Coral Energy Plans Acquisition of Canadian Natural Gas Marketer.

HOUSTON--(BUSINESS WIRE)--Oct. 20, 1997--Coral Energy, L.P., one of North America's largest natural gas marketers, announced today that its affiliate, Coral Energy Canada Inc., has reached an agreement to acquire Cibola Canada Energy Marketing Company. The acquisition is expected to close by October 31, 1997. Terms were not announced.

Cibola Canada currently markets about 250 million cubic feet of natural gas per day to Canadian industrial and commercial end users and also provides a significant supply function, collecting gas from a pool of about 50 Canadian producers.

"The acquisition of Cibola Canada enhances Coral's Canadian presence and provides an expanded platform for growing both its market base and its Canadian supply position," said Murry Gerber, Chief Executive Officer of Coral Energy, L.P.

Cibola Canada currently has offices in Calgary, Alberta, and Kitchener, Ontario. The Calgary office will be combined with Coral Energy Canada's Calgary headquarters. Coral Energy Canada will continue the operation of the Kitchener office and expand its presence in eastern Canada. All Cibola Canada employees will be employed by Coral Energy Canada.

Cibola Canada's success has grown from its ability to meet the needs of both the supplier and end user. "With the addition of Coral's financial strength and expanded package of services, customers can access these new resources while maintaining Cibola's high standards of performance," said David Schaus, President, Cibola Canada.

Coral Energy Canada was formed earlier this year when the natural gas marketing operations of Shell Canada Limited were merged into Coral Energy, L.P. With the acquisition of Cibola Canada, Coral Energy L.P.'s gas marketing volumes will total more than seven billion cubic feet per day (BCFD).

The acquisition of Cibola Canada builds upon Shell Canada's previous relationship with Cibola Canada. In 1993, an alliance was formed in which Cibola Canada managed Shell Canada's industrial sales in eastern Canada. "For many years, we have advised our customers that the emerging continentalization of the gas market will provide significant benefits. Through this step, we will be well positioned to ensure our customers receive these benefits to the fullest extent," said Jim Locke, Executive Vice President, Cibola Canada.

Coral Energy, L.P. is a natural gas, power and financial services company formed in 1995 as a joint venture between Shell Oil Company and Tejas Gas Corporation. Shell Canada indirectly obtained a minority equity ownership in Coral Energy, L.P. in 1997. Coral Energy L.P. is based in Houston with offices in Boston, the San Francisco Bay Area and Calgary. The resources provided by its parent companies include close to 5 BCFD of gas production or gas supplies, more than 7.5 trillion cubic feet of gas reserves, more than 10,600 miles of intrastate pipelines with a throughput capacity of 8 BCFD, more than 300 interconnects with interstate and intrastate pipelines, and natural gas storage of 155 BCF.

CONTACT: Coral Energy Canada Inc., Calgary

Arnold MacBurnie, 403/216-3501

or

Coral Energy, L.P., Houston

Jimmy Fox, 281/544-4849

or

Cibola Canada, Kitchener

Jim Locke, 519/894-9555

or

Cibola Canada, Calgary

David Schaus, 403/261-0088