Under the agreement, each share of EEX common stock would receive 0.05703 shares of Newfield common stock. EEX's common shareholders will also have the option to elect to receive units in a new trust in lieu of Newfield stock.

The holders of EEX's preferred stock, each of whom has signed a voting agreement to vote its shares in favor of the merger, will receive a total of 4.7 million shares of Newfield common stock in the merger.

Tom Hamilton, EEX Chairman and President, said, "This merger combines two strong onshore U.S. production companies and will provide significant economies of scale in their operation. The combined companies will have the strong balance sheet necessary to realize the potential value represented by EEX's Llano area assets and Gulf of Mexico deep prospect exploration inventory. In addition to the Newfield shares, the royalty trust arrangement provides the EEX shareholders an opportunity to realize incremental value from the exploration potential of our deep shelf program."

This merger is structured to be a tax-free reorganization under the Internal Revenue Code of 1986, as amended, except to the extent of cash paid in lieu of fractional shares and units in the royalty trust.

The merger is subject to the approval of EEX's shareholders, certain regulatory approvals and other conditions and is expected to close in the third quarter of 2002. Morgan Stanley & Co. Incorporated and J.P. Morgan Securities Inc. are advising.

EEX has also entered into a new $250 million secured revolving credit agreement with its banks that replaces the current agreement under which EEX was in default. This new bank agreement expires March 31, 2003.