Computer Modelling Group Ltd.

Computer Modelling Group Ltd.

May 19, 2006 09:15 ET

Computer Modelling Group Ltd. Adopts Shareholder Rights Plan

CALGARY, ALBERTA--(CCNMatthews - May 19, 2006) - Computer Modelling Group Ltd. (TSX:CMG) ("CMG" or the "Corporation") announced today that its Board of Directors has adopted a Shareholder Rights Plan (the "Plan"), similar to existing shareholder rights plans adopted by other Canadian public companies.

The objectives of the Plan are to ensure, to the extent possible, that all shareholders of the Corporation are treated equally and fairly in connection with any takeover bid for the Corporation. The Plan discourages discriminatory, coercive or unfair takeovers of the Corporation and gives the Board of Directors time if, in the circumstances, the Board of Directors determines it is appropriate to take such time, to pursue alternatives to maximize shareholder value in the event an unsolicited takeover bid is made for all or a portion of the outstanding shares of the Corporation.

In order to implement the adoption of the Plan, the Board of Directors of the Corporation authorized the issuance of one right in respect of each share of the Corporation outstanding at the close of business on May 18, 2006 (the "Record Time"). In addition, the Board authorized the issuance of one Right in respect of each additional share issued after the Record Time. Initially, the rights trade with and are represented by CMG's common share certificates and non-voting share certificates, including certificates issued prior to the Record Time. Until such time as the rights separate from the shares and become exercisable, rights certificates will not be distributed to shareholders.

If a person, or a group acting in concert, acquires (other than pursuant to an exemption available under the Plan) beneficial ownership of 20% or more of the Common Shares of the Corporation, rights (other than those held by such acquiring persons which will become void) will separate from the shares and permit the holder thereof to purchase Common Shares at a 50% discount to their market price. A person, or a group acting in concert, who is the beneficial owner of 20% or more of outstanding Shares as of the Record Time is exempt from the dilutive effects of the Plan provided such person (or persons) does not increase its beneficial ownership by more than 1% (other than in accordance with the terms of the Plan). At any time prior to the rights becoming exercisable, the Board of Directors may waive the operation of the Plan with respect to certain events before they occur.

The issuance of the rights is not dilutive and will not affect reported earnings or cash flow per share until the rights separate from the underlying Shares and become exercisable or until the exercise of the rights. The issuance of the rights will not change the manner in which shareholders currently trade their Common Shares.

The Plan is subject to subject to approval of the Toronto Stock Exchange, and requires confirmation by CMG shareholders by November 18, 2006. CMG intends to present the Plan for approval by its shareholders at its annual meeting to be held on July 13, 2006. If the Plan is not confirmed by shareholders, the Plan and all outstanding rights will terminate and be void and of no further force and effect.

The Plan is not being proposed in response to, or in anticipation of, any pending, threatened or proposed acquisition or takeover bid. The Board of Directors did not adopt the Plan to prevent a takeover of the Corporation, to secure the continuance of management or the directors in their respective offices or to deter fair offers for the Common Shares of the Corporation.

Computer Modelling Group Ltd. is a computer software technology and consulting company serving the oil and gas industry. CMG has sales and technical support services based in Calgary, Houston, London and Caracas. CMG is the leading supplier of advanced processes reservoir modelling software in the world with a blue chip client base of international oil companies and research centres in 44 countries. CMG's common shares are listed on the Toronto Stock Exchange and trade under the symbol CMG. For more information, please visit CMG's web site at

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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