Danoil Acquires Coachlight & Updates Recent Activity.

CALGARY, Alberta--(BUSINESS WIRE)--July 2, 1998--Danoil Energy(TSE:DAN.A.) (Alberta Stock Exchange:DAN.A.) DANOIL ENERGY LTD. ("Danoil") (DAN.A:TSE/ASE) and Coachlight Resources Ltd. ("Coachlight") (COO:ASE) are pleased to announce that, effective June 30, 1998, Danoil acquired all of the issued and outstanding Coachlight common shares on the basis of $0.15 in cash and 0.375 of a Danoil common share for each Coachlight Common Share.

The transaction was approved by Coachlight shareholders at Coachlight's annual and special meeting held on June 30, 1998 and received all required regulatory approvals. In connection with the transaction, Coachlight has become a wholly-owned subsidiary of Danoil.

Recent activity has been positive. Danoil has drilled and cased two wells (60 percent and 35 percent interests) in its core area at Judy/Carson Creek. To date only one well has been completed, with gas flowing at rates exceeding 1.5 million cubic feet per day. The second well will be completed in July. As well, Danoil acquired varying interests (18-20 percent working interest) in six wells and increased its working interest in the Carson Creek gas plant. At Chigwell, the Company has drilled and cased one well (70 percent interest) and at west Drumheller, a recent recompletion (50 percent interest) is flowing 140 barrels of oil per day and 500 mcf/d of natural gas.

DANOIL ENERGY LTD. is a Calgary based oil and gas company engaged in the exploration, development and acquisition of both oil and natural gas reserves in Western Canada.

Note to Editors: Neither the Alberta Stock Exchange nor the Toronto Stock Exchange have approved or disapproved the information contained herein.

CONTACT: Danoil Energy Ltd.

Jack C. Lee, 403/261-9010

403/262-6977 (FAX)

[e-mail]

http://www.danoil.com

or

Coachlight Resources Ltd.

Terry Lawrence, 403/269-7155

403/269-2289 (FAX)

or

Coachlight Resources Ltd.

Dario Sodero, 403/269-7155

403/269-2289 (FAX)