Reserve Royalty and PrimeWest Energy Announce Agreement

CALGARY, ALBERTA--Reserve Royalty Corporation (TSE: ROI) and 
PrimeWest Energy Trust (TSE: PWI.UN) jointly announced today that 
they have entered into an agreement whereby PrimeWest will offer 
to purchase all of the issued and outstanding common shares of 
Reserve Royalty. 

The offer will consist of the exchange of 0.065 of a PrimeWest 
trust unit for each Reserve Royalty share and the assumption by 
PrimeWest of Reserve Royalty's debt.  Based on June 19, 2000 
closing prices of $8.10 per trust unit for PrimeWest and $0.38 per
share for Reserve Royalty, the offer represents a 38.6 percent 
premium to Reserve Royalty's closing price. 

Reserve Royalty shares taken up and paid for by way of PrimeWest 
trust units prior to July 31, 2000 will qualify for PrimeWest's 
July distribution, payable August 15, 2000.  PrimeWest's current 
monthly distribution total is $0.16 per trust unit, consisting of 
the regular distribution of $0.10 and an extra payment of $0.06 
per trust unit (representing, in aggregate, $0.01 per Reserve 
Royalty share at the offer exchange ratio). 

The boards of directors of each of PrimeWest and Reserve Royalty 
have approved the proposed transaction, and the board of directors
of Reserve Royalty has resolved unanimously to recommend to its 
shareholders that they accept the PrimeWest offer.  The offer is 
conditional on the tendering of a minimum of 66 2/3 percent of all
outstanding Reserve Royalty shares, as well as a shareholder and 
regulatory approval.  PrimeWest anticipates forwarding a take-over
bid circular to Reserve Royalty shareholders on or before July 7, 
2000.  Scotia Capital Inc. acted as financial advisors to 
PrimeWest. 

The proposed transaction has a total enterprise value of 
approximately $79 million, consisting of $54 million in equity and
approximately $25 million in assumed net debt. 

Certain officers and other shareholders of Reserve Royalty have 
executed lock-up agreements in respect of more than 20 percent of 
the outstanding Reserve Royalty shares, pursuant to which such 
shareholders agree to irrevocably deposit and not withdraw their 
shares under the offer. 

The board of directors of Reserve Royalty has agreed that it will 
not solicit or initiate discussions or negotiations with any third
party concerning any sale of any material position or assets of 
Reserve Royalty, or any business combination involving Reserve 
Royalty.  Reserve Royalty has agreed, under certain circumstances,
to pay to PrimeWest a non-completion fee of $2.5 million plus 
expenses.  PrimeWest also has the right to match any unsolicited 
competing bid.  Newcrest Capital Inc. is acting as financial 
advisor to Reserve Royalty and will provide a fairness opinion in 
connection with the proposed transaction. 

The assets of Reserve Royalty are mainly gross overriding 
royalties on, and some working interests in, approximately 1,500 
barrels of oil equivalent (10:1 BOE) of production comprised of 70
percent crude oil and natural gas liquids and 30 percent natural 
gas.  Gross overriding royalty interests represent approximately 
85 percent of Reserve Royalty's production and reserves.  This 
high-quality long-life production is located mainly in Alberta and
is operated by a number of technically strong and active 
exploration and production companies. 

Reserve Royalty also owns interests, consisting mainly of gross 
overriding interests, in approximately 300,000 net acres of 
undeveloped lands, of which some 285,000 net acres are located in 
Western Canada.  PrimeWest expects that record industry cash flows
should stimulate increased exploration and development activities 
on these lands, potentially leading to future production and 
reserve additions at no risk or cost to Reserve Royalty. 

"This transaction supports stable, predictable and sustainable 
distributions for PrimeWest unitholders," said Vice-Chairman and 
CEO Kent MacIntyre.  "The overriding royalties will grant us an 
economic interest in production, without ongoing capital 
requirements, lessor royalties, operating expenditures and 
abandonment liabilities.  As a result PrimeWest's overall cost 
structure and netback per BOE will show sustainable improvement 
beginning with the third quarter." 

Based on assessments of third-party reserves engineering reports, 
PrimeWest estimates Reserve Royalty's established reserves to 
total 5.3 million BOE on April 1, 2000.  Of this total, 83 percent
is estimated to be in the proved category.  On an established 
reserves basis, the ratio of crude oil and natural gas liquids to 
natural gas reserves is about 67 / 33.  On an established reserve 
basis, the recycle ratio for the transaction is a very robust 2.4 
times. 

PrimeWest will hold a conference call and Webcast for interested 
investors, brokers, analysts and media representatives on Tuesday,
June 20, 2000, at 2:00 p.m. Mountain (4:00 p.m. Eastern).  Callers
may dial 1-800-361-1028 or 1-416-231-6596 a few minutes prior to 
the start and request the PrimeWest conference call.  The call 
also will be available for replay by dialing 1-877-289-8525 and 
entering the pass code 11499 followed by the pound sign.  Internet
users may go to www.newswire/webcast/pages/primewest2.html for the
live Webcast and/or replay, or to the PrimeWest Web site, 
www.primewestenergy.com. 

PrimeWest is a Calgary-based conventional oil and gas trust that 
acquires, develops, produces and sells crude oil, natural gas, and
natural gas liquids for the generation of monthly cash 
distributions to unitholders.  Trust units of PrimeWest are traded
on the Toronto Stock Exchange under the symbol "PWI.UN".  Learn 
more about PrimeWest on the Internet at www.primewestenergy.com.  

Reserve Royalty is a Calgary-based company that creates royalties 
in the oil and gas industry by acquiring them and/or by converting
working interests into royalties.  The company has a substantial 
base of producing and undeveloped land royalties mainly in Canada.
 Shares of Reserve Royalty trade on The Toronto Stock Exchange 
under the symbol "ROI". 

The information in this news release contains forward-looking 
statements with respect to PrimeWest.  By their nature, these 
forward-looking statements involve risks and uncertainties that 
could cause actual results to differ materially from those 
contemplated by them.  These risks and uncertainties include the 
number of Reserve Royalty shareholders who tender their shares to 
the offer. 

This news release shall not constitute an offer to sell or the 
solicitation of an offer to buy any securities in any 
jurisdiction.  The trust units of PrimeWest offered will not be 
and have not been registered under the United States Securities 
Act of 1933 and may not be offered or sold in the United States 
absent registration or an applicable exemption from the 
registration requirement. 

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