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Lone Wolf Signs on Acquisition of Zenex Communications, As Zenex Reports Strong 1Q 2000 Earnings.

Business Editors


Lone Wolf Energy Inc. (OTCBB:LWEI) announced today that it signed a binding definitive agreement on May 5, 2000 regarding the acquisition of Zenex Communications, Inc., pending regulatory approval. Terms of the deal include the issuance of 15.55 million shares of the Company's Common Stock. After completion of the transaction, such shares will constitute approximately 48% of the Company's issued and outstanding stock Zenex will become an important independent business unit for LWEI. A switch-based provider, Zenex is tariffed as an interexchange carrier in 48 states and has worldwide terminating access. Zenex was repositioned in 1999 to take advantage of its special strengths in innovative interactive telephone technologies. Zenex has built one of the most stable, proven IVR (Interactive Voice Response) platforms in the industry, which is feature rich and is scalable with tremendous capacity.

"This repositioning of Zenex has been successfully executed, with the first-quarter results for Zenex being very positive," said Marc W. Newman, Lone Wolf's president. "First quarter 2000 revenues for Zenex were $1,295,000, with a net pre-tax income of $224,000. The Zenex long distance minutes per month report for the first-quarter also shows a positive growth rate, with January long distance minutes of 5,381,907 growing in February to 14,885,062 long distance minutes. This was again exceeded in March, which had a total of 17,526,153 long distance minutes."

"Not only does Zenex have a strong and growing cash flow, which will be central to Lone Wolf's calculated growth, it brings sophisticated technology-based communications synergies to the Lone Wolf group of companies. Zenex's creative R&D expertise in developing custom Internet and voice application services, will enable all of our business units to have a fluid, highly effective communications network that will be critical to their growth," stated Mr. Newman.

"Zenex actively creates important customer-centered, interactive telephony-based products in collaborative efforts with our customers, and our reaction time is eminently faster than that found in the industry giants," says Brian Gustas, Zenex's president, who has more than 14 years of communications industry senior management experience. "We're proud of the fact that our strong entrepreneurial culture has allowed Zenex to obtain contracts and relationships that were originally perceived by the clients in question to require the involvement of one of the large telecom companies."

Zenex has worked with a wide range of Fortune 500 companies, major professional sports teams and nationally recognized cause-related organizations. The same preemptive IVR capabilities that have been utilized by Zenex's major advertising-oriented clients now offer creative messaging options for Lone Wolf business units. Unlike most of Zenex's competitors, it can easily and inexpensively change voice prompt messages and features. Most competitive platforms use canned software. When Zenex wants to create custom IVR programs to meet client's marketing objectives, it quickly can -- because it has the knowledge as well as owning the technology and software. Zenex is not a wireless provider.

Lone Wolf held a high-level planning session April 29 -May 1. In addition to Marc W. Newman, president of Lone Wolf, and Douglas Newman, vice president and secretary of Lone Wolf, the group included Timothy Apgood, president of E.P. Distributing, Inc., Salt Lake City, as well as Brian Gustas, president of Zenex Communications, Inc., and Dr. Bobby Boyles, president of Lone Wolf is in the process of acquiring, with final agreements due from the attorneys this week.

Sherri Smith-Gray with Ensynq facilitated the meetings. Ms. Smith-Gray was trained in process design by Chrysler and has held senior planning and training positions with Dollar Rent-a-Car, the Oklahoma Department of Commerce, and Williams Communications. Three other Ensynq principals also attended the meeting.

"I am exceedingly pleased with the results of the sessions," said Marc Newman. "The planning meetings gave us an opportunity to share our vision of Lone Wolf, at the outset, with the individuals who will drive their own business units. It also gave everyone the opportunity to better understand all three business units and how each operation fits with the other units as well as with Lone Wolf. This time together also provided our core management group and our strategic planning partners at Ensynq an opportunity to meet and interact with each other. We explored the goals and objectives for each division for one, two and five year periods. In addition, we began the process of determining the resources that will be needed to accomplish these ambitious goals. With the input we now have, we will build a strategic plan to achieve our common objectives for the benefit of the Company as a whole and to maximize shareholder value."

It was agreed that Lone Wolf will assume a structure found in successful new-style marketing organizations, which will best enable it to grow rapidly while maintaining strategic and fiscal discipline. It will be positioned as a venture marketing organization (VMO), since like venture capitalists they are quick to spot new possibilities and to allocate resources to the best ones. The VMO positioning is a fundamentally different way of organizing companies to exploit opportunity. As a result, VMOs enjoy revenue growth rates that on average are better than those of the competition. The VMO process supports entrepreneurialism. Successful venture marketers divide their companies into smaller and smaller units - an approach that encourages turning to the needs of the customers as quickly as possible.

"A great deal of the time at our planning retreat involved the identification of core values to be integrated into our corporate culture. In addition, we explored a significant number of ways our business units can interact with each other and we are very excited about the strong synergy inherent with these companies. We recognize that after identifying new opportunities worth pursuing, VMOs quickly determine what specialized skills are required and pull together a suitable `dream team.' Lone Wolf is committed to using the `dream team' approach, and from the meeting we have identified several support/needs areas in which our business units can collaborate together," said Mr. Newman.

In the course of the meetings, Ensynq presented its rationale for a new corporate identification package. The group enthusiastically and unanimously accepted the proposed company name, which retains the "Wolf" part of the current name, but strongly positions the Company as a New Economy entity. This new imagery also supports the VMO-positioning model. Ensynq has retained a professional design firm with notable credentials in corporate design to create the new logo. The Company plans on unveiling the image package at a forthcoming shareholders meeting.

Forward-Looking Statements

Statements about the Company's future expectations, including future revenues, earnings and transactions, as well as all other statements in the press release other than historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. Since these statements involve risks and uncertainties and are subject to change at any time, the Company's actual results and other corporate developments could differ materially from that which has been anticipated in such statements.
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Publication:Business Wire
Geographic Code:1USA
Date:May 8, 2000
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