BC FORM 53-901F

SECURITIES ACT

MATERIAL CHANGE REPORT UNDER SECTION 85(1) OF THE ACT

ITEM 1. REPORTING ISSUER

Texas Gas & Oil Inc. (the "Company") 4448B Marine Avenue Powell River, B.C., V8A 2K2

ITEM 2. DATE OF MATERIAL CHANGE

June 22, 2001

ITEM 3. PRESS RELEASE

Issued June 22, 2001 and distributed through the facilities of the Canadian Venture Exchange, Vancouver Stockwatch Magazine, and Market News.

ITEM 4. SUMMARY OF MATERIAL CHANGE

Please see attached news release.

ITEM 5. FULL DESCRIPTION OF MATERIAL CHANGE

Please see attached news release.

ITEM 6. RELIANCE ON SECTION 85(2) OF THE ACT

This report is not being filed on a confidential basis.

ITEM 7. OMITTED INFORMATION

There are no significant facts required to be disclosed herein which have been omitted.

ITEM 8. DIRECTOR/SENIOR OFFICER

Contact: David J. Formosa, President/Director Telephone: (604) 485-6080

ITEM 9. STATEMENT OF SENIOR OFFICER/DIRECTOR

The foregoing accurately discloses the material change referred to herein.

“David J. Formosa”

David J. Formosa President/Director

DATED at Vancouver, B.C., this 22nd day of June, 2001.

grb\307201\0235A

TEXAS GAS & OIL INC.

4448B Marine Avenue Powell River, British Columbia V8A 2K2

(604) 485-6080

June 22, 2001

NEWS RELEASE (CDNX Trading Symbol: TXG)

Texas Gas & Oil Inc. (“TGO”) announces that it has entered into a Letter of Intent to acquire Legend Power Systems Inc. (“LPSI”), a Canadian incorporated company, in consideration of approximately 20,300,000 TGO shares and $1,000,000.00 cash. LPSI holds the exclusive Canadian Rights as well as an exclusive Option for the United States of America Rights that has an exercise period of one year (with a one year extension option), to manufacture and distribute a three phase energy saving device generally referred to as an electric harmonizer. TGO is in the process of having an independent valuation prepared of the Canadian rights and U.S. option.

The electric harmonizer was invented in Japan in the early 1990’s and is patented in the United States and has a patent pending in Canada. The rights were acquired by Legend Power Ltd., a company jointly owned by G-Prop Holdings Limited and Cheung Kong Infrastructure Holdings Limited, both of which are listed on the Hong Kong Stock Exchange. LPSI acquired the Canadian rights and the U.S. option from Legend Power Ltd.

The electric harmonizer reduces and harmonizes the voltage, removes electrical spikes, and balances the three phases of power supply to users of electricity. As a result, the consumption (and monthly cost) of electrical power is reduced by between 10% and 15%.

There are in excess of 44,000 installations in Japan which include malls, department stores, office complexes, apartment buildings, government buildings and industrial sites. The electrical harmonizer will be manufactured by independent contractors in Japan, as well as a newly opened plant in Kowloon and a plant under design in China.

The transaction is subject to TGO raising approximately $3,560,000, of which $1,000,000 will comprise the cash portion of the purchase price. The balance of

the funds will be used for operating capital. On closing a finder’s fee of $1,000,000 in shares will be payable to Geoff Silcock, subject to the policies of the Canadian Venture Exchange.

LPSI Chairman and CEO, Gerald A. Gill, of West Vancouver, BC, will be appointed Chairman and CEO at the completion of the transaction. Mr. Gill has over 35 years of corporate management and marketing experience and has an extensive background in international trade. He was formerly the Chairman, President and CEO of Chai-Na-Ta Corporation, a publicly listed company on the TSE and NASDAQ OTC.

Texas Gas and Oil Inc. will undergo a name change to Legend Power Systems Inc.

Completion of the transaction is subject to a number of conditions, including, but not limited to, Canadian Venture Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the reverse takeover may not be accurate or complete and should not be relied upon. Trading in the securities of TGO should be highly speculative.

The Canadian Venture Exchange has in no way passed upon the merits of the proposed transaction, and has neither approved or disapproved the contents of this press release.

ON BEHALF OF THE BOARD

“DAVID J. FORMOSA” DAVID J. FORMOSA President/Director