Canadian 88 Energy Corp. announces record results for first nine months of 1996.

CALGARY, Alberta--(BUSINESS WIRE)--Nov. 25, 1996--Canadian 88 Energy Corp. of Calgary, Alberta is pleased to announce record breaking results for the nine month period ending September 30, 1996 and the following outlook for future growth.

Highlights of the Third Quarter of 1996

- Record levels of production (up 63 percent), revenue (up 96 percent), cash flow (up 129 percent) and earnings (up 566 percent) were recorded during the quarter.

- A major deep foothills natural gas discovery at Waterton. Initial production from the discovery well is expected early in 1997. We are confident that this important discovery confirms the potential for up to 500 Bcf of natural gas reserves in the play.

- Continued excellent horizontal natural gas drilling success in the Olds/Crossfield area of West Central Alberta. Canadian 88 has drilled six horizontal gas wells in this area to date in 1996, with a 100 percent success rate. This success confirms that, as indicated in a recent regional study comparing similar holdings in the area, there is potential for natural gas reserves of 500 to 750 Bcf on Canadian 88's substantial land base at Olds/Crossfield, where we hold over 140 sections of 100 percent owned land.

- Three large 3-D seismic surveys totaling over 475 square miles were initiated, encompassing Canadian 88's undeveloped land base in the Alberta foothills at Waterton, Olds/Crossfield, and Chedderville. These surveys should prove invaluable in enabling us to continue to delineate and exploit the tremendous reserve potential of Canadian 88's large undeveloped landholdings in these three areas. Our 3-D seismic survey at Olds/Crossfield is the largest ever shot in Western Canada, at 350 square miles.

- Our high quality undeveloped Alberta land base continued to expand in the third quarter, to a record level of 390,000 acres (355,000 acres net at an average working interest of 91 percent).

- Canadian 88's drilling results to date in 1996 are indicative of a fifth successive year of exceptionally low finding and onstream costs for new proved reserves. Finding and onstream costs for the four years 1991-1995 were $4.12 per boe of proved reserves and in 1995 were $3.50 per boe of proved reserves. In view of the depth and quality of our exploration and development drilling prospect inventory (in excess of 250 quality locations), in combination with Canadian 88's aggressive deployment of large foothills 3-D seismic surveys and deep gas horizontal drilling technology, we are confident regarding our ability to maintain this industry-leading performance. - The first phase of a $23 million expansion of Canadian 88's 100 percent working interest Olds Gas Plant is scheduled for start up December 1, 1996. This 20 mmcf per day expansion (the first phase of a total proposed expansion of 70 mmcf per day at Olds over the next year) is expected to result in another significant increase in production for Canadian 88 by year end and going into 1997.

Financial

As indicated above, record levels of production, revenue, cash flow and earnings were achieved in the third quarter.

Cash flow in the third quarter was $6.1 million ($0.09/share), up 129 percent from $2.6 million ($0.06/share) during the third quarter of 1995. Cash flow for the nine month period increased 126 percent to $15.6 million ($0.23/share) from $6.9 million ($0.15/share) in 1995. Net earnings increased more than ten-fold to $2.2 million during the nine month period in 1996, compared to $.2 million during 1995.

Production during the third quarter averaged 60.1 mmcf per day, up 69 percent from 35.6 mmcf per day in the 1995 period. Liquids production increased 51 percent to 2409 barrels per day, from 1597 barrels per day in 1995. Natural gas prices improved 21 percent during the quarter to $1.35 CDN per mcf, from $1.12 CDN per mcf during the third quarter of 1995. Liquids prices rose 44 percent in the quarter to $24.01 CDN per barrel from $16.72 CDN during 1995. Canadian 88 is experiencing sharply higher production volumes and commodity prices during the fourth quarter of 1996. Spot natural gas prices in Alberta are currently in excess of $2.60 CDN per mcf, and oil prices currently exceed $30.00 CDN per barrel.

Capital expenditures during the first nine months of 1996 increased to a record level of $55.3 million, an increase of 136 percent from $23.4 million (net of acquisitions of $24.5 million in 1995). Capital expenditures were as follows: $32.9 million for exploration and development activity (1995-$13.2 million), up 149 percent; $14.4 million for pipelines and facilities (1995-$4.1 million), up 249 percent; and $8.0 million towards land acquisitions (1995-$6.1 million), up 31 percent.

During the third quarter, Canadian 88 entered into a $47 million equity issue comprised of nine million shares at a price of $5.20 per share. The oversubscribed issue closed on October 3, 1996. As a result of this issue, together with flow through share receipts totalling $11 million, Canadian 88 boasts one of the strongest balance sheets in the industry. We expect to enter 1997 debt-free, with record levels of cash flow and positive working capital. In addition, $120 million of credit facilities are available and currently unutilized.

Operations & Exploration

Record exploration results continued during the third quarter of 1996. At Waterton, well logs indicate a major natural gas discovery in both the Mississippian Formation and a highly promising interval within the Devonian Formation. Testing is now underway with results expected in December. A 120 square mile 3-D seismic survey encompassing our lands in the area has been shot and is currently being processed. The seismic data interpretation will be of tremendous benefit in highgrading and optimizing our development drilling locations, the first of which is expected to be spudded early in the first quarter of 1997. We expect the Waterton discovery to be a significant development project for Canadian 88, extending into 1998, and involving capital expenditures in excess of $30 million. Average daily production at Waterton from 3 to 5 initial wells could be 50 to 100 mmcf per day within twelve months. Successful well testing should confirm reserve potential from 300 Bcf to up to 500 Bcf.

At Olds/Crossfield Canadian 88 has drilled 6 deep horizontal gas wells to the Wabamum (Devonian) or Mississippian horizons, with a 100 percent success rate. We continue to develop our state of the art deep foothills horizontal gas drilling techniques in this play. Canadian 88's production in the area is currently constrained as we await completion of the first phase of our plant expansion on December 1, 1996. Our expectations at Olds/Crossfield are very positive. Data from the 350 square mile 3-D seismic survey, the ongoing successful application of deep horizontal natural gas drilling technology and the proposed expansion of an additional 70 mmcf per day of Gas Plant inlet capability paves the way for further substantial gains in production and reserves in 1997 and 1998. We remain firmly focused on delineating the indicated reserve potential in this area of 500 to 750 Bcf through our aggressive exploitation activity.

Canadian 88's deep foothills exploration program continues to be active. Our 3800 meter Swan Hills test (50 percent operated working interest) at Cremona is nearing the evaluation stage, with a further rank wildcat to follow early in 1997. A 100 working interest 3900 meter Leduc test at Chedderville, keying off a large 3-D seismic program, will spud immediately upon resolution of a surface issue.

Canadian 88 has recently established a significant exploration presence near Norman Wells, N.W.T., in the Mackenzie River Valley. Our contiguous 100 percent working interest 215,000 acre exploration block is expected to undergo a preliminary seismic evaluation this winter. The play is highly prospective for oil discoveries equal in size to or larger than (on a boe basis) our Waterton success.

Canadian 88's exploration and development drilling activity continues to emphasize quality over quantity, as we remain focused on the reserve-based opportunities presented within our extensive core properties in the foothills of West Central Alberta. Canadian 88 drilled 13 deep foothills wells in our core areas during the first nine months of 1996, with a success ratio of 89 percent. Our total meterage drilled was 37,643 meters, for an average of 2,896 meters per well. During the first nine months of 1996 our industry drilled 10,221 wells. Of these, less than 3 percent (176 development and 112 exploratory) were drilled to depths of between 2,288 meters and 3,049 meters.

Canadian 88 recently canvassed a short list of larger U.S. based exploration and production companies as well as Canadian institutional investors regarding the launching of a substantial exploration joint venture earmarked towards high risk/high reward deep exploration activity. The response has been very positive, and we are now finalizing arrangements for the proposed $150,000,000 "Rocky Mountain Wildcat Fund". Canadian 88 will be the operator of the joint venture. This exciting fund should enable us to accelerate our quest for further significant reserve-based discoveries in Western Canada, with initial wildcat drilling expected to commence by early January 1997.

Outlook

Production, reserves and financial results continue to increase at rapid rates of growth. Our exploration team's efforts have led to one of Western Canada's larger discoveries in this decade. Our inventory of undeveloped exploration land and drilling prospects is large and high quality. Success at Olds continues to exceed our expectations. We have commissioned two of the largest 3-D seismic surveys ever undertaken in Canada and we are at the forefront of industry in deploying deep horizontal gas drilling technology. Commodity prices have improved dramatically, affording us the opportunity to lock-in prices on the large volumes of gas that we brought onstream during the pricing trough of the past two years. Combining these factors with one of the best balance sheets in the industry will allow us to move into the new year on a very positive note.

Detailed financial and operating statistics are as follows. -0-

                    Canadian 88 Energy Corp.
        Third Quarter 1996 Financial and Operating Statistics

                        Three Months Ended   Nine Months Ended
                             Sept 30              Sept 30
                                     Percent             Percent
                                      Change              Change
----------------------------------------------------------------
                         1996     1995         1996    1995
                         ----     ----         ----    ----
FINANCIAL:
(000's except per
 share amount)

Production Revenues   $13,612  $6,942   96  $36,422 $18,794   94
Cash Flow from
 Operations            $6,066  $2,645  129  $15,553  $6,897  126
Net Earnings           $1,033    $155  566   $2,171    $176 1134

PER COMMON SHARE:
Cash Flow from
 Operations             $0.09   $0.06   47    $0.23   $0.15   50
Net Earnings            $0.01   $0.00    -    $0.03   $0.00    -

Average Common Shares
 (000's)               68,921  47,479   45   68,921  47,479   45

OPERATIONS:

 PRODUCTION VOLUMES:
  Oil & NGL's (bbls/d)   2409    1597   51     2033    1330   53
  Natural Gas (mmcf/d)   60.1    35.6   69     54.2    32.9   65
  Sulphur (lt/d)          170      61  179      200      38  426

 SALES PRICES:
  Oil & NGL's ($/bbl)  $24.01  $16.72   44   $22.17  $18.36   21
  Natural Gas ($/mcf)   $1.35   $1.12   21    $1.44   $1.22   18
  Sulphur ($/lt)        $0.00  $17.82    -    $6.66  $16.73  -60


CAPITAL EXPENDITURES (000's):

 Property Acquisition $     - $ 4,746    -  $    -  $24,477    -
 Exploration &
  Development          14,436   3,761  284   32,931  13,206  149
 Plants & Facilities    4,989   1,957  155   14,388   4,123  249
 Land & Lease           4,090   2,956   38    7,954   6,066   31
                      -------  ------       ------- -------
                      $23,515 $13,420  75  $55,273 $47,872   15
                      ------- --------      ------- -------
                      ------- --------      ------- -------

UNDEVELOPED LAND ACREAGE POSITION AT SEPT 30, 1996:

                                  Gross       Net     Average WI
                                  Acres      Acres     (percent)
                                  -----      -----      -------
Western Canada                   390,000    355,000        91
Northwest Territories            215,000    215,000       100
                                 -------    -------       ---
                                 605,000    570,000        94
                                 -------    -------       ---
                                 -------    -------       ---

Canadian 88 Energy Corp. is an independent exploration and production company with shares listed for trading on the Toronto and Alberta Stock Exchanges under the symbol EEE.

The information contained herein has neither been approved nor disapproved by the Toronto and Alberta Stock Exchanges.

CONTACT: Canadian 88 Energy Corp.

Greg Noval, [phone]

[phone] (FAX)

or

Canadian 88 Energy Corp.

Bill Dyment, [phone]

[phone] (FAX)