.

As the power project is located on Native American land, the lead permitting agency under the National Environmental Policy Act is the federal Bureau of Indian Affairs (BIA). Additionally, BIA approval is necessary to ensure that the Teayawa Energy Center appropriately meets the cultural, environmental and economic considerations of the Torres Martinez.

With the proposed power plant, the Torres Martinez are taking a significant step to attract business to the reservation. According to tribal Chairperson Mary Belardo, "The Torres Martinez people have been looking for a long-term economic development alternative to casinos. After investigating several options, we elected to pursue power generation as we feel it best benefits the entire region while bringing a much-needed, long-term source of revenue to our community. Calpine is a company with a proven record of environmental and community responsiveness, and as a leader in their field, Calpine brings credibility to any project they undertake."

The Torres Martinez Desert Cahuilla Indians have inhabited the Coachella Valley from time immemorial. Federally recognized, the Tribe is headquartered at the town of Thermal. Total area of the Reservation is 24,024 acres with a population of 600.

In making the announcement, Calpine Senior Vice President Jake Rudisill stated, "The Teayawa Energy Center is an excellent opportunity for Calpine. We are able to build a mutually beneficial power project that will immediately contribute to the welfare of the Torres Martinez and ensure that the region has access to a reliable supply of clean, affordable electricity."

The Teayawa Energy Center will use two advanced technology 501F combustion turbines, supplied by Siemens-Westinghouse, operated in combined-cycle with a single steam turbine. The plant will be fueled by clean natural gas in conjunction with an advanced emissions control system.

As a result, the facility will be an environmentally responsible source of power that will help address the growing electricity demand throughout Southern California. The output from the Teayawa Energy Center will be sold into California's competitive electric power market, providing the opportunity for farmers, businesses, water districts and other utility customers to benefit from a clean, reliable source of electricity and potential cost savings.

Calpine will manage all aspects of project development for the Teayawa Energy Center, including engineering and design, construction, fuel supply, and power marketing. The project will interconnect with an existing transmission line adjacent to the property.

Adair International is based in Houston, Texas. The company is active in the areas of oil and gas drilling and production and electric power generation both domestic and international. Adair is a publicly traded company listed on the NASDAQ Bulletin Board exchange under the symbol AIGI.OB. For more information about Adair, visit its Website at www.aigionline.com.

Based in San Jose, Calif., Calpine Corporation is dedicated to providing customers with reliable and competitively priced electricity. Calpine is focused on clean, efficient combined-cycle, natural gas-fired generation and is the nation's largest producer of renewable geothermal energy. Calpine has launched the largest power development program in the U.S. To date, the company has a combined interest in approximately 27,900 megawatts of electric generation capacity in operation, under construction and announced development in 25 states and Alberta, Canada. The company was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. For more information about Calpine, visit its website at www.calpine.com.

This news release discusses certain matters that may be considered "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the intent, belief or current expectations of Calpine Corporation (the "Company") and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results such as, but not limited to, (i) changes in government regulations and anticipated deregulation of the electric energy industry; (ii) commercial operations of new plants that may be delayed or prevented because of various development and construction risks, such as a failure to obtain financing and the necessary permits to operate or the failure of third-party contractors to perform their contractual obligations (iii) cost estimates are preliminary and actual cost may be higher than estimated, (iv) the assurance that the Company will develop additional plants, (v) a competitor's development of a lower-cost generating gas-fired power plant, (vi) receipt of regulatory approvals or (vii) the risks associated with marketing and selling power from power plants in the newly competitive energy market. Prospective investors are also referred to the other risks identified from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission.