Grey Wolf Announces Swap for Increased Sundre/Caroline Interests.

Business Editors

CALGARY, Alberta--(BUSINESS WIRE)--Sept. 14, 2000

Grey Wolf Exploration Inc. (TSE:GWX.) announced today that it has reached agreement to acquire long-life natural gas producing properties and undeveloped land in the Company's core area of Sundre/Caroline, Alberta.

The transaction will have Grey Wolf swap its shallow natural gas interests in the Redwater, Radway, Thorhild, Newbrook and Abee areas, together with $500 thousand of cash, in exchange for the Sundre/Caroline assets.

As Grey Wolf already owns interests in these properties, this acquisition results in the Company's average working interest increasing from 18% to approximately 44%. Current working interest production from the area increases from one million cubic feet (Mmcf) equivalent per day to six Mmcf equivalent per day of natural gas and associated natural gas liquids.

As a result of this transaction, Grey Wolf receives an average 29% working interest in 45,000 gross acres of land and a 26.7% working interest in a 20 Mmcf per day capacity natural gas processing plant where the Company already owns a 37.3% interest. Grey Wolf also manages additional interests in these properties and the balance of interests in the natural gas plant for its affiliate, Canadian Abraxas Petroleum Limited.

Following the closing of this transaction, the Company will be able to accelerate its multi-well recompletion program for the current year on these properties. With numerous exploitation opportunities on these lands, the Company now has an increased ownership stake in future drilling operations planned for the balance of the year and into 2001.

The swap transaction is expected to close in mid-October subject to a number of normal due diligence conditions, including resolving rights of first refusal on certain lands in the package.

Grey Wolf is a Canadian junior oil and natural gas exploration and production company, which trades on The Toronto Stock Exchange under the ticker symbol "GWX". For further information, please contact Jim Wilson, Senior Vice President & CFO at [phone] or fax [phone].

No stock exchange or securities commission has either approved or disapproved the information contained herein.