Carmanah Results Surge in First Quarter.

CALGARY, Alberta--(BUSINESS WIRE)--May 16, 1996--CARMANAH RESOURCES LTD (TSE:CKM) CARMANAH RESOURCES LTD. Carmanah Resources Ltd. reported significant growth in operating and financial results during the first quarter of 1996. The gains in revenue, cash flow and earnings resulted from higher production levels and improved prices.

Net revenue was $7.2 million for the three-month period ended March 31, 1996, compared to $2.6 million for the same period last year. Cash flow from operations was $3.9 million ($0.20 per share); last year $31 thousand was applied to operations. Earnings were $2.5 million ($0.12 per share) compared to a first-quarter 1995 loss of $485 thousand ($0.03 per share). On a weighted average basis, and after appropriate adjustments to reflect the 1:5 consolidation of its shares in May, 1995, there were 19.9 million Carmanah common shares outstanding during the period in 1996; in 1995, there were 18.0 million shares outstanding.

Capital expenditures during the year-to-date totalled $2.9 million. Most of these expenditures were in Indonesia and included continuing programs at the Camar Field ("Camar") as well as seismic in a new venture area. Preparations continued for the commencement of a multi-well drilling program at Babat-Kukui onshore Sumatra, scheduled for startup in early June. In Canada, two oil wells were completed at Freemont, Saskatchewan.

Net production in 1996 was 3,109 BOPD, an increase of 158 percent over the level of 1,207 BOPD recorded last year. At Camar, production averaged 2,750 net BOPD, compared to 753 BOPD in 1995. Canadian production averaged 359 net BOPD, compared to 454 BOPD in 1995, reflecting the sale of certain Canadian properties during the latter part of 1995. With the new drilling, current Canadian production is again approaching 500 BOPD. The average price received by Carmanah in 1996 improved to $25.61 per barrel, compared to $22.93 in 1995.

Carmanah's strong first quarter establishes the basis for improved financial and operating results for the balance of 1996, underpinned by solid and stable operating results at Camar. An active program in 1996 will involve continuing workover programs at Camar, a 3-D seismic program over the field and a 2-D seismic program over prospective portions of the 750,000-acre Bawean PSC. In conjunction with these programs, two new wells will be drilled at Camar in late-1996. Up to twelve wells are scheduled at Babat-Kukui commencing in early June. The Company also continues to evaluate new opportunities in Indonesia, India and Egypt.

Summary Financial and Operating Results
(Period ended March 31)
                              1996    1995    percent change

Financial

Net revenue, $000            7,246   2,628     +176 percent
Cash flow, $000              3,893     (31)    Inf.
        per share, $          0.20     nil     Inf.
Earnings, $000               2,490    (485)    Inf.
        per share, $          0.12   (0.03)    Inf.
Weighted average
 shares outstanding, 000    19,950  17,952

Operating

Net production, total BOPD   3,109   1,207     +158 percent
        Indonesia            2,750     753     +265 percent
        Canada                 359     454      -21 percent
Average price, $             25.61   22.93      +12 percent

CONTACT: Carmanah Resources Ltd.

Mr. R. A. Gusella, 403/266-4975

403/266-5042 (Fax)

or

Carmanah Resources Ltd.

Mr. A. F. Badwi, 403/266-4975

403/266-5042 (Fax)

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein. REPEATS: New York 212-752-9600 or 800-221-2462; Boston 617-236-4266 or