CanWest Plans Winter Drilling Program for Athabasca Oil Sands Acreage

CanWest was successful in its bid to purchase the 23,040-acre Eagle Nest Prospect, situated in the Athabasca Oil Sands in Alberta, Canada, for a cash price of USD 727,187. The Alberta Energy Utilities Board ("EUB"), in its Crude Bitumen Resource Atlas of May 1996, estimated an initial in-place resource of 3.4 billion barrels crude bitumen on the Eagle Nest Prospect.

The Company, through its wholly owned subsidiary, Township Petroleum Corporation, owns a 100% interest in the Eagle Nest Prospect, subject to a CDND 0.09 per barrel royalty and other cash payments. The Eagle Nest Prospect is located in Township 101 North, Range 13 West of the 4th Meridian and is some 70 miles west of the Company's Firebag East Oil Sands Project. The Eagle Nest Prospect is within the Athabasca Oil Sands trend and usually accessible by winter road for exploration.

The Company plans to drill approximately 12 exploratory holes this winter in an effort to confirm, in part, the EUB resource estimate of the Eagle Nest Prospect. The estimated cost for the proposed drilling project is USD 2,000,000. There is no assurance the Company will be able to confirm the EUB estimate.

The Company's independent consultants note there are seven previous exploration wells drilled on the Eagle Nest Prospect that indicate, on a preliminary basis, an average net bitumen pay of 14 meters (46 feet) and an average bitumen content of 11% by weight, with a porosity of 33%, which tend to support the EUB estimates. The bitumen resource is within the McMurray formation and at an approximate depth of 550 meters (1700 feet).

If the proposed exploratory drilling program on the Eagle Nest Prospect indicates there may be resources present, it may be amenable to recovery using the current and widely used SAGD (Steam Assisted Gravity Drainage) technology, which is used to recover bitumen from within the subsurface where it is too deep to mine. SAGD technology consists of two horizontal wells that are ideally about 5 meters (16 feet) apart vertically and up to one kilometer (0.62 miles) in length. The upper horizontal well provides steam under pressure, which is designed to melt the bitumen. The lower horizontal well is designed to be the bitumen producer. The upper and lower wells are called a "well pair". Each "well pair" can potentially, in the right resource, produce up to several thousand barrels bitumen per day, with potential recoveries of approximately 60% of the bitumen in place. Arrays of such "well pairs" are currently producing up to 30,000 barrels per day of crude bitumen at Encana's Foster Creek Project.