FCP Terminates JV Discussions with Repsol

First Calgary Petroleums has terminated joint venture discussions with Repsol Exploration Argelia S.A. and decided that it is in shareholders' best interests that FCP independently further explore and appraise its Algerian assets with a target of at least doubling the current level of 2P reserves over the next 18 months. Alongside its drilling program, FCP also intends to move towards the commercial development of the MLE field in Block 405b in accordance with the terms of the production sharing contract ("PSC").

To facilitate implementation of its independent appraisal and development strategy, FCP announces a bought deal financing at a price of CDN$8.10 per common share for gross proceeds of approximately US$80 million (CDN$100 million ) with an underwriter's option to acquire additional securities for additional gross proceeds of up to US$30 million (CDN$37 million) (the "Offering").

Termination of Joint Venture Discussions with Repsol

On October 29, 2004 FCP announced the appointment of financial advisers to assist it in seeking and evaluating strategic alternatives regarding the development of its Algerian assets ranging from outright sale, strategic partnership and capital market opportunities. As a result of this process FCP received a number of proposals on Block 405b ranging from an outright purchase offer to joint venture partnerships.

FCP announced on May 24th that it had decided to focus on formal discussions with Repsol Exploration Argelia, S.A regarding a possible joint venture. After intensive discussions over the past three weeks, the lack of certainty and commitment on development plans and timeframe prevented the FCP Board from recommending this proposal to shareholders. FCP has therefore decided to further explore and appraise its Algerian asset base on an independent basis.

Bought Deal Financing

FCP has entered into an agreement with Canaccord Capital Corporation pursuant to which Canaccord has agreed to purchase for resale to the public, on a bought deal basis, 12,300,000 common shares of FCP (the "Common Shares") at a price of CDN$8.10 per common share (the "Issue Price"), resulting in gross proceeds of approximately US$80 million (CDN$100 million). The terms of the Offering provide for an option (the "Underwriter's Option") pursuant to which Canaccord may purchase up to an additional 4,625,000 Common Shares at the Issue Price. If the Underwriters' Option is fully exercised, gross proceeds raised pursuant to the Offering including the Underwriters' Option will be approximately US$110 million (CDN$137 million). The Common Shares have not been and will not be registered under the United States Securities Act and may not be offered or sold in the United States except in transactions exempt from the registration requirements of that Act.

The transaction is subject to certain conditions including normal regulatory approvals. The Common Shares will be offered in certain provinces of Canada by way of a short form prospectus and on a private placement basis elsewhere including in the United Kingdom. Closing is anticipated to occur on or about June 30, 2005.

Net proceeds of the Offering will be used to implement the Company's independent exploration and appraisal strategy as discussed more fully above in respect of its Algerian assets over the short to medium term and for working capital purposes.

Planned Operations

Over the next 18 months a total of 11 wells are planned. The objective of the forward drilling program is to at least double the current level of 2P reserves.

In addition to its drilling program, FCP also intends to move ahead simultaneously with the commercial development of the MLE field in Block 405b in accordance with the terms of the PSC.

Richard Anderson, President and CEO, commented: "Our decision to focus on increasing our proven and probable reserves will, we believe, enable us to realize full value for shareholders."