Canadian 88 Energy Corp. and Redwood Energy, Ltd. to Drill Large Thrust Sheet Play in Wyoming.

CALGARY, Alberta--(BUSINESS WIRE)--Dec. 14, 1998--(VSE:RWD.) (TSE:EEE.) (Alberta Stock Exchange:EEE.) (AMEX:EEE) Redwood Energy, Ltd. (VSE:RWD) and Canadian 88 Energy (USA), Inc. a wholly owned subsidiary of Canadian 88 Energy Corp. (AMEX:EEE)(TSE:EEE)(ASE:EEE) have entered into an agreement to directionally drill a 14,000 foot Mississippian test on the Windy Point Federal Unit in the Foothills Overthrust Belt of Wyoming's Green River Basin.

"We are very excited to join forces with a partner the calibre of Canadian 88 on this world class exploration prospect. This is a major milestone for Redwood Energy," according to Peter Ffoulkes-Jones, President of Redwood Energy, Ltd.

"Our target reserve potential from the Mississippian Mission Canyon is estimated to be in the 200 to 500 billion cubic feet (BCF) range, which would be a substantial achievement for Redwood Energy, Ltd. The prospect is analogous to a recent large foothills discovery by Canadian 88 in Canada in the Waterton area of southwest Alberta," added Jim Catlin, Vice President Exploration.

The Windy Point Federal Exploration Unit comprises some 7,029 gross acres in the Foothills Overthrust Belt in Lincoln County, Wyoming. The acreage is located approximately 35 miles north of Evanston, Wyoming in a prolific oil and gas producing area. The giant Whitney Canyon/Carter Creek Field, located approximately four miles southeast of the Windy Point Federal Unit boundaries, has estimated natural gas reserves of 5.3 trillion cubic feet (TCF) and 115 million barrels of liquids. The well will be directionally drilled re-entering an existing well (100 percent by Canadian 88) from a surface location in the NESW of Section 10, T19N-R120W. Redwood Energy will be carried for 10.15635 percent of the drilling, completion and equipping of the test well. Future development will be shared 87.5 percent by Canadian 88, 10.15635 percent by Redwood and 2.34365 percent by Legacy Energy Corporation, a private Denver company. A drilling rig has been contracted and is expected on site within 30 days. It is anticipated that it will take 60 days to reach total depth. The well is estimated to cost $US 2.5 to 3.0 million.

Redwood Energy, Ltd. is a junior oil and gas exploration company with interests in Alberta, Canada and Oklahoma and Wyoming in the United States. Canadian 88 Energy Corp. is an independent public oil and gas company with head offices in Calgary, Alberta, Canada.

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