Canadian 88 Value Maximization Process Update.

Business Editors

CALGARY, Alberta--(BUSINESS WIRE)--May 9, 2001

The shareholder value maximization process was instituted on October 10, 2000 and involved the appointment of a Special Committee of the Board.

The Board of Directors engaged CIBC World Markets and Credit Suisse First Boston to advise the company on strategic alternatives and, ultimately, to solicit potential buyers for the Company and its assets. During this process, there was significant response from potential buyers indicating that Canadian 88(TSE:EEE.) (AMEX:EEE) would realize maximum value for shareholders by selling its Waterton and Caroline assets separately and making the pro forma Company available to potential corporate buyers. Subsequently, on February 27, 2001, Canadian 88 announced an agreement to sell its interests in Waterton and Caroline to Hunt Oil for proceeds of Cdn. $176 million. This transaction closed on April 27, 2001.

In the announcement of the sale agreement, Canadian 88 acknowledged that Canadian Superior had a right of first refusal on the Waterton assets. Canadian 88 provided information on these assets to Canadian Superior and invited its representatives to attend the data room, with access to Canadian 88 employees, in a process identical to the process that Hunt Oil and numerous other parties completed. Nonetheless, Canadian Superior chose not to attend the data room or exercise its right of first refusal on those assets.

Canadian Superior has recently initiated two legal actions against Canadian 88, one concerning the Waterton lands; another concerning the Blackstone lands. The Company believes that both are without merit and has filed Statements of Defence in both actions that fully answer Canadian Superior's allegations.

In the eight weeks prior to Canadian 88's receipt of Canadian Superior's merger proposal, the Special Committee unsuccessfully attempted to resolve these matters.

These litigious actions have become an issue for potential corporate buyers and, in the opinion of the Board, have so far prevented the Company from completing negotiations to sell Canadian 88 to any of the parties that would have made cash proposals to acquire the Company. Canadian 88 is continuing with an orderly, competitive process designed to maximize shareholder value and is pursuing credible proposals to realize value for shareholders. Canadian 88 will keep its shareholders apprised of this process.

On behalf of the Board, Chairman James D. Raymond has congratulated CEO Joe Pritchett and his management team and all Canadian 88 employees for their achievements over the past difficult year. Since March 2000, under this leadership Canadian 88 has eliminated the fixed-price gas hedges that crippled cash flow in 2000, reduced net debt from approximately Cdn. $220 million to approximately Cdn. $30 million, and enhanced the Company to the point where it is today both actively exploring and generating significant positive cash flow. Since the announcement that the current management team would assume control of Canadian 88 on March 20, 2000, Canadian 88 stock has appreciated 86% versus 51% for the TSE Oil & Gas Index.

Canadian 88 Energy Corp. (EEE) is an independent public oil and gas company with its head office in Calgary, Alberta, Canada. The shares of Canadian 88 Energy Corp. are traded on the Toronto and American Stock Exchanges.

The information contained herein has neither been approved nor disapproved by the respective Exchanges.