Dusty Mac ''power surge''.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Jan. 25, 1996--The management of Dusty Mac Oil & Gas Ltd. (NASDAQ:DMACF) (VcSE:DM) announced that it has been successful in its endeavors to diversify the asset base and operations of the company into the development of energy-infrastructure projects.

This has been achieved by the company's acquisition, announced Thursday, of a 15 percent equity interest in IPC International Power Corp. (IPC). The company is continuing its negotiations to acquire an additional 3 percent to 5 percent equity interest in IPC.

IPC is a private British Columbia corporation having a 60 percent equity interest in British Columbia Hydro International Power Development Corp. (BCHIL Power). The remaining 40 percent equity interest is held by British Columbia Hydro International Ltd. (BCHIL).

BCHIL is a wholly owned subsidiary of British Columbia Hydro and Power Authority (BC Hydro), a public corporation owned by the government of the province of British Columbia. BC Hydro is the third-largest electric utility in Canada, with assets in excess of $10 billion and annual revenues in excess of $2 billion.

IPC was created by BCHIL in 1995 for the express purpose of participating in the design, construction, maintenance, operation and ownership of electric-power facilities in emerging-market countries.

IPC and BCHIL believe that the demand for energy in many developing countries exceeds the capacity of the existing energy infrastructure in those countries. This is expected to provide many new opportunities for financially attractive infrastructure projects in emerging markets over the next several years, including private power and transmission projects.

The initial project to be undertaken by BCHIL Power is the design, construction and operation of a 117-megawatt multiunit power station near the town of Raiwind, near Lahore, Pakistan. Lahore is Pakistan's second-largest city and is a major industrial center.

The Raiwind Power Station is currently under construction and is expected to be in operation for the fall of 1997. The Raiwind project will be operated under the name Southern Electric Power Co. Ltd. (SEPCOL).

The cost of the Raiwind Power project is estimated at $120 million (U.S.), of which $92 million (U.S.) of nonrecourse project debt has been arranged. The loans have recourse to the assets of the Raiwind project and contain various covenants and restrictions on SEPCOL. The remaining monies for the Raiwind project have been advanced by way of sponsors' equity.

BCHIL Power holds, directly and indirectly, a 33.8 percent interest in the Raiwind Power project. Project cash returns (long- term internal rate of return of the distributable earnings to SEPCOL) are estimated at approximately 23 percent.

IPC will own its interest in power projects through subsidiaries. In the case of the Raiwind Power project, IPC's interest in the Raiwind Power project will initially be held through its equity ownership in BCHIL Power.

SEPCOL, the operating company for the Raiwind Power project, has signed a power-purchase agreement with the Water and Power Development Authority of Pakistan (WAPDA) for the sale and purchase of electrical energy and capacity from the Raiwind Power project. The obligation of WAPDA is guaranteed by the government of Pakistan.

This agreement also provides for undertakings regarding tax concessions, import duties, withholding taxes, currency convertibility and availability, and political force majeure events.

IPC intends to follow a business strategy that will utilize BC Hydro's and BCHIL's engineering and operating expertise and will emphasize a portfolio of project development, as well as seeking to maintain an appropriate balance between dividend-oriented projects and growth-oriented projects.

Thus IPC and BCHIL Power will seek projects with low technical risk in countries that have a higher level of political/economic risk.

Under an agreement among BCHIL, BCHIL Power and IPC, BCHIL has agreed that it will continue to explore and investigate international power opportunities and projects. BCHIL shall, as soon as it and IPC agree, transfer its international projects to BCHIL Power so that development costs will be shared equitably between BCHIL and IPC.

Upon transfer of a project, BCHIL Power shall assume all obligations in connection with the transferred project and shall reimburse BCHIL for all development costs to the date of transfer.

If BCHIL or the Cabinet of the government of British Columbia, as the case may be, decides that BCHIL should not be associated with the project, then BCHIL Power shall transfer all rights to participate in the project to IPC and IPC shall continue the development of the particular project.

In the event that IPC requires either management or technical expertise (or both), IPC shall first offer such opportunity to provide such services to BCHIL at market-value compensation.

There are currently eight projects in Pakistan, India, China, Malaysia and Chile for which BCHIL has signed letters of intent or is actively pursuing, for an aggregate of 1,811 megawatts of capacity. In accordance with its agreement between BCHIL and IPC, BCHIL Power will be given the first right of refusal to participate in these projects.

There can be no assurances that any or all of these projects will in fact reach a developed stage such that they would be transferred to BCHIL Power or to the IPC.

It is the intention of the company to continue to increase its equity ownership and participation in IPC as it raises additional project equity for BCHIL Power, and to also participate in other infrastructure-development opportunities as they arise.

In order to fund its acquisition of its equity interest in IPC, the company has entered into a private placement for 500,000 common shares at a price of $2.375 (U.S.) per share.

Dusty Mac is an aggressive, growing independent Vancouver-based energy enterprise involved primarily in the exploration of oil and gas prospects, and the development of projects, within the United States and the pursuit of opportunities in emerging growth countries.

Through its ownership of IPC and independently, the company will now pursue diversification into the development of energy- infrastructure projects globally.

The company also announced that it has called its annual general meeting for March 29, 1996. -0-

NOTE: The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the accuracy of this news release.

CONTACT: Dusty Mac Oil & Gas Ltd., Vancouver

Gerard Lenoski, 604/683-2568 or 800/444-9348