Calpine Sells Non-Strategic Canadian Assets

Calpine Corporation has entered into an agreement with NAL Resources on behalf of NAL Oil & Gas Trust and another institutional investor, for the sale of certain non-strategic oil and gas properties for approximately $81 million, or approximately Cdn$125 million. The assets, located in central Alberta, represent approximately 60 billion cubic feet of gas equivalent of net proved reserves, of which approximately 70 percent are oil and liquids. Current net production is approximately 19 million cubic feet of gas equivalent per day. Under the terms of the agreement, approximately 42 percent of the acquisition is subject to rights of first refusal, which expire on September 28, 2002. The balance of the transaction is expected to close on August 30, 2002.

"Calpine remains committed to strengthening liquidity while retaining those assets that will continue to provide long-term value to our shareholders and to Calpine's core power generation business," stated Bob Kelly, Calpine CFO and executive vice president. "While we continue to evaluate opportunities for the sale of other non-strategic assets, Calpine Natural Gas remains an active participant in the North American natural gas and power markets."

The oil properties are located approximately 25 miles west of Red Deer in central Alberta. They include 18,845 developed acres and 9,920 undeveloped acres, with more than 225 producing wells.