SRI Oil & Gas Ltd., a private Montreal company, agreed withCalgary-based Hornet Oil & Gas Ltd. to acquire all outstandingshares of Hornet in exchange for SRI shares. SRI already owns 11.8%of private company Hornet’s common shares. It is estimated about1,650,000 common shares of SRI will be issued in the event theoffer is successful. The exchange ratio will be based on the netvalue of each entity Dec. 31, 1998.

In a separate deal, SRI agreed to acquire all outstandingsharesof 167654 (sic) Canada Inc, a private oil and gas company whosemain asset is a working interest ranging between 7.5% and 25% inthe Grand Forks oil property operated by Remington Energy Ltd. Itis estimated about 900,000 common shares of SRI will be issued inthe event the offer is successful. The exchange ratio will be basedon the net value of each entity as of Dec. 31, 1998.

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