Canada Gas Corp. announces intent to acquire Flying A Petroleum LTD.



    VANCOUVER, Aug. 6 /CNW/ - Canada Gas Corp. (the "Company") announces a
proposal to acquire all of the outstanding shares of Flying A Petroleum Ltd.
("Flying A" tsx.v: FAB) on the basis of 6 (six) Flying A shares for 1 (one)
Canada Gas share.
    This proposal follows on an agreement announced September 2007, whereby
Bighorn Petroleum Ltd., Flying A, Canada Gas Corp (formerly Wyn Developments
Inc.) and Tenaka Drilling Consortium Ltd. would amalgamate to consolidate each
Company's respective assets into one entity. Notwithstanding the agreement of
the parties, negotiations did not result in a formal amalgamation and
subsequently, Wyn Developments Inc. spun off its mineral assets, restructured
its share capital, and changed its name to Canada Gas Corp. (tsx.v: CJC). It
has been the Company's consistent belief that a combination of the companies
holding shared interests in two northeastern British Columbia gas plays is the
ideal strategic direction for the companies, enabling the attraction of strong
technical management and financial assistance to position the projects for
success. This offer represents the next step in the Company's plan to bring
about these benefits. The elimination of duplicate costs for audits, reserve
reports, accounting, office space, management, legal fees and the like would
result in significant cost savings that could be re-deployed. The increased
scale of Canada Gas after the acquisition of Flying A will enhance financial
strength providing improved access for project capital.

    
    For Flying A shareholders, the proposal represents:

    -   An opportunity through which they may obtain shares which will trade
        on the TSX Venture Exchange, in exchange for Flying A shares
        currently subject to a cease trade order.
    -   Enhanced liquidity for Flying A's shareholders in the form of
        Canada Gas shares;
    -   A better opportunity for the development of the Northeastern B.C
        natural gas interests owned by the two companies;
    -   By virtue of the enhanced scale of CJC upon completion of the offer
        the greater opportunity to secure financial and technical resources
        to manage and develop the Company's gas assets;
    -   Increased financial strength, enhanced cash flow from current
        production and improved access to capital;
    -   The opportunity for operational and administrative synergies
    

    An unsolicited proposal respecting the acquisition of all of the
outstanding common shares of Flying A by the Company was presented to
management of Flying A late Friday afternoon, August 1st, 2008, with a
response requested from management by 5 pm, Tuesday August 5th, 2008. The
Company was advised that due to a currently imposed cease trade order
respecting Flying A's common shares, Flying A and its shareholders are
prohibited from negotiating and or entering into a transaction that would
involve the common shares of Flying A, including a takeover bid, without a
partial revocation of said cease trade order. To resolve this issue, the
Company proposes to make an application to the appropriate regulatory
authorities for a partial revocation of the cease trade order for the purpose
of executing and completing this proposal.
    If the Company is successful in obtaining a revocation of the cease trade
order, it intends to commence a formal takeover bid by mailing a formal offer
and takeover bid circular to Flying A shareholders in adherence with all
regulatory and TSX Venture exchange requirements. The offer will be subject to
certain conditions, including receipt of all necessary regulatory clearances,
absence of material adverse changes and acceptance of the offer by Flying A
shareholders holding such number of common shares of Flying A as the Company
considers sufficient to justify proceeding with the acquisition. No threshold
amount has yet been determined by the Company in this regard.
    Subject to the receipt of the partial revocation order, the Company will
attempt to execute lock-up agreements with Flying A's significant shareholders
under which they would agree to tender shares to a take over bid.
    The Company reserves the right to perform five days of due diligence on
Flying A and reserves the right to amend or retract the proposal should the
actual assets under Flying A ownership materially differ than as publicly
disclosed by Flying A.
    If successful, the Company hopes to complete the transaction on or before
October 15th 2008. The Company intends to complete the transaction in
conjunction with planning exploration and development activities for winter
2008/2009.
    This news release does not constitute an offer to buy or an invitation to
sell, or the solicitation of an offer to buy or invitation to sell, any of the
securities of the Company or Flying A, nor is it intended to represent the
commencement of a formal bid to acquire common shares of Flying A. Such an
offer, if and when it is made, will be made pursuant to a formal offer and
takeover bid circular filed with the securities regulatory authorities in
Canada and mailed to the shareholders of Flying A in accordance with
applicable regulatory requirements.
    This proposal is subject to all regulatory requirements and approvals.
    For more information on Canada Gas Corp., please visit www.canadagas.ca
or call 1-888-685-5851.

    On Behalf of the Board,

    CANADA GAS CORP.

    "David McMillan"
    ----------------
    David McMillan, President & CEO


    
                             -ABOUT THE COMPANY-
    

    Canada Gas Corp. (tsx.v: CJC; Frankfurt: YXE; otc:bb: CJCFF) has two
natural gas projects located in the foothills region of the prolific petroleum
and natural gas bearing Western Canadian Sedimentary Basin, northeastern
British Columbia, Canada. The Prophet River and Trutch projects feature
varying PNG rights to multiple prospective target horizons, multiple
prospective development locations, and flexible logistics.

    FORWARD LOOKING STATEMENTS

    This press release may contain forward-looking statements including
expectations of future production. More particularly, this press release
contains statements concerning the Partners' future production estimates,
expansion of oil and gas property interests, exploration and development
drilling, regulatory applications, payout estimates, capital expenditures, and
drilling locations to be drilled in 2007/2008. These statements are based on
current expectations that involve a number of risks and uncertainties, which
could cause actual results to differ from those anticipated. These risks
include, but are not limited to: the risks associated with the oil and gas
industry (e.g., operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or development projects
or capital expenditures; the uncertainty of reserve estimates; the uncertainty
of estimates and projections relating to production, costs and expenses, and
health, safety and environmental risks), commodity price, price and exchange
rate fluctuation and uncertainties resulting from potential delays or changes
in plans with respect to exploration or development projects or capital
expenditures. Additional information on these and other factors that could
affect the Partners' operations or financial results are included in the
Partners' reports on file with Canadian securities regulatory authorities. The
forward-looking statements or information contained in this news release are
made as of the date hereof and the Partners undertake no obligation to update
publicly or revise any forward-looking statements or information, whether as a
result of new information, future events or otherwise, unless so required by
applicable securities laws. Oil and Gas Advisory. This press release may
contain disclosure expressed as "boe". All oil and natural gas equivalency
volumes have been derived using the ratio of six thousand cubic feet of
natural gas to one barrel of oil. Equivalency measures may be misleading,
particularly if used in isolation. A conversion ratio of six thousand cubic
feet of natural gas to one barrel of oil is based on an energy equivalency
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the well head. The TSX Venture Exchange has
not reviewed and does not accept responsibility for the adequacy or accuracy
of this release.





For further information:

For further information: Corporate Communications: Chad McMillan B.A.
(Cmns), (604) 685-5851 or Toll Free: (888) 685-5851, Email: ir@canadagas.ca;
Corporate Information: Canada Gas Corp, 520 - 700 West Pender Street,
Vancouver, BC, V6C 1G8, (604) 685-5851 or Toll Free: 888-685-5851, Fax: (604)
685-7349, Email: ir@canadagas.ca / Web: www.canadagas.ca

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CANADA GAS CORP.

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