Crestar Energy Increases Normal Course Issuer Bid.

Business Editors

CALGARY, Alberta--(BUSINESS WIRE)--July 11, 2000

Crestar Energy Inc. ("Crestar") (TSE:CRS.) announced today that the Toronto Stock Exchange has approved an increase to its Normal Course Issuer Bid.

Pursuant to the amended Bid, Crestar may purchase for cancellation an additional 2,500,000 common shares, bringing the total approval in the bid to 5,500,000 common shares. This represents approximately 9.6% of Crestar's public float as of the commencement of the bid on October 15, 1999. The amended Bid expires on October 14, 2000.

Pursuant to the existing Normal Course Issuer Bid, Crestar was authorized to purchase for cancellation up to 3,000,000 common shares. To date, Crestar has purchased and cancelled a total of 2,885,500 common shares at an average price of $19.04. Cumulatively, in two Issuer Bids, Crestar has acquired and cancelled 3,357,500 common shares at an average price of $17.89, since the first quarter of 1999.

The management and board of directors believe that the current market price of Crestar's common shares does not accurately reflect the underlying value of the Company's reserves, production and cash flow. Crestar's enterprise value, per unit of reserves and production, are at a discount to values realized in the property acquisition market and recent corporate transactions. Accordingly, the Company believes that the share repurchase program provides value to shareholders by reducing the number of shares outstanding.

As with the previous bids, purchases under the revised bid will be financed from net income, allowing the Company to continue to improve its debt to cash flow and debt to equity ratios concurrent with improving returns for the remaining common shareholders.

Coincident with the Ecuadorian acquisition announced on July 4, 2000, Crestar has renewed its revolving term loan credit facility at C$510 million (up from C$370 million at year-end 1999). Crestar's estimated debt as at June 30, 2000 (inclusive of the Ecuadorian purchase) was approximately 1.4 times trailing 12-month cash flow and even lower on a prospective basis. Based on current Company forecasts, cash flow is expected to exceed total capital expenditures (including the acquisition) by up to $150 million in 2000.

Crestar Energy is a senior Canadian producer of natural gas, crude oil and natural gas liquids. The Company's shares, which trade on the Toronto Stock Exchanges under the symbol "CRS", are included in the TSE 200 and 300 Composite Indices.

Caution to the Reader

The corporate information contained herein contains forward-looking (forecast) information. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by Crestar at the time of preparation, may be proved to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein and the variations may be material. There is no representation by Crestar that actual results achieved during the forecast period will be the same in whole or in part as those forecast.

This news release is also available on Crestar's website at www.crestar-energy.com.