The Board Of First Calgary Is Firmly Committed To Creating Superior Value For All Shareholders And To Considering All Strategic Options To Achieve That Goal


    TSX: FCP
    AIM: FPL

    CALGARY, March 26 /CNW/ -

    Dear First Calgary shareholders,

    By now you may have received proxy materials from Waterford Finance &
Investment Limited, an offshore holding company which we believe to be
controlled by Mr. Michael Kroupeev, seeking to remove First Calgary Petroleums
Ltd.'s ("First Calgary" or "Company") President and Chief Executive Officer
Mr. Richard Anderson and install a dissident slate of directors handpicked by
Mr. Kroupeev, including Mr. Yuri Shafranik.
    Your board is extremely concerned that the Waterford circular may not
fully reflect Waterford's intentions and reinforces our belief that Waterford
and Mr. Kroupeev's goal is to seize effective control of First Calgary without
paying a control premium. You should question Waterford's assertion it is
merely "a catalyst, not the boss". Based on associations between Waterford and
Mr. Kroupeev and certain of the dissident nominees, the board is concerned
that Waterford and Mr. Kroupeev are attempting to take effective control of
your Company. It is important that you vote in order to prevent this from

    Will the dissident nominees represent all shareholders equally or favour
    the views of Waterford and Mr. Kroupeev?

    Your board believes that certain of Waterford's nominees have business
relationships with Waterford and Mr. Kroupeev that could affect their
judgment. Consider the following when deciding how to cast your vote:

    Waterford, Mr. Kroupeev and Mr. Shafranik: It has been reported in the
media that Mr. Shafranik has partnered with Waterford in prior transactions.
It is believed that Mr. Shafranik has had business relationships with Mr.
Kroupeev in the past.

    Waterford, Mr. Kroupeev and Emerald Energy Plc: Waterford is a major
shareholder of Emerald Energy Plc with an approximate 30 percent interest.

    Alastair J. Beardsall: Mr. Alastair J. Beardsall is the past Chairman and
Chief Executive and current executive Chairman of Emerald Energy Plc. In 2003,
the UK Panel on Takeovers and Mergers deemed Mr. Beardsall and other directors
of Emerald Energy Plc to be acting in concert with Waterford in connection
with its acquisition of control of Emerald Energy Plc. Prior to the
acquisition of Emerald Energy Plc by Waterford, it is believed that Mr.
Beardsall provided consulting services to Waterford as did other directors of
Emerald Energy Plc.

    Keith Henry: Mr. Keith Henry is the senior independent director of
Emerald Energy Plc.

    William Y.W. Fung: Mr. William Fung is a Partner of Blake, Cassels &
Graydon LLP who is representing Waterford in connection with the April 8
shareholders' meeting of First Calgary.

    Do you believe the dissident nominees will act independently of Waterford
    and Mr. Kroupeev when each of them have been hand-picked by Mr. Kroupeev
    and four of the nine nominees have existing business relationships with
    Waterford and Mr. Kroupeev?

    The board urges you to consider Waterford's assertion it is merely "a
catalyst, not the boss".

    We believe Waterford wants control of First Calgary without paying you a

    By making unfair claims about First Calgary and Mr. Anderson, Waterford
is attempting to portray itself and its nominees as better options to lead
First Calgary as it finalizes preparations for oil and gas production in
Algeria's Block 405b. Your board believes Waterford is hoping to exploit the
current low share prices and leverage a relatively small interest in the
Company into an effective control block and seize control of your Company's
board and the future direction of First Calgary. It is only by executing the
BLUE proxy and voting as recommended by the incumbent First Calgary board that
shareholders can protect their interests by ensuring that First Calgary will
continue to be managed by an independent board in the interests of all

    Waterford and Mr. Kroupeev's actions are opportunistic.

    Waterford's dissident actions have been carefully timed to take advantage
of First Calgary's shareholders at a time when the share price does not
reflect the Company's intrinsic value. First Calgary has been successful in
advancing development of its world-class oil and gas reserves, and we are
poised to arrange the financing and award the construction contracts that will
lead to the estimated start of production in 2010. Mr. Kroupeev is well aware
of this and First Calgary's ability to substantially increase its value. The
board is concerned that this attempt to gain effective control of First
Calgary, if successful, might effectively place the reins of power in his
hands and there is no assurance that this outcome is in the best interests of
First Calgary and its shareholders. We need your support to ensure Waterford's
attempt to seize effective control of First Calgary is defeated at the
April 8, 2008 meeting.

    Let us set the record straight.

    In its proxy circular, Waterford makes several claims about First Calgary
President and Chief Executive Officer Mr. Anderson and what it calls a lack of
strategy to deliver long-term shareholder value. In this letter, your board
hopes to set the record straight for you, the Company's owners:

    First Calgary has the right strategy and leadership to create shareholder
    value. Waterford doesn't.

    Waterford asserts that First Calgary has failed to develop and implement
strategies to create sustainable shareholder value. In fact, First Calgary has
a clearly defined business plan for its Algerian assets and has met major
milestones as it successfully moves towards the objective of achieving
production in 2010. Under Mr. Anderson's leadership, First Calgary entered
into a valuable production-sharing contract with Sonatrach, the Algerian
national oil company. In addition, under Mr. Anderson's leadership, First
Calgary entered into an agreement setting out the commercial terms for the
sale of its entire gas production from MLE field to Sonatrach at competitive
    Furthermore, management of First Calgary's relationships with Algerian
authorities have resulted in government approval for a phased development plan
for the MLE oil and gas field and the completion of front end engineering and
design work for the MLE gas plant, pipeline and gathering systems. First
Calgary expects to award the contract for main construction by July 2008.
    First Calgary closed a convertible debt financing in December 2007 for
approximately 25 percent share of its estimated MLE development cost and has
retained Citibank since mid-2006 to advise on the project financing for the
funding of the development costs. JPMorgan Cazenove and Canaccord Adams have
also been retained by First Calgary to advise on strategic and other options.
First Calgary has also established a New Ventures Group in London to identify
global opportunities beyond Block 405b in order to further enhance shareholder
value beyond achieving full production from its current reserves.
    Conversely, Waterford has not come forward with any strategic or business
plan should it acquire effective control of First Calgary. The board believes
that shareholders are being asked to transfer effective control of their
Company to Mr. Kroupeev and Waterford on blind faith. Not only have Mr.
Kroupeev and Waterford failed to outline a plan for First Calgary's future,
their proposals might significantly delay First Calgary's development plan to
bring its reserves into production and jeopardize years of essential goodwill
between your company, Sonatrach and the Algerian government, leading to
potentially substantial loss in shareholder values.

    Mr. Anderson is a strong leader who has assembled a world-class
    management team.

    Waterford wrongly contends that First Calgary's incumbent President and
Chief Executive Officer is a weak leader without the ability to lead the
Company into the future. Yet, in its proxy circular, Waterford admits First
Calgary has a "strong management team" capable of enhancing long-term
shareholder value. Mr. Anderson has articulated a clear strategy that has been
approved by the First Calgary board, and his decision-making ability and
relationships in Algeria have placed the Company in excellent position going
    The dissident group offers no alternative candidates for the position or
plans for the future. A First Calgary under Waterford and Mr. Kroupeev control
could have an uncertain future with an unnamed Chief Executive Officer.

    Mr. Anderson is demonstrably aligned with your interests.

    Mr. Anderson has been criticized by Waterford for not representing First
Calgary shareholders. But his 0.9 percent interest in the Company represents a
significant personal investment in First Calgary. Mr. Anderson holds more
shares than any other director, and roughly two-thirds of his compensation is
based on the Company's share performance.
    Furthermore, Mr. Anderson has invested a great deal of his career and his
energy into bringing First Calgary to the position it is in today. The board
is concerned that Mr. Kroupeev and Waterford want to leverage that sweat
equity, and the investments of all its other shareholders, for their own
objectives which might conflict with yours.
    Mr. Anderson's compensation is fair and was approved by First Calgary's
    Waterford also contends that Mr. Anderson is enriching himself at the
expense of First Calgary and its shareholders. In reality, Mr. Anderson's
compensation package is well within First Calgary's industry peer group and
was approved by the board of First Calgary.
    According to the Compensation Committee's independent compensation
consultant, his compensation package is only slightly above the 50th
percentile and only half of the top end of the total direct compensation range
for the chief executive officers of the 17 international oil and gas firms in
First Calgary's industry peer group. In addition, Mr. Anderson has no
long-term compensation plan or even a pension plan with the Company, which
means his fortunes are directly tied to First Calgary's success.
    Following the principles of good governance, First Calgary's compensation
committee retained Mercer, a leading independent compensation consultant, in
2008 to ensure the Company's entire compensation policy is fair for all and
representative of the Canadian oil and gas industry.

    First Calgary has assembled a strong slate of director nominees.

    First Calgary is building on the strength of its current management team.
Mr. Garfield Emerson, Q.C., a longtime director of some of Canada's largest
companies and a recognized expert on corporate governance, will bring
strategic leadership to the board as the newly appointed Chairman. In
addition, First Calgary has also assembled a slate of nominees with an
impressive breadth of experience in oil and gas, banking and finance,
international business and foreign affairs. The following nominated directors
are independent of special shareholder interests and possess the necessary
skills and knowledge critical to First Calgary and its shareholders.

    -   Garfield Emerson, Q.C.: Finance (current director of Sentry Select
        Capital Corp. and Wittington Investments, Ltd. and former director of
        Canada Deposit Insurance Corporation, University of Toronto Asset
        Management Corp. and Genstar Capital Corp.); Investment banking
        (former Chief Executive Officer of NM Rothschild & Sons Canada Ltd.);
        Corporate governance (current director of CAE Inc., and Canadian Tire
        Corporation Limited, former Chairman of the Board, Rogers
        Communications Inc., and a certified director of the Institute of
        Corporate Directors and member of the Directors in Residence faculty
        of The Directors College of the DeGroote School of Business at
        McMaster University); Law (former National Chair of Fasken Martineau
        DuMoulin LLP and former senior partner of Davies, Ward & Beck).

    -   Roy MacLaren: International trade (Minster of International Trade,
        Foreign Canadian High Commissioner to the U.K. and Foreign Service
        diplomat); Banking (advisor to Deutsche Bank); Oil and gas (advisor
        to British Petroleum); Public service (Minister of State; Finance and
        Minister of National Revenue); Business (President Ogilviy and
        Mather, President and Publisher CB Publications, past or current
        member of boards of Standard Life, Brookfield, Canadian Tire
        Corporation Limited, Algoma Central, Patheon).

    -   Stuart B. McDowall: Foreign Affairs (Ambassador to the United Arab
        Emirates); Oil and Gas (Principal of McDowall Developments, director
        of Groundstar Resources Ltd., former director general of Talisman
        Energy, senior associate of the Canadian Petroleum Institute and
        Chief Executive Officer of Blue Mountain Energy Ltd.).

    -   Darryl J. Raymaker, Q.C.: Energy sector (worked on Amoco/Dome
        Petroleum takeover and arrangement, served on boards of Petrostar
        Petroleum Ltd. and Groundstar Resources Ltd.); International
        negotiations (involved in direct negotiations with national oil
        companies of Algeria, Kyrgyzstan and Egypt and the governments of
        Yemen and Syria); Civil service (Chairman of the Calgary Police
        Commission, served on boards of Calgary District Hospital Group and
        the Calgary Planning Commission).

    -   Kenneth Taylor: Government Relations (Canadian Foreign Service
        diplomat including; Canadian Ambassador to Iran during the 1979 U.S.
        hostage crisis; Canadian Consul-General to New York City), Business
        (Chairman Taylor-Ryan Inc., board member Rockwell Capital, Senior
        Vice President of Nabisco Brands RJR Nabisco); Energy sector (board
        member of Hydro One and Taylor Gas Liquids Fund).

    -   John A. van der Welle: Oil and gas (Managing Director, Head of Oil
        and Gas, Sector Corporation Finance at the Royal Bank of Scotland,
        Finance Director at Premier Oil plc., Finance Director of Hardy Oil
        and Gas plc); Finance (served on UK's Oil Industry Accounting
        Committee, Group Treasurer for Enterprise Oil plc).

    -   David Savage: Oil and gas and finance (Chief Financial Officer and
        interim Director of Corporate Finance for First Calgary, Executive
        Vice President and Global Head of Corporate Finance at Commerzbank
        AG; Director of Deutsche Bank AG and Managing Director (Global
        Petroleum Group) of Chase Manhattan Bank).

    Waterford's nominees, on the other hand, include Mr. Shafranik and
several other businessmen who have been associated with Waterford and Mr.
Kroupeev in the past.

    Choosing not to sell First Calgary in 2005 was a prudent decision.

    Waterford says First Calgary and Mr. Anderson failed in not successfully
selling the Company in 2005. In reality, Mr. Anderson and the board exercised
proper business judgment in retaining Lehman Brothers to advise them on a fair
value for the Company. When proposals came in that were too low, the board
rightly decided they weren't in First Calgary shareholders' best interests and
turned them down.
    Certain of the dissidents' nominees were on the board that unanimously
agreed First Calgary was worth more than the proposals received, and chose
instead to continue to build shareholder value through its original plan.
Surprisingly, Waterford suggests in its proxy circular it would rather have
seen First Calgary sold regardless of the price.

    First Calgary's business plan is working as it approaches first

    Waterford suggests First Calgary has lost the confidence of the market
because Mr. Anderson has "consistently overpromised and under-delivered." In
fact, Mr. Anderson has led First Calgary through the challenging transition
from an oil and gas explorer to a development production company and well
positioned to generate future growth and returns for investors. To that end,
the financial markets have consistently supported First Calgary as it raised
approximately C$1 billion to fund its exploration, appraisal and development
    First Calgary is 30 months away from production and realizing the rewards
of six years of hard work. The actions of the dissident shareholders threaten
to undermine the Company's progress and impose serious delays and disruptions.
Waterford has failed to identify any strategy and business plan for First
Calgary or nominate an alternative Chief Executive Officer. The board is
concerned that Waterford and Mr. Kroupeev aim only to wrest control of the
Company without paying a control premium and without a strategic plan or
executive leadership of its own to create shareholder value.


    It is vital you fully understand what may happen to your investment if
Waterford seizes effective control of your Company. For this reason, the board
urges you to carefully read our information circular and execute the BLUE
proxy by voting as recommended by the board of First Calgary. Voting is a very
quick and easy process that empowers you to state your position and protect
your investment, but you must act and vote your BLUE proxy to ensure your
position is recognized.
    We believe that the depth of experience and strategic vision of the First
Calgary nominees are essential to the Company's success and makes us best
suited to lead your Company.


    The Board of Directors of First Calgary Petroleums Ltd.

                      Your vote is extremely important,
                         Vote your BLUE proxy today!

    Make no mistake. Every vote is important and your participation is needed
to ensure that First Calgary Petroleums Ltd. can continue to implement its


    Voting is a very quick and easy process. To be effective, your BLUE proxy
must be received before and no later than 10:00 a.m. (Calgary time) April 4,
2008, using any one of the methods described on the BLUE form of proxy. Due to
the limited time available, we recommend voting by internet, telephone or

    Even if you have already voted using the dissident proxy you have every
    right to change your vote by simply executing the BLUE proxy as indicated
    below. It is the later dated proxy that will be counted.

                The Board recommends that you vote your BLUE

                FOR fixing the number of directors at nine;
                FOR the election of the First Calgary nominated
                AGAINST the Removal Resolution;
                AGAINST the first two resolutions of the First
                Shareholder Proposal;
                FOR the third resolution of the First Shareholder
                AGAINST the Second Shareholder Proposal; and
                FOR the appointment of KPMG LLP as our auditors.


    Should you have any questions or require assistance in voting your BLUE
proxy please contact Georgeson, the Proxy Solicitation Agent hired by First
Calgary Petroleums Ltd., at:

    -   North American Toll Free Number: 1-866-725-6572

    -   (*)TOLL FREE - European: 00 800 6611 6611

    -   European Collect: +44 117 378 6025

    (*) Austria; Belgium; Denmark; Finland; France; Germany; Ireland; Italy;
    Netherlands; Norway; Spain; Sweden; Switzerland; United Kingdom

             Protect your position and protect your investment in
                        First Calgary Petroleums Ltd.

                      Please vote the BLUE proxy today.


    First Calgary's circular is available on SEDAR ( For up to
date information we encourage you to visit the First Calgary website

    About First Calgary Petroleums Ltd.:

    First Calgary Petroleums Ltd. is an oil and gas company actively engaged
in international exploration and development activities in Algeria. The
Company's common shares trade on the Toronto Stock Exchange in Canada (FCP)
and on the AIM of the London Stock Exchange in the UK (FPL).

    This news release includes statements about expected future events and
financial results that are forward looking in nature and subject to risks and
uncertainties. First Calgary Petroleums Ltd. cautions that actual performance
may be affected by a number of factors, many of which are beyond its control.
Future events and results may vary substantially from what First Calgary
Petroleums Ltd. currently foresees.

For further information:

For further information: First Calgary Petroleums Ltd.: Jeffrey P.
Angel, Vice President Corporate Communications and Investor Relations, Tel:
(403) 264-6697; Other Contacts: James Henderson, Pelham Public Relations, Tel:
+44 (0)20 7743 6673; Carina Corbett, 4C - Burvale Limited, Tel: +44 (0) 20
7559 6710; Mandy Dinning, Hill & Knowlton Canada, Tel: (403) 268-7858;
Nominated Advisers: Richard Swindells, David Nabarro, Nabarro Wells & Co.
Limited, Tel: +44 (0)20 7710 7400

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