May 12, 2003

News Release: TUSK Arranges Bought Deal Financing for $22.8 million

TUSK Energy Inc. ('TUSK'or the 'Company') announces that it has entered into an agreement to sell, on a bought deal basis, 7,500,000 subscription receipts, each exercisable for no additional consideration, into one common share of TUSK at $3.05 per subscription receipt, to a syndicate of underwriters led by Yorkton Securities Inc.. The gross proceeds of the bought deal financing are $22,875,000. In addition, TUSK has granted the underwriters an option to acquire an additional 2,000,000 subscription receipts on the same terms and conditions until 48 hours prior to the closing of the offering of subscription receipts. If the option is exercised $6,100,000 in additional gross proceeds would be raised bring the total gross proceeds to approximately $28,975,000. The offering is subject to normal regulatory approval and is expected to close by May 23, 2003. The net proceeds of the issue, together with additional bank indebtedness, will be used to fund an acquisition of gas and oil interests the details of which will be disclosed in due course.

The issued will be offered in all provinces of Canada and to Qualified Institutional Buyers in the United States pursuant to appropriate registration exemptions.

TUSK Energy Inc. is a growing Calgary based conventional oil and gas company. TUSK's common shares trade on the Toronto Stock Exchange under the symbols, 'TKE'. Average production during the first quarter was 3,292 boepd resulting in cash flow of $8,579,914. Cash flow per share for the first quarter was $0.43. Earnings per share for the same period were $0.18. Current production is 4,500 boepd (60% gas).

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

TUSK Energy Inc. Norman W. Holton President &Chief Executive Officer 1950, 700-4th Avenue S.W. Calgary, Alberta, T2P 3J4

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