The Mid-Continent properties are comprised of oil and natural gas assets primarily located in the Norge Marchand Unit in Grady County, Oklahoma. The Norge Marchand Unit is a waterflood that produces from the Marchand Sandstone and has estimated original oil in place of 200 million barrels. Encore's internal engineers have forecasted production from this large field as of the anticipated closing date. Forecasted production is 1,955 barrels of oil equivalent ("BOE") per day, and the field is 100 percent operated. The acquired properties also include assets in the Texas Panhandle, southwestern Kansas, and western Oklahoma. The Mid-Continent package has estimated proved developed reserves of approximately 12.8 million BOE, 50 percent of which are oil and natural gas liquids and 100 percent of which are proved developed producing. The Norge Marchand reserves represent approximately 63 percent of the Mid-Continent package.

The East Texas properties include long-life assets mainly in the Gladewater field. This field produces primarily from the Cotton Valley Sands. The East Texas properties include 495 gross wells with forecasted production of approximately 17.3 million cubic feet equivalent of natural gas per day. Gladewater's estimated proved developed reserves are approximately 10.3 million BOE, 95 percent of which are natural gas. All of the reserves are proved developed producing.

Acquisition Parameters

                                             Mid-Continent     East Texas     Total   Forecasted daily production (BOE/D)        2,906             2,889          5,795   Total proved reserves (million BOE)        12.8              11.8           24.6    Percentage proved developed                100%              100%           100%    Percentage natural gas                     50%               96%            72%     Lease operating expense (per BOE)          $8.43             $5.47          $6.95   Reserve-to-production ratio (in years)     12.1              11.1           11.6     -------------------------------------------------------------------------------  

Jon S. Brumley, Encore's Chief Executive Officer and President, stated, "This acquisition is vintage Encore. Purchasing long-life properties at a time when prices are below long-term marginal costs has been a tried and true strategy Encore has been practicing for the past 11 years. Acquisition opportunities like this do not happen very often, so when they become available you must be ready. The Norge Marchand Unit is a huge old field with over 200 million barrels of original oil in place and the Gladewater field is a predictable but active area in the Cotton Valley. The industry is in a state of underinvestment and with unconventional horizontal plays becoming a larger percentage of lower 48 gas production, we believe that the market will be ripe for prices to increase in 2010. This acquisition has a production profile that in today's poor price environment is much safer and more desirable than a drilling program."

Mr. Brumley went on to state, "Encore Acquisition Company and Encore Energy Partners are making a great team. I am enthusiastic about the way both companies complement and aid each other. Having this relationship has made each company much more valuable."

Encore's internal engineers have estimated that the proved developed properties will contribute approximately $40 million in cash flow (revenues less direct operating expenses) to the Company in 2009 and $65 million in cash flow in 2010, including hedges entered into in conjunction with the acquisition.

The acquisition is expected to close in August 2009 and will be effective as of April 1, 2009.

Financing and Liquidity Update

Encore intends to finance the acquisition through proceeds from the sale of certain properties in the Rockies and Permian Basin to Encore Energy Partners LP (NYSE: ENP) ("ENP") for $190 million in cash and borrowings under its revolving credit facility for the remaining amount.