NuGas Limited responds to certain misleading statements contained in February 14 press release issued by Co-Maxx Energy Group Inc.

CALGARY, Alberta--(BUSINESS WIRE)--Feb. 15, 1995--NuGas Limited wishes to respond to certain misleading statements contained in the February 14 press release and Directors Circular issued by Co-Maxx Energy Group Inc., dealing with NuGas' offer to Co-Maxx shareholders.

NuGas would prefer that Co-Maxx shareholders be allowed to consider NuGas' offer on its merits and not be involved as spectators in a public "mudslinging" contest between Co-Maxx and NuGas. Unfortunately, due to Co-Maxx's continuous use of the press, releasing erroneous, misleading and potentially damaging comments, NuGas is forced to and will continue to defend itself and clarify any false statements made by Co-Maxx as Co-Maxx continues to attempt to entrench its management team in the face of NuGas' offer.

The past affiliations of NuGas management have always been publicly disclosed and acknowledged. Sulpetro was known, until the industry collapse of the early 1980's, as one of the most successful growth companies in the oil and gas industry. Gerald Hipple, President of Co-Maxx, on the other hand, has not disclosed the act that he is a former officer and director of Abacus Oil and Gas Ltd., a subsidiary of Abacus Cities Ltd. which was formally placed in bankruptcy on April 1, 1981. Furthermore, the quality of NuGas' management did not appear to be an issue in 1992 for Peters & Co. Limited, financial advisor to Co-Maxx, when Peters & Co. repeatedly urged NuGas to engage it as lead underwriter for NuGas' initial public offering.

Co-Maxx and its financial advisor allege that the NuGas offer is significantly less than net asset value of Co-Maxx and is not at a premium to the market. NuGas and its financial advisor reiterate that Co-Maxx has refused to exchange information. Co-Maxx has continuously stated the offer by NuGas is unfair but has not disclosed even to Co-Maxx shareholders any cash flow estimates, net asset value estimates nor the assumptions used to determine its net asset value. In addition, based on the information available, NuGas has received a written fairness opinion from its financial advisor, Goepel Shields & Partners Inc. that the offer is also fair from a financial point of view to the shareholders of Co-Maxx.

Comments about NuGas' exploration results are misleading and do not compare NuGas' results or growth on a consistent basis to that of Co-Maxx. The facts are, in 1994 NuGas did not spend $12 million dollars on exploration. NuGas did spend $7 million dollars on development drilling at its Cessford property to establish production of 5.7 MMCF per day of gas net to NuGas. NuGas also spent an additional $1 million dollars on land for future exploration inventory. The remaining $4 million dollars was spent on exploratory drilling which did establish 9 BCF of probable reserves as outlined in NuGas' take-over bid circular dated February 3, 1995. NuGas has outperformed Co-Maxx on several operating criteria including cash flow per share growth. Also NuGas has full time technical staff whereas Co-Maxx has none.

Since inception in 1988, NuGas expended total capital of approximately $50 million dollars, yielding reserves of 114 BCF at an overall finding and development cost of $0.44/mcf, which compares favourably to other similar oil and gas companies.

Comments about NuGas' land holdings and future outlook are misleading and erroneous. NuGas' undeveloped lands are approximately three times Co-Maxx's when the U.S. lands are included. The U.S. leases are within 50 miles of the Saskatchewan border on geological extensions of producing Canadian trends and provide a solid base for future exploration in a region where other Canadian oil & gas companies are increasing U.S. exposure. Due to NuGas' size, annual available cash flow and full time technical staff, NuGas provides greater opportunities to grow through exploration on its existing land base and is actively pursuing new projects in a time when the industry at large is suffering a downturn.

The assumption that all Co-Maxx shareholders will accept the Cash Option is not reasonable. It seems more likely to assume that certain shareholders of Co-Maxx will choose the share and cash combination option as both NuGas and Co-Maxx trade below their net asset values.

Co-Maxx suggests that since NuGas initiated an issuer bid on September 1, 1994, the market price of NuGas common shares may have been affected. Inasmuch as NuGas felt that its shares traded at a substantial discount to its net asset value and normalized cash flow valuation it has indeed purchased 489,900 of its own shares. Co-Maxx also put in place an issuer bid on February 16, 1994 and has only bought 61,900 of its shares although it also claims its shares are undervalued. The facts are that NuGas has not used its issuer bid since announcing its take-over bid for Co-Maxx on January 30, 1995. However, Co-Maxx has used its issuer bid during this same period over the past three weeks to buy back more than 32,000 of its shares which is 52% of the total bought back for all of 1994 and 1995. Any suggestion by Co-Maxx that the NuGas issuer bid may have affected NuGas' share price must cause Co-Maxx to ponder the effect on the price of Co-Maxx shares of the purchase by NuGas of 1,323,200 shares at prices up to $2.00. Shortly before NuGas' purchase, Co-Maxx traded at prices as low as $1.75.

NuGas has heard that over 130 oil and gas companies have been contacted by Co-Maxx and its advisors to solicit a better offer and that approximately 100 have reviewed the information package. As yet, no one has proposed a better offer, possibly because based on a review of the confidential information they are concluding that NuGas' offer is fair.

As Co-Maxx is not willing to exchange information on a reasonable basis (even though limited interest has been expressed in Co-Maxx by other oil and gas companies) NuGas continues to believe that Co-Maxx is merely trying to entrench its management. NuGas encourages other Co-Maxx Shareholders to ask the following questions of Co- Maxx management: -0-

-- why did Gerald Hipple not previously disclose his "golden

parachute" of 2.5 times annual salary until now? Have there been

any recent changes to his salary that might affect shareholder

value?

-- what standards or precedents were used to establish the large

severance packages recently put in place to Cornett,

Secretary-Treasurer and Schmidt, the Controller; amounts

which might otherwise be available to Co-Maxx common shareholders?

-- If the offer is unfair, what are the estimates of cash flow

for 1995, estimates of net asset value and what assumptions were

used?

-- why is Co-Maxx continuing to refuse a reasonable exchange of

information with NuGas if the management of Co-Maxx truly wishes to

confirm that the NuGas offer is not fair for its shareholders?

CONTACT: NuGas Limited

Peter Malencia, 403/262-7034