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Canada Energy Partners' Operator of the Peace River Coalbed Methane (CBM) Project has acquired six new drilling licenses encompassing 5,720 acres adjacent to the existing acreage of the Project located in the Peace River Plains area near Hudson's Hope, British Columbia. These additions increase the land position of the Project by 13% from 44,468 acres to approximately 50,188 acres. The Company has sufficient working capital to fund this acquisition.
Canada Energy currently owns a 50% working interest in the Peace River CBM Project. Hudson's Hope Gas Ltd., a subsidiary of GeoMet Inc. (NASDAQ:GMET), is the Operator and 50% working interest owner of the Project. GeoMet recently announced a production decision with the final approval by GeoMet's Board of Directors to drill up to 25 initial wells on the Project (see GeoMet's August 14th, 2007 press release). The development plan also includes connecting 6 existing wells that were shut in after initial testing, the drilling of at least one more water disposal well and the installation of associated pipelines, treating and compression facilities necessary to initiate gas sales.
The Operator is currently conducting consultations with affected communities and First Nations (Canadian indigenous populations). Canada Energy Partners will continue working with the Operator on the planned commercial production of the Project. Further, Canada Energy Partners will continue exploring for conventional natural gas in the deep rights on the lands covered by the Project and in the Peace River area of British Columbia.