C&C Energia Ltd T.CZE

Merger

[segltech]

Choice Resources Corp. and Deep Resources Ltd. Announce Merger 08:00 EDT Friday, May 12, 2006 CALGARY, ALBERTA--(CCNMatthews - May 12, 2006) - Choice Resources Corp. ("Choice") (TSX VENTURE:CZE), and Deep Resources Ltd. ("Deep") (TSX VENTURE:DEP) are pleased to announce a proposed merger of the two corporations on the basis of one share and 0.35 of one share purchase warrant of Choice being issued in exchange for 3.5 Deep shares. Each whole warrant will entitle the holder to acquire one Choice share at an exercise price of $1.50 per share. The warrants will expire one year from closing (expected to be in early July), subject to a forced early-exercise at the Corporation's option if the shares trade at a 10% premium to the exercise price based on the average closing price for a period of 10 or more business days. The combined assets will create a company with 9.1 million Boe of proved and probable reserves, 95% comprised of natural gas, approximately 2,000 boe/d of production at March 31, 2006 and an estimated reserve life index of 12.5 years based upon proven plus probable reserves and current production. Reserves estimates are based on the latest engineering reports as of December 31, 2005 for Deep and February 28, 2006 for Choice. There is approximately 200 boe/d waiting for completion and tie-in after road bans are lifted. The combined company will have 82.4 million shares outstanding (basic), a market capitalization of approximately $90 million (based on May 11, 2006 closing share prices) and net debt of approximately $22 million. Choice shareholders will have an 82% pro forma ownership of the combined entity. Deep shareholders will be receiving 14.8 million shares in the merged entity plus 5.18 million warrants to purchase shares under the above terms. The merger provides Choice shareholders with the following advantages: 1) Two additional core areas in the Whitecourt and Newton areas; 2) 23,000 additional net undeveloped acres; 3) Incremental production of 550 boe/d (90% natural gas); 4) Additional reserves of 1.4 million Boe on a proven plus probable basis comprised of 88% gas (848 mboe proven reserves - 85% gas and 587 mboe of probable reserves - 93% gas); 5) 27 sections of land on the Peace River Arch area with 10 potential drill locations; 6) 8 sections of land in the Greencourt area with 5 identified drilling locations; and 7) Lower general and administrative costs per unit of production on a go-forward basis by combining the two corporations. The merger provides the following benefits for Deep shareholders: 1) Deep becomes part of a larger corporation with better access to capital and larger conventional and acquisition bank lines, a strong balance sheet and excellent share liquidity; 2) Deep shareholders gain access to a larger number of exploration plays with an additional 65,000 acres of undeveloped land and an inventory of over 40 potential well locations and 18 high impact exploration prospects; 3) Additional reserves of 7.6 million Boe on a proven plus probable basis comprised of 89% gas (6.5 million of proven reserves - 88% gas and 1.1 million probable reserves - 96% gas); 4) Increased reserve life from 7 years to over 12 years on a proved plus probable basis; and 5) Lower general and administrative costs per unit of production. This transaction has the unanimous support of the Deep and Choice boards of directors, and Choice has obtained lockup arrangements with management and directors of Deep representing approximately 8% of the issued and outstanding shares. Choice and Deep have entered into an agreement to effect the transaction by a Plan of Arrangement in respect of Deep and its shareholders. The transaction is subject to various conditions, including regulatory and court approvals and requires the vote of two thirds of the Deep shareholders at a meeting which is expected to be held in July. An information circular detailing the transaction is anticipated to be mailed to the Deep shareholders in June. The agreement provides for mutual break fees of $500,000 payable by one party to the other in certain circumstances. In addition, under the terms of the transaction Deep has the right to appoint two directors to the merged board. Jennings Capital Inc. has been appointed Choice's financial advisor in connection with the proposed transaction and has provided the board of directors of Choice with its opinion, subject to review of the final form of documents effecting the transaction, that the consideration offered pursuant to the transaction is fair, from a financial point of view, to the shareholders of Choice. FirstEnergy Capital Corp. has been appointed Deep's financial advisor in connection with the proposed transaction, and has advised the board of directors of Deep that it is of the opinion, subject to its review of the final form of the documents effecting the transaction, that the consideration offered pursuant to the transaction is fair, from a financial point of view, to the shareholders of Deep. CAUTION REGARDING FORWARD LOOKING STATEMENTS Certain statements contained herein constitute forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this report should not be unduly relied upon. These statements speak only as of the date of this presentation. The Corporation does not undertake any obligation to publicly update or revise any forward-looking statements. The recovery and reserves estimates on the Corporation's properties described herein are estimates only. The actual reserves on the Corporation's properties will be greater or less than those calculated in the report. Per barrel of oil equivalent ("boe") may be misleading particularly if used in isolation. A BOE conversion of 6000 cubic feet of gas to 1 barrel of oil and is based on an energy equivalency conversion method primarily applicable at the burner tip. This does not represent a value equivalency at the wellhead and may not be appropriate for value comparisons. FOR FURTHER INFORMATION PLEASE CONTACT: Choice Resources Corp. Gordon D. Harris President and CEO [phone] [phone] (FAX) Email: [e-mail] or Choice Resources Corp. Steve Austin Chief Financial Officer [phone] [phone] (FAX) Email: [e-mail] or Choice Resources Corp. 1150, 606 - 4th Street S.W. Calgary, Alberta T2P 1T1 [phone] [phone] (FAX) Website: www.choiceresources.ca or Deep Resources Ltd. Eugene A. Wasylchuk President and Chief Executive Officer [phone] [phone] (FAX) Email: [e-mail] or Deep Resources Ltd. Warren F. E. Coles Chief Financial Officer [phone] [phone] (FAX) Email: [e-mail] or Deep Resources Ltd. 710, 400 - 5th Avenue S.W. Calgary, Alberta T2P 0L6 The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release.