Challenge Gas Holding AB

Exclusive Asset Management Inc.

Salvatore Fuda

April 15, 2008 17:00 ET

Challenge Gas Holding AB, Exclusive Asset Management Inc. and Salvatore Fuda Respond to Supplemental Mailing From the Management of Echo Energy Canada Inc.

TORONTO, ONTARIO--(Marketwire - April 15, 2008) - Challenge Gas Holding AB, Exclusive Asset Management Inc. and Salvatore Fuda (collectively, the "Concerned Shareholders") announce that they have sent a letter dated today's date to the shareholders of Echo Energy Canada Inc. ("Echo Energy") in connection with their solicitation of proxies to be used at the annual and special meeting (the "Meeting") of shareholders of Echo Energy scheduled to be held on Tuesday, April 22, 2008 at 10:30 a.m. (Toronto time). The Concerned Shareholders are soliciting proxies for the Meeting in support of their efforts to have the Concerned Shareholders' nominees elected to serve as directors of Echo Energy for the ensuing year in place of the seven nominees put forth by management, as the Management Nominees lack the necessary management skills and gas expertise to move Echo Energy forward.

The letter sent by the Concerned Shareholders is in response to a letter dated April 11, 2008 (the "Conn Letter") recently mailed to shareholders of Echo Energy by management led by Gary Conn, the President and Chief Executive Officer and a director of Echo Energy, and four other directors of Echo Energy aligned with Conn (the "Conn Group"). The contents of the Conn Letter demonstrate the continuing efforts of the members of the Conn Group to entrench themselves in their current positions with Echo Energy. The Concerned Shareholders urge shareholders of Echo Energy not to be fooled by this smokescreen from the Conn Group and to vote the BLUE proxy to elect the Concerned Shareholders' nominees for the board of the directors at the Meeting.

The Real Issues

The Conn Letter is another clear example of the Conn Group's strategy of employing a smokescreen in an attempt to distract shareholders from the real issues which are:

- There has been a tremendous loss of shareholder value under the watch of the Conn Group. Since reaching a post-Amalgamation high of $3.25 per share on October 18, 2004, Echo Energy's share price has fallen by approximately 96% to its all-time low of $0.13 on March 5, 2008. The share price has since recovered slightly, closing at $0.17 per share on April 11, 2008, being the last day on which the common shares traded on the TSX Venture Exchange.

- Since 2004, significant gas reserves of Echo Energy have been "disappearing" as estimates of Echo Energy's gas reserves are repeatedly revised downward. Nevertheless, management under Gary Conn's leadership continues to press forward with blinders on, spending money for drilling when serious questions exist as to whether this drilling is economic. The Conn Letter fails to even address the fundamental issue of Echo Energy's "disappearing" gas reserves.

- The members of the Conn Group beneficially own or exercise control or direction over an aggregate of only approximately 1.57% of the issued and outstanding common shares of Echo Energy. In fact, since April 2007, Gary Conn has sold over 40% of his shares of Echo Energy. In contrast, Challenge Gas Holding AB, Exclusive Asset Management Inc. and Salvatore Fuda (collectively, the "Concerned Shareholders") are the largest shareholders in Echo Energy holding in the aggregate 22,567,731 common shares of Echo Energy representing approximately 37.48% of the issued and outstanding common shares of Echo Energy. Clearly, the Concerned Shareholders have a greater interest than the Conn Group in seeing Echo Energy's share price increase.

The Conn Smokescreen

The Conn Letter attempts to blame Salvatore and Joseph Fuda, pointing out that the Fudas have served as directors and officers of Echo Energy. However, what the Conn Letter fails to disclose is that, throughout the relevant periods, Conn was fully responsible for the day to day operations of Echo Energy's gas business. The Fudas' principal area of responsibility was to source financing for Echo Energy which they were very successful in doing.

The Conn Group's smokescreen is also an attempt to distract you from the real issues by making unproven allegations about the acquisition by Challenge Gas Holding AB of 11,016,618 common shares of Echo Energy and the financing of such acquisition. It has always been and continues to be the position of the Concerned Shareholders that these shares were acquired by Challenge Gas Holding AB in compliance with all applicable laws and that the financing for such purpose was also obtained in compliance with all applicable laws (and, in any event, the extent and the manner in which Challenge Gas Holding AB financed the private purchase of these shares is not in any way relevant).

The Conn Letter further attempts to draw attention away from the real issues facing Echo Energy and its shareholders by making reference to other entities in which Salvatore Fuda has an interest or in which he is involved as a director or in management. The Conn Letter includes inaccurate statements concerning the amount of compensation that Salvatore Fuda has received from at least one such entity. To the extent that they are in any way relevant, these references are selective and misleading and do not in any way detract from Salvatore Fuda's over 40 years as a successful businessman in a variety of ventures.

Finally, the Conn Group is continuing its efforts to besmirch the character and integrity of Salvatore Fuda by making reference to inflammatory and prejudicial material concerning allegations of investigations of alleged connections with organized crime elements. However, the facts of the matter are that Salvatore Fuda has never been charged with any crime and has never been involved in any criminal activity of any kind, and a Court has found, based on a review of the records at issue, that "...Salvatore Fuda was not the target or subject of the intelligence gathering".

Need for Change

The need for change and accountability is clear. Shareholders can help ensure that the necessary change takes place by voting the BLUE proxy for the Concerned Shareholders' nominees. Shareholders of Echo Energy who have any questions should call Kingsdale Shareholder Services Inc. at 1-866-879-7649. Shareholders who are outside of North America may call collect at 1-416-867-2272.

About the Meeting

The Meeting is scheduled to be held at the Four Points Sheraton, 1150 Wellington Road South, London, Ontario on Tuesday, April 22, 2008 at 10:30 a.m.

Proxy Voting

Shareholders are reminded to vote the BLUE proxy so that it can be received by no later than 12:00 noon (Toronto time) this Friday, April 18, 2008. Detailed instructions are set forth in the proxy circular dated April 1, 2008 that has been distributed by the Concerned Shareholders to all Echo Energy shareholders and which is available at www.sedar.com.

FOR FURTHER INFORMATION PLEASE CONTACT:

Further information about voting the BLUE proxy is available from Kingsdale Shareholder Services Inc. at 1-866-879-7649. Shareholders who are outside of North America may call collect at 1-416-867-2272.

No securities commission or regulatory authority has approved or disapproved the contents of this press release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Kingsdale Shareholder Services Inc.
    1-866-879-7649