Amber Energy’s board has accepted a revised merger offer fromAlberta Energy Co. (AEC) and said it will cease pursuing the saleof some of its midstream assets.

AEC last week raised its offer for Amber by 50 cents a share to$7.50, or 0.225 AEC shares for each Amber common share, and agreedto an aggregate limit of 4.5 million shares, which is up from 3million.

Together, the two gas companies hold the largest gas reservebase of any publicly-owned oil and gas company in Canada with 4 Tcfof reserves, and create one of the largest gas producers north ofthe border with about 900 MMcf/d of gas production, said AECPresident and CEO Gwyn Morgan.

The deal increases AEC’s gas production 30% and doubles itsliquids reserves, according to Morgan.

“We are acquiring the premier heavy oil assets in Canada, withthe lowest cost structure. Our 1999 forecast pro forma oil and NGLsproduction will now increase 42%, compared to 1998 levels, to85,000 barrels per day. As well, Amber brings another 850,000 netacres of exploration land and tax pools of about $560 million,which will offset current income taxes from the Amber assets forseveral years,” said Morgan.

“This transaction complements our own internal growthopportunities and is part of our strategic growth plan as a leadingCanadian oil and gas company. The Amber assets are concentrated,high working interest holdings that overlap principally with AEC’sown natural gas operations near Primrose and its oil assets atPelican Lake in northeastern Alberta,” Morgan added.

Amber said its board received oral opinions from FirstEnergyCapital Corp. and Goldman, Sachs &amp Co., that the revised offeris fair from a financial point of view to Amber shareholders.

The offer will be open for acceptance by Amber shareholdersuntil Friday, Oct. 23. The offer is conditional on 66 2/3% ofAmber’s outstanding shares being tendered.

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