Calgary's Rival Energy and Roseland Resources to Merge

Bringing two Calgary-based E&P rivals together, Roseland Resources Ltd. and Rival Energy Inc. said Monday that they have entered into a merger agreement under which one Rival Energy share will be given for every five Roseland shares.

The merged corporation is to continue under the Rival Energy name with Rival Energy management comprising the senior management of the merged corporation. The combined company is expected to have a five-person board of directors, comprised of two current Rival Energy directors, two current Roseland directors, and a fifth director to be named with the consent of both companies. Both companies' operations are currently focused primarily in Western Canada.

Roseland's first quarter performance yielded an estimated average level of 520 barrels of oil equivalent (6:1), comprised of 350 barrels of oil and 1 MMcf/d. Rival Energy said production revenues of approximately C$2.1 million and cash flow of C$900,000 are estimated for the quarter ended March 31. At the close of the first quarter, Roseland estimates that its debt and working capital deficiency was approximately C$5.8 million.

With the combination of Rival Energy's C$4.8 million of cash and C$925,000 of third party future capital commitments and in consideration of on-going exploration and development expenditures, the merged company will have a minimal level of debt at the end of the second quarter of 2003.

Rival Energy said the merged company will have a "very active" drilling program that will commence shortly after spring break-up, noting that there are currently eight wells planned and the merger entity has good exploitation prospects and several high impact exploration opportunities.

The active exploration lands consist of acreage in Loon Lake, Prairie River and the Peace River Arch areas of Alberta as well as the Suffield area of Saskatchewan. These areas are expected to be drilled as part of the pro forma 2003 exploration budget. Total combined undeveloped acreage is approximately 45,000 net acres, the companies estimated.

Rival Energy currently has approximately 7.4 million common shares, and options to acquire a further 675,000 common shares, outstanding and Roseland currently has approximately 36.1 million common shares, and options to acquire a further 620,000 common shares, outstanding. The merged company will have approximately 14.7 million shares issued and outstanding. The boards of each company have unanimously approved the merger agreement and advised that the deal is in the best interests of their respective shareholders. The merger transaction is subject to approval by the shareholders of both companies and applicable regulatory approvals.

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