Devon Energy to Acquire Anderson Exploration and Become North America's Largest Independent Producer of Oil and Natural Gas.

Business Editors

OKLAHOMA CITY & CALGARY, Alberta--(BUSINESS WIRE)--Sept. 4, 2001

Devon Energy Corporation (AMEX:DVN)(TSE:NSX.) and Anderson Exploration Ltd. (NYSE:AXN) (TSE:AXL.) announced today that the boards of directors of both companies have unanimously approved an acquisition agreement.

Pursuant to the agreement, Devon has agreed to acquire the outstanding common shares of Anderson for C$40.00 (US$25.80)(i) per share in cash. The aggregate value of the offer, including Devon's assumption of approximately US$1.2 billion of debt and other obligations of Anderson, is approximately US$4.6 billion.

In the Anderson transaction, Devon will acquire estimated proved reserves of 532 million barrels of oil equivalent and approximately eight million net undeveloped acres. Devon has allocated $680 million of the aggregate purchase price to Anderson's undeveloped acreage and seismic data.

This agreement follows Devon's August 14, 2001 announcement that it intends to acquire Mitchell Energy & Development Corp. for a total of US$3.5 billion. Upon successful completion of both transactions, Devon will be the largest independent producer of oil and natural gas in North America. Both transactions are expected to close in the fourth quarter of 2001. Devon and Mitchell expect to amend the preliminary joint proxy statement/prospectus that has been filed with the SEC. The amended joint proxy statement/prospectus will include the pro forma effects of the Anderson acquisition. Neither the Mitchell nor the Anderson transactions are conditional upon each other.

"Expanding our presence in Canada has been an important objective for Devon," said J. Larry Nichols, Devon's Chairman, President and CEO. "Anderson was at the top of our list of acquisition opportunities. J. C. Anderson has built an exceptional, gas-weighted production platform with powerful exploration potential. Combining Anderson with our existing Canadian organization firmly establishes Devon in Canada. Following this transaction and our pending acquisition of Mitchell Energy, Devon will be in position to deliver strong production and reserve growth for years to come."

George P. Mitchell, Chairman and CEO of Mitchell Energy & Development Corp., said, "Speaking as someone who looks forward to becoming Devon's largest shareholder, I fully support the acquisition of Anderson. This transaction creates the preeminent North American independent."

Canadian Operations

Devon's Canadian operations are conducted by its wholly-owned subsidiary headquartered in Calgary. Anderson's operations will be merged with Devon's Canadian operations.

John Richels, President and CEO of Devon's Canadian subsidiary, commented, "By combining our existing Canadian staff with Anderson's, we will build one of the strongest workforces in the Canadian oilpatch. We expect a very smooth integration of Anderson's staff and properties and anticipate a great future for Devon in Canada."

J. C. Anderson, Chairman and CEO of Anderson, said, "Our goal has always been to provide the best possible return for our shareholders. Devon's offer reflects the quality of Anderson's people and our outstanding exploration potential. Over the past two years, Anderson has been the most active exploratory driller in Canada. I believe the organization we have created will be in very good hands with Devon."

Impact of the Anderson Transaction

The following comparisons are made relative to Devon assuming the combination with Mitchell had already been completed:

-- Devon expects the acquisition of Anderson to be accretive to reserves per share, production per share and cash margin per share, and dilutive to earnings per share in the near-term.

-- The transaction would increase proved reserves by 35 percent to approximately two billion barrels of oil equivalent. North American reserves would increase to 87 percent of Devon's worldwide reserves. This would give Devon more North American oil and gas reserves than any other independent oil and gas producer.

-- North American gas production would increase from 1.6 billion cubic feet per day to 2.2 billion cubic feet per day. This would make Devon the largest independent producer of natural gas in North America.

-- North American liquids production would increase from 125 thousand barrels per day to approximately 180 thousand barrels per day. This would make Devon the largest independent producer of oil and natural gas liquids in North America.

-- The Anderson properties would complement Devon's existing Canadian asset base in the Peace River Arch, Foothills and Northern Plains areas. Canadian reserves would increase to 32 percent of the total company.

-- Anderson holds eight million net undeveloped acres in Canada. This includes six million acres in the Western Canadian Sedimentary Basin. It also includes two million acres in northern Canada with holdings in the Northwest Territories, the Yukon, the Mackenzie Delta and the Beaufort Sea. These frontier regions are believed to hold some of the largest remaining undeveloped oil and gas deposits in North America.

Financing

Devon has arranged to finance the purchase of Anderson, and the cash portion of the acquisition of Mitchell, with a five-year amortizing loan facility of approximately US$6 billion. Devon also expects to issue long-term debt. The proceeds of the long-term debt offering would be used to prepay the first two to three years of amortization of the five-year loan facility. Devon also announced that it has suspended its share repurchase program.

Major Terms and Conditions

Under the terms of the agreement, a subsidiary of Devon will offer to purchase all the outstanding common shares of Anderson for C$40.00 (US$25.80)(i) per share in cash. Anderson's board of directors has unanimously voted to recommend that all Anderson shareholders tender their shares. The tender offer is contingent upon receiving at least two-thirds of Anderson's outstanding shares and other usual conditions. Upon the expiration of the tender offer, Devon intends to acquire the balance of Anderson's shares by compulsory acquisition or a second step transaction for the same cash price as the tender offer.

Both Devon's and Anderson's financial advisors have rendered opinions concerning the transaction. The advisors have determined that the offer is fair, from a financial point of view, to the shareholders of Devon and Anderson, respectively.

The acquisition agreement provides that Anderson will pay Devon a non-completion fee of C$210 million (US$135 million)(i) in certain circumstances. Anderson has agreed not to solicit further offers and has reserved the right to respond to a superior proposal, should one be forthcoming.

Other Terms and Conditions

The transaction is subject to U.S. and Canadian regulatory approvals and other customary closing conditions. The offering circular associated with the transaction is expected to be mailed to Anderson's shareholders as soon as practicable. The offer will expire 35 days thereafter. Completion of the transaction is expected in the fourth quarter of 2001. Anderson has agreed to waive the application of its shareholders' rights plan to Devon's offer.

Conference Call and Investor Presentation

Devon will discuss this transaction in a conference call webcast today. The conference call webcast will begin at 8:00 am Central Time (9:00 am Eastern Time). The webcast may be accessed from Devon's homepage at www.dvn.com. Devon will also host a meeting of investors and analysts at 11:00 am Central Time (12:00 pm Eastern Time). That webcast may also be accessed on Devon's homepage at www.dvn.com.

Anderson Exploration Ltd. is a Calgary-based independent senior oil and natural gas producer engaged in exploration, acquisition, development and production in western and northern Canada. It trades on both The Toronto Stock Exchange (TSE:AXL) and the New York Stock Exchange (NYSE:AXN).

Devon Energy Corporation is an independent energy company engaged in oil and gas exploration, production and property acquisitions. Devon ranks among the top five U.S.-based independent oil and gas producers and is included in the S&P 500 Index. Shares of Devon Energy Corporation trade on the American Stock Exchange under the symbol DVN. Devon's exchangeable shares (resulting from Northstar, Devon's wholly-owned Canadian operating unit) trade on The Toronto Stock Exchange under the symbol NSX.

FORWARD-LOOKING STATEMENTS

This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission. Such statements are those concerning the contemplated transaction and strategic plans, expectations and objectives for future operations. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the companies expect, believe or anticipate will or may occur in the future are forward-looking statements. This includes completion of the proposed transaction, realization of expected synergies from the transaction, reserve estimates, future commodity prices, future financial performance, future equity issuance and other matters. These statements are based on certain assumptions made by the companies based on their experience and perception of historical trends, current conditions, expected future developments and other factors they believe are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the companies. Statements regarding future production are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, inflation or lack of availability of goods and services, environmental risks, drilling risks and regulatory changes. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements.

NOTICE TO INVESTORS CONCERNING DEVON'S PLANS TO ACQUIRE MITCHELL ENERGY

Investors and security holders are advised to read the definitive joint proxy statement/ prospectus that will be included in the Registration Statement on Form S-4 filed with the Securities and Exchange Commission in connection with the proposed transaction because it will contain important information. A preliminary joint proxy statement/prospectus, which will be amended, has been filed with the SEC by Devon and Mitchell. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus and other documents filed by Devon and Mitchell with the SEC at the SEC's web site at www.sec.gov. The definitive joint proxy statement/prospectus and such other documents (relating to Devon) may also be obtained for free from Devon when they become available by directing such request to: Devon Energy Corporation, 20 North Broadway, Suite 1500, Oklahoma City, Oklahoma 73102-8260, Attention: Investor Relations, telephone: [phone], e-mail: [e-mail]. The definitive joint proxy statement/prospectus and such other documents (relating to Mitchell) may also be obtained for free from Mitchell when they become available by directing such request to: Mitchell Energy & Development Corp., 2001 Timberloch Place, The Woodlands, Texas 77380, Attention: Investor Relations, telephone: [phone], e-mail: [e-mail].

Devon, its directors, executive officers and certain members of management and employees may be considered "participants in the solicitation" of proxies from Devon's shareholders in connection with the transaction. Information regarding such persons and a description of their interests in the transaction is contained in Devon's Proxy Statements and Annual Reports on Form 10-K filed with the SEC. Additional information regarding the interests of those persons may be obtained by reading the definitive proxy statement/prospectus when it becomes available.

Mitchell, its directors, executive officers and certain members of management and employees may be considered "participants in the solicitation" of proxies from Mitchell's shareholders in connection with the transaction. Information regarding such persons and a description of their interests in the transaction is contained in Mitchell's Proxy Statements and Annual Reports on Form 10-K filed with the SEC. Additional information regarding the interests of those persons may be obtained by reading the definitive proxy statement/prospectus when it becomes available.

(i) Currency conversion calculated at the rate of .645 U.S. dollar for each Canadian dollar.