Cypress Energy Inc. Announces Rationalization of Assets, Additions to Management Team.

CALGARY, Alberta--(BUSINESS WIRE)--Oct. 8, 1996--Cypress Energy Inc. (Alberta Stock Exchange: CYZ.A) ("Cypress") is pleased to announce the disposition of certain of the assets acquired from Canadian Jorex Limited ("Jorex") and the addition of several key management positions.

Net of disposition proceeds Cypress has now paid $13.2 million for the majority of the Jorex assets which bring to Cypress the following: -0-

-- A highly focused group of assets establishing at least two new core areas of growth. The acquired assets are primarily an oil and solution gas property in the Thorsby area with significant shut in reserves and an operated gas property in the Brant-Farrow area with further development drilling and optimization potential.

-- A high quality undeveloped land base of 30,000 net acres, 19,000 of which is in the Brant Farrow area.

-- A 3D and 2D seismic database which includes the Brant-Farrow area and overlaps the company's existing exploration prospects in the Randell/Gift area of northern Alberta.

-- Total reserves of 4.0 million barrels of oil equivalent, based on a McDaniel & Associates engineering report, constant price forecast. 2.7 million barrels of oil equivalent are proven and 70 percent of the acquired reserves are natural gas.

-- Estimated 1996 fourth quarter production of 720 barrels of oil equivalent per day. Production is expected to increase to over 1,000 barrels of oil equivalent for 1997 primarily as a result of development and optimization projects which are currently underway.

-- A strong balance sheet with total assets over $14 million and no debt. This financial strength will allow Cypress a Capex program of over $3.0 million in the last quarter of 1996 and at least $5 million in 1997. -0-

Several key management additions will provide Cypress the ability to exploit the growth potential of the Jorex assets as well as the company's existing prospects. The additions are: -0-

-- Gary Peddle, Land Manager, previously Senior Negotiator with a senior independent producer.

-- Rhea Karvonen P. Geol., MSc., Senior Geologist, previously a geologist with an intermediate producer active throughout Alberta.

-- Mike Kabanak P. Eng., Senior Engineer, previously an engineer with an intermediate producer active in northern and central Alberta. -0-

"The Jorex properties combined with the existing exploration and development efforts at Cypress and the new management team provides the foundation for the long term growth and success of Cypress Energy," commented Don Archibald, President and CEO. Cypress is an oil and gas company listed on the Alberta Stock Exchange trading under the symbol "CYZ.A."

CONTACT: Cypress Energy Inc.

Donald F. Archibald, 403/262-8225