Enterra Energy Trust

Enterra Energy Trust

February 25, 2005 08:45 ET

Enterra Energy Trust, U.S. Energy Corp. and Rocky Mountain Gas, Inc. Announce Acquisition Merger; Merger Valued at Approximately $33.5 Million


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: ENTERRA ENERGY TRUST

NASDAQ SYMBOL: EENC
TSX VENTURE SYMBOL: ENT.UN

FEBRUARY 25, 2005 - 08:45 ET

Enterra Energy Trust, U.S. Energy Corp. and Rocky
Mountain Gas, Inc. Announce Acquisition Merger; Merger
Valued at Approximately $33.5 Million

CALGARY, Alberta & RIVERTON, Wyo.--(CCNMatthews - Feb 25, 2005) -

Enterra Energy Trust:

-- This Notice Does Not Constitute an Offer of Any Securities for Sale

-- Enterra Also Announces Release Date of 2004 Financial Statements

Enterra Energy Trust ("Enterra") (NASDAQ: EENC; TSX: ENT.UN), U.S.
Energy Corp. ("USE") (NASDAQ: (Small Cap) USEG) and Rocky Mountain Gas,
Inc. ("RMG") today announced that they, together with USE affiliate
Crested Corp. ("Crested") (OTCBB: CBAG) have entered into a letter of
intent for the acquisition of RMG by Enterra pursuant to a merger under
Wyoming law. USE and Crested jointly own approximately 92.7% of RMG,
and, as signatories to the letter of intent, have agreed to vote their
RMG shares in support of the merger. Completion of the merger, which is
expected to close by May 1, 2005, is subject to approval of RMG's
shareholders and regulatory and stock exchange approvals, as well as the
satisfaction of a number of certain conditions, precedent, including
Enterra's completion of due diligence with respect to RMG with
satisfactory results and the parties entering into a mutually agreeable
definitive pre-acquisition agreement. All dollar amounts in this release
are in U.S. dollars.

RMG holds natural gas assets in Montana and Wyoming. A portion of the
Wyoming assets currently generates net/net production of approximately
2.2 million BTU's per day. RMG has approximately 130,000 net acres of
production rights to coalbed methane. RMG also owns approximately 17% of
Pinnacle Gas Resources, Inc, a private coalbed methane exploration and
production company. Under the terms of the letter of intent, for a
transition period of up to 12 months following the merger, USE will
continue to provide personnel and advice to RMG under a consulting
contract.

The value of the merger is approximately $33.5 million. If the merger is
approved, Enterra will pay the shareholders of RMG $30 million, by the
issuance of approximately $20 million in exchangeable shares of Enterra
Energy Corp. and approximately $10 million cash, plus will acquire RMG
with outstanding long-term debt of approximately $3.5 million. The newly
issued shares issued to RMG holders will be exchangeable on a
one-for-one basis for Enterra trust units 12 months after the completion
of the merger. The cash portion of the consideration may be paid by
nominees of Enterra.

"We believe that RMG's assets will be a good fit and beneficial to
Enterra's assets and business plan," stated Reg J. Greenslade, President
and CEO of Enterra.

Mark J. Larsen, President of Rocky Mountain Gas, Inc. said, "The merger
of Rocky Mountain Gas into Enterra makes good business sense for the RMG
shareholders. U.S. Energy Corp., our largest shareholder, will remain in
the gas business through its equity ownership in a larger, well-
managed, well-financed oil and gas company that has substantial
producing assets. Upon completion of the merger, RMG management looks
forward to devoting their efforts towards the marketing and development
of USE's significant interests in other natural resources, all of which
are trading at "multi-year highs."

"Safe Harbor" statement under the Private Securities Litigation Reform
Act of 1995: This news release contains forward-looking statements that
are subject to risk and uncertainties, including, but not limited to,
the impact of competitive services, demand for services like those
provided by the company and market acceptance risks, fluctuations in
operating results, cyclical market pressures on the oil and natural gas
industry and other risks detailed from time to time in the company's
filings with Securities and Exchange Commission. Neither Enterra Energy
Trust, U.S. Energy Corp. nor Rocky Mountain Gas, Inc. undertakes any
obligation to update or revise any forward-looking statements whether as
a result of new developments or otherwise.

Enterra Energy Trust To Report Financial Results and Conduct Conference
Call

Separately, Enterra announced that it will issue its financial results
for the fourth quarter ended December 31, 2004 on Thursday, March 24,
2005, prior to the opening of the stock market. Management will also
host a conference call later that morning at 11:00 am Eastern Time/9:00
am Mountain Time, to discuss these results, recent corporate news and
the outlook for the Trust. Interested parties may participate in the
call by dialing 706-679-3057. Please call in 10 minutes before the
conference is scheduled to begin and ask for the Enterra Energy
conference call. After opening remarks, there will be a question and
answer period; questions may be e-mailed in advance to
llatman@equityny.com.

This conference call will be webcast live over the Internet on the
homepage of the Trust's website at www.enterraenergy.com. To listen to
the live call, please go to Enterra Energy's website at least 15 minutes
early to register, and if necessary, download and install any audio
software. If you are unable to listen live, the conference call will be
archived and can be accessed for approximately 90 days.

Headquartered in Calgary, Enterra Energy Trust is a Canadian oil and gas
income trust operating in Western Canada. The Trust acquires, operates,
and exploits crude oil and natural gas wells, focusing on low risk and
low cost development. The Trust pays out a monthly distribution, of
approximately 80% of cash flow, which is currently $0.14 (U.S.).

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Contact Information

  • Enterra Energy Trust
    Reg Greenslade
    403-213-2507
    Website: www.enterraenergy.com
    or
    Rocky Mountain Gas, Inc.
    U.S. Energy Corp.
    Keith G. Larsen
    307-856-9271
    or
    EENC's Investor Relations Counsel:
    The Equity Group Inc.
    Linda Latman
    212-836-9609
    or
    EENC's Investor Relations Counsel:
    The Equity Group Inc.
    Rob Greenberg
    212-836-9611
    Website: www.theequitygroup.com
    or
    USE's Investor Relations Counsel:
    LC Group
    Rick Lutz
    404-261-1196