Canada Energy Partners Takes Legal Action against West Energy

Canada Energy Partners has commenced legal proceedings in the Court of Queen's Bench of Alberta against West Energy Ltd. ("West") for a declaration that West has failed to earn an interest and has no interest in the petroleum and natural gas rights below the Nikanassin formation (deep rights) on the four sections (2,608 acres) located within the Company's ten-section (6,520 acres) Monias Prospect pursuant to a seismic option agreement (the "Agreement") announced by the Company on April 1, 2008.

The Company elected to take this action in response to West's demand that the Company acknowledge that West has earned its 65% working interest in the deep rights of the four sections of the Monias Prospect. The Company's position is that West has failed to complete or abandon the test well in a timely fashion as required by the Agreement. Specifically, West has not tested the main Montney objective which the Company believes to be very prospective for commercial gas production.

Should Canada Energy prove to be successful in its legal action, it will hold a 100% working interest in the deep and shallow rights of all ten sections of the Monias Prospect. Should Canada Energy prove to be unsuccessful in its legal action it will hold a 35% working interest in the deep rights of the four sections, 100% working interest in the shallow rights of the four sections and a 100% working interest in the deep and shallow rights of the remaining six sections of the Monias Prospect.

Canada Energy Partners is an active oil and gas exploration and development company. The Company possesses a large concentrated land position in a high-impact, multi-zone, natural gas-bearing area in northeast British Columbia. Canada Energy has no debt and working capital of approximately $11 million.
 

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