Kroes Enters Merger Agreement With Vecta

Kroes Energy Inc. and Vecta Energy Corporation, a private Alberta corporation, reported that they have entered into an agreement dated January 28, 2008, whereby Kroes and Vecta will merge, as equals, all of their businesses and operations. The merger will be accomplished by Kroes making a take-over bid for all of the issued and outstanding shares of Vecta. It is expected that the transaction will be a "Fundamental Acquisition" pursuant to TSX Venture Exchange ("the Exchange") Policy 5.3. Vecta is in the process of completing a formal independent geological report, as well as filing relevant Personal Information Forms for new Insiders of Kroes. In the meantime it is anticipated that the Exchange will halt trading in Kroes' shares. A further news release will be issued upon acceptance of the geological report by the Exchange and filing of the PIFs. In addition, Vecta is in the process of preparing audited financial statements which will be released in due course.

As per the Kroes and Vecta agreement, each holder of a Vecta common share will be offered 2.456633 common shares of Kroes and 0.54220918 of one Class 1 Kroes Performance Warrant. In exchange for cancellation of a debenture granted by Vecta, the holder of the debenture will be offered 6,612,500 common shares of Kroes and 5,312,500 Class 2 Kroes Performance Warrants. The Class 1 Performance Warrants and the Class 2 Performance Warrants will be converted into 5,312,500 common shares of Kroes 40 days following closing of the transaction, with the allocation of these additional common shares to be determined by Kroes' share price performance over the 40 day period.

If the take-over bid is successful, Kroes will issue 36,000,000 common shares to the shareholders of Vecta and to the holder of the Vecta debenture. The take-over bid by Kroes and the completion of the merger are subject to the conclusion of a definitive agreement between the parties, finalization of due diligence and regulatory approval.

This transaction is the result of arm's length negotiations between the parties. Prior to these negotiations there existed no relationship between the two parties. There is no finder's fee to be paid.

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