Canada Energy Acquires New Peace River Leases

Canada Energy Partners Inc. said that Hudson's Hope Gas Ltd. (a subsidiary of GeoMet Inc.), the operator of the Peace River Project for the shallow rights, has acquired five new drilling licenses encompassing 3,149 hectares (7,781 acres) adjacent to the existing acreage of the Peace River Project located in the Peace River Plains area near Hudson's Hope, British Columbia. These additions increase the land position of the Peace River Project from 36,687 acres to approximately 44,468 acres.

Canada Energy currently owns, or has the rights to earn, a 21% working interest in the shallow rights. The Corporation recently announced (see March 26, 2007 press release) the acquisition of additional interests in the Peace River Project.

Upon completion of the Acquisition, the Corporation will increase its ownership of the shallow rights to a 49% working interest and an additional 3.71% after payout working interest for a total interest of 52.71% after payout. In addition, the Corporation will increase its ownership in the deep rights to a 21.5% working interest and a 5% overriding royalty payable on 74% of the production, convertible on payout into an additional 23% working interest for a total interest of 44.5% after payout.

GeoMet Inc., an experienced coalbed methane producer, is the operator and 50% working interest owner in the shallow rights. Triumph Pacific Oil & Gas Corporation is the operator and a 53% after payout working interest owner in the deep rights.


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