TODAY'S INVESTOR FEATURES: Engineering Power Systems Group Inc., By Patricia A. Meding.

NEW YORK--(BUSINESS WIRE)--Oct. 21, 1996

"We have paired M&M Engineering Limited, a company with 28 years of experience in traditional mechanical contracting and metal fabrication, with Atlantic Seaboard Industries Inc., a company on the forefront of alternative power generating solutions. When one considers the tremendous infrastructure projects planned in Newfoundland and its booming offshore development, the pace of growth in conjunction with the need for power in developing countries, Engineering Power Systems Group Inc. is now strategically positioned in its industry for the turn of the century."

John Brake President Engineering Power Systems Group Inc.

In less than six months, Engineering Power Systems Group Inc. (CDN: EPSX $5.375) has positioned itself to be a major participant in eastern Canada's $13 billion Offshore Oil Development Program which is currently taking place off the Grand Banks of Newfoundland where the Company is based. EPSX is a holding company with two strategic areas of focus: designing and developing barge-mounted electrical power facilities and manufacturing infrastructure projects for Atlantic Canada's developing natural resource industries.

Engineering Power Systems Group went "public" through a reverse acquisition, and subsequent amalgamation, in May 1996. EPSX acquired a 51% interest in M&M Engineering Limited (M&M), a 28 year old, internationally known industrial mechanical contracting company based in St. John's, Newfoundland which reported $16.5 million in revenues in 1995. Subsequently, EPSX acquired 77.6% of ASI Holdings (ASIH). These acquisitions also included each of their respective wholly-owned subsidiaries: Atlantic Seaboard Industries Limited (ASIL) and M&M Offshore Limited (Offshore), which are established companies in their own right. (See the diagram at right.)

Consortiums of major companies (Mobil Canada Ltd., Chevron Canada, Chevron Canada Resources Ltd., Petro-Canada, Murphy Oil Co. and Norsk Hydro AS) are beginning development of the oil fields in Hibernia and nearby Terra Nova and White Rose. To give you an idea of how important these oil fields are, Norsk Hydro AS, Norway's largest publicly-owned industrial company, gained its partnership interest this past July from Petro-Canada by swapping a portion of its oil interests in the North Sea for a portion of Petro-Canada's assets in Hibernia; the deal was valued by some experts at $58 to $66 million for the 5% interest alone.

According to The Financial Post, these oil fields are expected to produce upwards of "300,000" barrels of oil a day through the year 2015. Extraction costs "are expected to be US$12.95 a barrel, with transportation costs borne separately. Operating costs alone are pegged at US$4.15 a barrel. Once Hibernia production begins to drop off, the platform is expected to support other developments..." said the July 10, 1996, article which goes on to say that an estimated "$13 billion worth of projects" have already been announced for "both the east and west coast of Newfoundland, as well as Sable Island off Nova Scotia." Newfoundland Service Alliance

On July 1, 1996 EPSX announced its participation in the locally-based, operated and 80% locally-owned Newfoundland Service Alliance (NSA) partnership through M&M Offshore Limited. Incorporated in 1987, Offshore is a respected fabrication company that provides specialized welding services, steel fabrication, pipe spooling and pressure vessel manufacturing to heavy industries and the offshore oil sector. Offshore is also certified and registered to manufacture and repair pressure vessels and a wide range of steel storage tanks, including those for petroleum products.

Other NSA partners include G.J. Cahill 1979 Ltd., a long established electrical installation, repair and maintenance contractor; Mobile Valve Ltd., a valve repair, maintenance and certification company; SEA Systems Ltd., an electrical instrumentation and control design, fabrication, repair and maintenance company; and Westinghouse Canada Inc.'s electrical and mechanical apparatus and equipment repair, overhaul and maintenance division.

NSA has been formed to meet the anticipated onshore equipment repair and overhaul needs of the Hibernia Platform, including the provision of warranty support on behalf of equipment manufacturers. Its goal is to be the leading onshore service provider to the companies and consortiums in the east coast oil and gas sector. NSA's services include: valve repair and certification; overhaul and repair of electrical apparatus and rotating equipment; instrumentation and calibration repair and overhaul of pumps, compressors, turbine and other mechanical equipment; vibration analysis and dynamic balancing; pipe spooling; steel fabrication; and specialized welding. In addition, the alliance partners bring to NSA a broad range of support services through their existing, compatible joint ventures, alliances, and service agreements, thus, creating an exceptional onshore capability to the oil and gas industry. M&M Engineering Limited

Offshore's parent, M&M Engineering Limited (M&M), has been extensively involved with infrastructure projects for 28 years in Newfoundland. M&M offers a wide range of specialized technical and industrial expertise, including the fabrication and installation process for piping, storage tanks and industrial equipment. M&M also contracts for completion of high-pressure and specialized welding processes, as well as boiler and pressure vessel alteration and repair. In addition, M&M has specialized experience in pulp and paper, mining, and oil industry maintenance and construction. The Company has an administrative staff of 16 and access to a team of tradesmen and technicians of more than 1,000, of which almost a third have generally been employed by M&M at any given time.

Another advantage M&M brings to EPSX is the technology license, Manufacturing and Machinery Sale Agreement, that the Company signed with ABB Vetco Gray Canada Inc. (then known as Vetco-Gray Canada, Inc.) for Eastern Canada, including the Eastern Artic, when it purchased the Newfoundland operation of ABB Vetco in 1988. This Agreement is still in effect today. ABB Vetco Gray was recently awarded a multi-billion dollar contract for the production phase of the Hibernia Oil Development Project, and M&M is a participant in that contract.

Another client of M&M is Abitibi Price, which is building a $54 million hydroelectric power plant in Newfoundland to provide electricity to government-owned Newfoundland and Labrador Hydro under a 25-year agreement. (For other contracts, see the Table below.) Atlantic Seaboard Industries Limited

On a similar and complementary front, EPSX's Atlantic Seaboard Industries Limited (ASIL), the wholly-owned subsidiary of ASI Holdings, Inc., designs and manufactures barge-mounted electrical power facilities capable of generating 25 to 250 mega watts. These transportable hydroelectric power facilities are in great demand in developing countries. The generating equipment is installed and integrated into a self-contained and self-sufficient barge complete with fuel storage capacity, (optional) crew accommodations, control rooms, step-up transformers, workshops, barge power, environmental systems and anchoring and mooring systems. An optional reverse osmosis, desalinization water purification component can be added, capable of producing up to 1 million gallons a day of potable water.

ASIL operates from an extensive 147,000 square foot facility on a developed ten-hectare yard with ocean loadout and dockside facilities in Port-aux-Basque on the west side of Newfoundland. The Company is able to provide optimum performance because its facilities are fully covered and equipped to permit the entire construction and outfitting of a 250 mega watt power barge totally indoors, unaffected by climatic conditions. Once built, the barge-mounted power plant is transported by submersible, heavy lift vessels to its permanent site for connection to the host country grid via high-voltage transmission lines which extend from the barge tower to the onshore substation. The Company's location on the Gulf stream gives it year-round access to the major sea routes of the world.

Now under new management, ASIL recently completed a successful turnaround and is negotiating with several countries, including Sri Lanka, India, China, Entrea, Indonesia and the Philippines, for contracts ranging from 50 to 200 mega watt power plants with contract values ranging from $1 million per mega watt of power plant capacity.

ASIL, in association with Major International Power Generating Equipment Manufacturers/Suppliers and JKL (International) Limited, will assemble/build gas turbines, generators, reciprocal diesels, stem turbines, or a combination thereof and include control systems, liquid fuel pumping sets, electronic synchronization, transformation equipment, black start equipment, and all other necessary equipment. The barge can be built in any configuration with dimensions ranging up to 32 meters in width, 152 meters in length and 8 meters in draught. The respective barge can provide fuel storage from 4,500 tonnes to 20,000 tonnes, depending on the overall dimensions. Each barge is fully equipped with bunkering system, bilge systems, fire protection systems, anode system and anchoring and mooring system. Each barge is constructed and classified with Det Norsk Veritas +1AIR4 Barge for Deck Cargo, the regulations of the Canadian Coast Guard, and in full compliance with IMO regulations and requirements.

The Company has memorandums of agreement for projects representing a potential contract value of approximately US$900 million. According to the Company, all projects are listed as having an "excellent" chance of being brought to fruition within anticipated timeframes. The number of concurrent ongoing projects is dependent upon the capacity of existing and new facilities at ASIL. It is most probable that actual construction will begin on one or several of these projects at the beginning of 1997. Therefore, preparation of capital facilities and project team organization at ASIL will have to begin during the Fall of 1996. Recently, the Company entered into an agency agreement with a Bay Street brokerage firm to provide a $3 million private placement.

Engineering Power Systems Group is a company which is in a position to take advantage of the multiple opportunities arising from the megaproject offshore expansion programs taking place right in its backyard.

M&M'S MAJOR CLIENTS

-- Hibernia Oil Development Project -- Abitibi Price-Grand Falls & Stephenville Paper Mills -- Corner Brook Pulp & Paper -- Bowater Mersey Paper Mill -- North Atlantic Refining Ltd. -- Ultramar Canada Ltd. -- Esso Petroleum Ltd.

-- ABB Vetco Gray Ltd. -- Newfoundland Hydro Ltd. -- Deer Lake Power Co., Ltd. -- Newfoundland Power -- Iron Ore Co. of Canada -- Hope Brook Gold Ltd.

EPS Is a Prime Competitor for Work on Major Projects Worldwide

-- ASIL Power Barges

- Sri Lanka $170

- India $200

- China $200

- Palestine $180

- Entrea $140

Potential Barge Mounted Power Plant Projects

The demand for new power generating capacity is growing rapidly. For example, the World Bank estimates that developing countries will need approximately 380,000 mega watts of new generating capacity through the year 2000. The need for such rapid infrastructure expansion, together with the growing preference of traditional lenders for private (as opposed to Government) power projects, has resulted in an increasing number of such countries encouraging foreign and private investment in their energy infrastructures. In many instances, these countries have revised their legislative and regulatory schemes to facilitate such development. Engineering Power Systems Group Inc. believes that this environment has created strong local support for private energy infrastructure projects in a number of developing countries and increased the availability of long-term, multi-lateral, agency and foreign financing of well structured projects. -0-

Editor's Note: For additional information on Engineering Power Systems Group Inc., contact Investor Relations U.S. Toll Free [phone], Canada Toll Free [phone].

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