Upper Lake Oil and Gas announces completion of plan of arrangement


    CALGARY, Oct. 15 /CNW/ - Upper Lake Oil and Gas Ltd. ("Upper Lake")
announced today that at the special meeting of shareholders, optionholders and
warrantholders of Diamond Tree Energy Ltd. ("Diamond Tree") held Friday,
October 12, 2007, Diamond Tree securityholders approved the previously
announced Arrangement involving Upper Lake, Diamond Tree and Crocotta Energy
Inc. ("Crocotta"). Of the votes cast by Diamond Tree securityholders at the
special meeting, in excess of 99% were in favour of the resolution approving
the Arrangement. After the meeting, Diamond Tree obtained a final order from
The Court of Queen's Bench of Alberta approving the Arrangement. Articles of
Arrangement were subsequently filed with the Registrar of Corporations
(Alberta) and the Arrangement became effective on Friday, October 12, 2007.
    Shareholders of Diamond Tree also passed resolutions authorizing the
share option plan of Upper Lake and the private placement of up to $25 million
of common shares by Crocotta. These resolutions are more particularly
described in the Diamond Tree Management Information Circular and Proxy
Statement dated September 12, 2007 (the "Diamond Tree Circular"). Concurrent
with the closing of the Arrangement, Crocotta sold $12.5 million of its common
shares, by way of private placement.
    In connection with the Arrangement, Diamond Tree shareholders received
one share of Upper Lake for each Diamond Tree share and Crocotta acquired all
of the issued and outstanding common shares of Diamond Tree in exchange for
Crocotta common shares. Crocotta has advised that it has effected a 3 to 1
share consolidation, which was approved at the special meeting of its
shareholders held on Thursday, October 11, 2007. The consolidation became
effective immediately after the exchange of Crocotta shares for Diamond Tree
shares pursuant to the Arrangement. As a result, the Crocotta common shares
issued to the former holders of Diamond Tree common shares have been
consolidated on a 3 to 1 basis, resulting in Diamond Tree shareholders
receiving 0.3175 of a Crocotta common share (post-consolidation) in exchange
for each Diamond Tree common share held immediately prior to the completion of
the Arrangement.
    In connection with the Arrangement, certain oil and gas properties of
Diamond Tree in central and eastern Alberta, consisting of exploration assets,
producing properties, related tangibles and undeveloped lands, were
transferred to Upper Lake. Additional information regarding the asset transfer
and the business of Upper Lake is contained in the Diamond Tree Circular,
which has been filed with the Upper Lake profile on SEDAR and is available at
    Upper Lake has been advised that the Upper Lake common shares and the
post-consolidation Crocotta shares will commence trading on the Toronto Stock
Exchange on Wednesday, October 17, 2007, and that the common shares of Diamond
Tree will be delisted immediately prior to the opening of trading on
October 17, 2007. The Upper Lake shares will trade under the symbol "UP."
    Former registered shareholders of Diamond Tree must submit a Letter of
Transmittal (in the form that accompanied the Diamond Tree Circular) to
Valiant Trust Company, together with their Diamond Tree share certificates, in
order to receive their Upper Lake and Crocotta (post-consolidation) share
certificates. Non-registered shareholders, being those whose shares are held
on their behalf by a nominee (i.e. a broker, trust company, bank or other
registered holder) are advised to contact their nominee. A copy of the Letter
of Transmittal can be downloaded from SEDAR at www.sedar.com (under the
Diamond Tree profile). Former holders of Diamond Tree shares are cautioned
that they should determine the exact number of post-consolidation Crocotta
shares held by them prior to effecting any trades in Crocotta shares.


    Forward-Looking Statements

    Certain information set out in this News Release constitutes
forward-looking information. Forward looking statements are often, but not
always, identified by the use of words such as "seek", "anticipate", "plan",
"continue", "estimate", "expect", "may", "will", "intend", "could", "might",
"should", "believe" and similar expressions. Forward-looking statements are
based upon the opinions and expectations of management of Upper Lake, as at
the effective date of such statements and, in certain cases, information
provided or disseminated by third parties. Although Upper Lake believes that
the expectations reflected in such forward-looking statements are based upon
reasonable assumptions, and that information obtained from third party sources
is reliable, they can give no assurance that those expectations will prove to
have been correct. Forward-looking statements are subject to certain risks and
uncertainties (known and unknown) that could cause actual outcomes to differ
materially from those anticipated or implied by such forward-looking
statements. Accordingly, readers should not place undue reliance upon the
forward-looking statements contained in this News Release and such
forward-looking statements should not be interpreted or regarded as guarantees
of future outcomes. The forward-looking statements of Upper Lake contained in
this News Release are expressly qualified, in their entirety, by this
cautionary statement. Various risks to which Upper Lake is exposed in the
conduct of its business are described in detail in the Diamond Tree Circular
which is available under the Upper Lake profile at www.sedar.com. Subject to
applicable securities laws, Upper Lake undertakes no obligation to publicly
revise the forward-looking statements included in this News Release to reflect
subsequent events or circumstances.

For further information:

For further information: UPPER LAKE OIL AND GAS LTD., 1200, 111 - 5th
Avenue SW, Calgary, Alberta, T2P 3T3, Phone: (403) 237-9141, www.upperlake.ca;
Kelly J. Ogle, President and Chief Executive Officer, (403) 237-9141 x.223

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