Allied Oil & Gas Corp. Acquires 942235 Alberta Ltd.

Allied Oil & Gas Corp. has mailed a management information circular to its shareholders in connection with a special meeting of Allied to be held at 10:00 a.m. (Calgary time) on January 28, 2002, at the offices of Bennett Jones LLP to approve a special resolution approving the merger of Allied and 942235 Alberta Ltd., an indirect wholly-owned subsidiary of the City of Medicine Hat.

Following the merger, Amalco will continue to carry on the business of Allied and each Redeemable Preferred Share will be redeemed by Amalco for $2.65 in cash. The net effect of the amalgamation and subsequent redemption of shares is that shareholders of Allied (other than 942235 and dissenting shareholders who comply with the procedures set forth in the Business Corporations Act (Alberta) (the "Act")) will receive $2.65 in cash for each such Allied Common Share held. The redemption of the Redeemable Preferred Shares is expected to occur on or about January 28, 2002.

In accordance with the Act, the Special Resolution must be approved by at least 66 2/3% of the votes cast by the holders of Allied Common Shares present in person or represented by proxy at the special meeting and entitled to vote in respect of the Special Resolution. Pursuant to an offer made by 942235 on October 19, 2001 for all of the outstanding Allied Common Shares on the basis of $2.65 cash for each Allied Common Share, 942235 acquired effective control of Allied and now holds approximately 79.2% of the outstanding Allied Common Shares. 942235 has advised that it will cause all Allied Common Shares owned by it to be voted in favor of the Special Resolution, thereby ensuring that the Special Resolution will be approved. Pursuant to section 184 of the Act, a registered holder of Allied Common Shares may dissent in respect of the Special Resolution. If the amalgamation is completed, dissenting shareholders who comply with the procedures set forth in the Act will be entitled to be paid the fair value of their Allied Common Shares. This right is summarized in Allied's management information circular.

Following the merger it is expected that the Allied Common Shares will be delisted from The Toronto Stock Exchange. In addition, it is anticipated that Allied will apply to the applicable securities regulatory authorities to cease to be a "reporting issuer" or its equivalent under the securities laws of each of the provinces and territories of Canada.


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