Canada Energy with its Joint Venture Partner has purchased 14 gross (7 net) sections of Deep Rights drilling licenses/leases in the Peace River Project area located in the Northeast British Columbia in the May and June 2010 lease sales. This comprises a 20% increase in the Company's Deep Rights land base. The lands purchased are in close proximity to the Company's first horizontal Montney well, the Portage c-20-E, which is currently being completion tested and lies between the Peace River Project and the Talisman/Canbriam Farrell Project.
Canada Energy is carried by the Joint Venture Partner through the completion of the c-20-E and a further $11 million of joint exploration expenditures. Canada Energy will have a 50% working interest in the deep rights at Peace River Project upon the Joint Venture Partner's completion of its earn-in obligations.
Canada Energy owns a 50% interest in the Peace River Project gas plant and connection to the Spectra Energy sales pipeline which would be available to bring this Montney gas to market.
The Joint Venture Partner has obtained a drilling permit for the second horizontal Montney well and plans to start drilling prior to July 15th. This well is expected to be completed and tested in early Q4 2010.
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