Calpine to Sell British Columbia Oil and Gas Properties

Calpine has entered into an agreement with Pengrowth Corporation administrator of Pengrowth Energy Trust, for Pengrowth to acquire substantially all of Calpine's British Columbia oil and gas properties for approximately US$248 million, or approximately Cdn$387.5 million. Of the total consideration, approximately 60% is to be paid in cash, with the remainder to be paid through the purchase in the open market and tendering of Calpine debt securities by Pengrowth. The assets represent approximately 171 billion cubic feet of gas equivalent proved reserves (net of royalties), 48 percent of which are oil and liquids. Calpine retains a call on future purchases of oil and gas production from these assets. The transaction is effective July 1, 2002 and is scheduled to close on or about October 1, 2002.

"This divestiture further enhances Calpine's liquidity and financial strength," stated Calpine's CFO and executive vice president Bob Kelly. "It also is consistent with Calpine's strategy of increasing our cash position while retaining the long-term value of our core power generation business and provides an important call on gas produced by these assets."

The British Columbia assets represent approximately 167,000 net developed acres and 380,000 net undeveloped acres of petroleum and natural gas rights. Current production from these assets is approximately 75.2 million cubic feet of gas equivalent per day (net of royalties).