Canada Energy Acquires Interests in Peace River Project

Peace River Oil Sands
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Canada Energy Partners Inc. said that the acquisition of additional working interests in the Peace River Project (the "Project") from Peace River Limited Partnership, Peace River Corporation, Eagle Oil & Gas Canada LP and GFR Canada Ltd. (collectively the "Vendors"), together with the non-brokered private placement of CDN $6,000,000, have closed.

As a result of the Acquisition, the Corporation increased its ownership of the Peace River CBM Project (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 increased its ownership in the deep conventional petroleum and natural gas rights ("deep rights") on the lands covered by the Project to a 21.5% working interest and a 5% overriding royalty payable on 80% of the production, convertible on payout into an additional 23% working interest for a total interest of 44.5% after payout.

The Peace River Project consists of approximately 44,468 acres of prospective acreage located in the Peace River Plains area near Hudson's Hope, British Columbia. 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.

Under the terms of the Acquisition, the Corporation issued to the Vendors an aggregate of 23,937,159 common shares (the "Shares") in the capital of the Corporation and paid to the Vendors an aggregate of CDN $2,603,212 cash in consideration for the acquisition of 28% working interest and a net 3.71% after-payout working interest in the shallow rights and an additional 7% working interest, a net 0.1% after-payout working interest and a net 4.2% overriding royalty payable on 80% of production, convertible on payout into an additional 19% working interest in the deep rights. The Shares are subject to a 4 month hold period required by applicable securities laws and the TSX Venture Exchange (the "Exchange"). In addition, the Vendors have agreed that all Shares issued on the closing of the Acquisition are subject to a pooling arrangement, whereby a percentage of the total number of Shares will be released in stages over a period of approximately 31 months from the date of the closing of the Acquisition. The Vendors are at arm's length to the Corporation.

The Corporation's concurrent non-brokered private placement (the "Offering"), announced on March 29, 2007, has been increased to $6,000,000 and comprised an aggregate of 6,000,000 common shares at a price of $1.00 per common share. The Company paid a cash finders fee of $357,000 in connection with this private placement and issued 357,000 of finder's warrants. Each warrant will entitle the holder to acquire one common share of the Company at any time within twelve (12) months from the closing date at a price of $1.00 per share. All securities are subject to a 4 month hold period.

A portion of the proceeds from the private placement were used for the acquisition of the working interest in the Peace River Project and the remaining balance will be used for the related transaction fees, exploration on the Peace River Project and for general working capital purposes.

Further, the Company announced that, Mr. Benjamin Jones, founder of the Peace River Project, has been appointed to the board of directors of Canada Energy. He was previously a senior geological advisor to the Corporation and has extensive experience in the oil and gas industry. Mr. Jones worked for Placid Oil Corporation in Dallas, Texas from 1977 to 1981 as an exploitation engineer and in 1981 became an independent explorationist, screening, generating, and promoting drilling prospects on the eastern shelf of the Permian Basin of West Central Texas. In 1986 he focused on the Gulf Coast Basin and toward raising drilling funds and investing in drilling prospects. From 1988 to 1997 Mr. Jones served as Exploration Manager for Carrollton Resources. During this time, Carrollton participated in several hundred drilling wells and operated numerous properties. Carrollton Resources merged with Titan Exploration Inc., a public exploration company, in 1997. Mr. Jones was engaged as the Gulf Coast Exploration manager from 1997 to 1999 and in 2000 redirected his efforts to pursue coalbed methane projects and raised private equity to fund this pursuit. Mr. Jones is an engineer and is based in Baton Rouge, Louisiana.

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