Great Plains Announces Combination with RedStar Oil & Gas

Great Plains Exploration Inc. and RedStar Oil & Gas Inc. have entered into a Pre-Acquisition Agreement, pursuant to which Great Plains will make an offer, subject to certain conditions, to acquire all of the issued and outstanding common shares of RedStar by way of a take-over bid (the "Offer"). Pursuant to the contemplated Offer, Great Plains will acquire all of the RedStar shares in consideration for the issuance of 0.9 Great Plains shares for each RedStar share held. Total consideration offered by Great Plains is expected to be 32.2 million Great Plains shares, effectively representing $0.83 per RedStar share based on a 5-day weighted average price per share of $0.92 for Great Plains, being a 21% premium on the 5-day weighted average price of RedStar on the TSX.

The combination of Great Plains and RedStar will provide both groups of shareholders with ownership in a large, financially stronger entity, with increased liquidity, the opportunity to participate in price appreciation and the ability to take advantage of additional acquisition potential. The exchange ratio was based on the relative Net Asset Values of each company supported by relative cash flow contributions so as to provide all shareholders with representative ownership in Great Plains. RedStar's assets will balance Great Plains' high impact oil-weighted exploration in West Central Alberta, by bringing a new gas-weighted focus area in north-east B.C. which provides production, development potential and a hedge against the proposed Alberta New Royalty Framework.

Great Plains will acquire approximately 1,000 BOE/d (100% gas), approximately 2.6 MMBOE of proven plus probable reserves (based on RedStar's draft year end engineering report), a proprietary 3D seismic database with a market value of approximately $18 million and 153,000 net acres of undeveloped land, valued at approximately $5 million.

Stephen Gibson, President and CEO of Great Plains stated, "The proposed combination of these two companies will create a growth-oriented vehicle with a strong balance sheet, managed by a team and board of seasoned professionals, with a focused program and a larger production base thereby able to attract greater interest from the capital markets."

Chester Krala, President and CEO of RedStar stated, "The combined entity's larger production and cash flow base will allow shareholders to benefit in the accelerated capture of both companies' future potential."

Each of Great Plains and RedStar have agreed to pay a non-completion fee in the amount of $1,500,000 to the other in certain circumstances if the Offer is not completed. Each of Great Plains and RedStar have agreed to terminate any discussions with other parties and agreed not to solicit or initiate discussion or negotiation with any third party with respect to alternate transactions.

Great Plains expects to mail a takeover bid circular to RedStar shareholders by the end of March 2008. Great Plains has appointed Jennings Capital Inc. as advisors on this transaction, and RedStar has appointed GMP Securities LP. The proposed transaction is subject to the approval of the TSX and the RedStar shareholders.


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