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Amber, AEC Agree On Merger Terms

Amber, AEC Agree On Merger Terms

Amber Energy's board has accepted a revised merger offer from Alberta Energy Co. (AEC) and said it will cease pursuing the sale of 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 agreed to an aggregate limit of 4.5 million shares, which is up from 3 million.

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

The deal increases AEC's gas production 30% and doubles its liquids reserves, according to Morgan.

"We are acquiring the premier heavy oil assets in Canada, with the lowest cost structure. Our 1999 forecast pro forma oil and NGLs production will now increase 42%, compared to 1998 levels, to 85,000 barrels per day. As well, Amber brings another 850,000 net acres of exploration land and tax pools of about $560 million, which will offset current income taxes from the Amber assets for several years," said Morgan.

"This transaction complements our own internal growth opportunities and is part of our strategic growth plan as a leading Canadian oil and gas company. The Amber assets are concentrated, high working interest holdings that overlap principally with AEC's own natural gas operations near Primrose and its oil assets at Pelican Lake in northeastern Alberta," Morgan added.

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

The offer will be open for acceptance by Amber shareholders until Friday, Oct. 23. The offer is conditional on 66 2/3% of Amber's outstanding shares being tendered.

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