Quest and Tidal agree to "business combination"

Business Wire, Oct 7, 1996

VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--Oct. 7, 1996-- Tidal Quest (TSE, VSE QCC.) Quest Capital Corporation ("Quest") and Tidal Resources Inc. ("Tidal") have agreed in principle to a business combination by way of take-over bid whereby Quest will offer 0.775 Quest common shares for each issued and outstanding Tidal common share.

Quest intends to mail a takeover bid circular to all registered shareholders of Tidal on or before October 31, 1996. Quest's bid will expire 21 days from the date of mailing and will be subject to certain conditions including a minimum tender of 66 2/3 percent of Tidal shares. Tidal has agreed to pay Quest a termination fee of $2.19 million if a third party makes a competing takeover bid which is accepted by Tidal shareholders.

Quest and Tidal estimate that the combined company will have proved reserves of 13.7 million barrels of oil and liquids and 120 BCF of natural gas. Proved and probable reserves will be 21.1 million barrels of oil and liquids, and 161 BCF of natural gas. Combined production at year end is expected to exceed 7,000 BOE per day with an approximate 50/50 split between oil and gas.

The management of the combined company will be operated by Quest's recently appointed Chief Executive Officer and Tidal's existing senior management.

The company will operate in four core areas including: Chinchaga-Cranberry, West Central Alberta, Eastern Alberta and North Dakota. The resulting company will have over 320,000 net acres of undeveloped land and a substantial seismic data base allowing the company to continue to be an active explorer. In addition the company has an extensive portfolio of development opportunities and asset rationalization plans.

Further to a Quest news release dated August 9, 1996, Quest and Epoch Capital Corporation ("Epoch") have agreed to amend the share exchange ratio on its proposed merger to 0.85 Quest share for each Epoch share. In addition, Epoch has agreed not to issue its shareholders rights to purchase approximately 1.3 million shares of its shareholding in Profco Resources Ltd.

On the conclusion of the above transactions, the company will have approximately 65.7 million shares outstanding. The company will, by virtue of its substantial working capital, have the ability to pursue an aggressive exploration and development program.

Newcrest Capital Inc. and Griffiths McBurney & Partners have been retained as financial advisors to Quest and Tidal respectively. The above transactions are subject to all necessary regulatory approvals.

CONTACT: Quest Capital Corporation

Brian E. Bayley,, 604/689-1428

or

Quest Capital Corporation

A. Murray Sinclair, 604/689-1428

or

Tidal Resources Inc.

Paul Wanklyn,, 403/231-1400