Burmis Energy Closes Natural Gas Asset Acquisition

Burmis Energy has completed the acquisition of 350 barrels of oil equivalent per day of production and 21,000 net acres of undeveloped land for total consideration of $11.5 million. The acquisition has an effective date of July 1, 2004. Burmis financed the acquisition with its existing and expanded bank credit facilities. The Company's net debt, including working capital, will be approximately $10.5 million in early September when a $3.5 million bought deal financing is closed.

The assets being acquired include an operated natural gas property producing approximately 2.0 million cubic feet per day at Kehiwin in eastern Alberta and an operated light oil property producing 15 barrels per day at Kippen in southeast Saskatchewan. In addition, the acquisition includes 24 sections of undeveloped exploration lands at Peck Lake in western Saskatchewan and approximately 60 kilometers of proprietary two-dimensional seismic.

Burmis has identified several drilling locations targeting natural gas, as well as uphole recompletion candidates to further exploit the principal producing property at Kehiwin. Prior to year-end, the Company plans to drill one well, re-complete one well and undertake a production optimization initiative to enhance production from this property.

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