Cimarron and Canadian Pioneer to enter into a business combination.

CALGARY, ALBERTA--(BUSINESS WIRE)--SEPTEMBER 27, 1995--CANADIAN PIONEER ENERGY (TSE:CEQ, OTC(USA):CPEYF) Canadian Pioneer Energy Inc. and Cimarron Petroleum Ltd. today announced that they have entered into an agreement providing for a business combination of the two companies pursuant to which Canadian Pioneer will become a wholly-owned subsidiary of Cimarron.

Under the proposed arrangement Cimarron will issue 850,000 of its common shares to obtain all of the outstanding common shares of Canadian Pioneer. Each shareholder of Canadian Pioneer will therefore receive one Cimarron share for every 32.34 Canadian Pioneer shares held.

At closing, after giving effect to the business combination and Cimarron's recently announced $22 million bought deal, the common shares issued by Cimarron to Canadian Pioneer shareholders will represent approximately 7.8 percent of Cimarron's then outstanding capital. Cimarron will nominate one director selected by Canadian Pioneer to the Board of Cimarron.

The merger is subject to certain regulatory approvals and as well approval by shareholders of Canadian Pioneer at a special meeting which will be held as soon as practicably possible.

This proposed transaction results from a process commenced by Canadian Pioneer in the second quarter of this year whereby an independent committee of directors retained FirstEnergy Capital Corp. as financial advisors to solicit asset dispositions, recapitalizations and merger proposals. Interested parties submitted proposals by September 15, 1995.

After careful review of options available to Canadian Pioneer and taking into account restricted future opportunities for Canadian Pioneer, FirstEnergy recommended the Cimarron proposal and this recommendation has been unanimously approved by the Canadian Pioneer Board of Directors.

Certain major shareholders of Canadian Pioneer holding approximately 34 percent of the outstanding common shares have approved the combination and have entered into binding agreements to vote their shares in favour of the transaction at the shareholder meeting.

If approved, Canadian Pioneer shareholders will receive shares in a well financed and managed intermediate sized Canadian oil and gas company with demonstrable opportunity for future expansion and growth in share value. The resulting company will have production of approximately 60 mmcf/d and 2800 bbls/d of oil and liquids and an undeveloped land base of approximately 300,000 net acres.

CONTACT: Canadian Pioneer Energy Inc.

Barry P. Dorin

President

[phone]

or

Cimarron Petroleum Ltd.

Randy W. Pawliw

President and Chief Executive Officer

or

Kerry Lyons

Vice President

[phone]