CANADA ENERGY ANNOUNCES GAS FLOW RATES AND PROJECTED PEAK RATES FROM PRODUCTION TEST WELLS ON PEACE RIVER CBM PROJECT
November 1, 2007
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 1, 2007) - Canada Energy Partners Inc. ("Canada Energy" or the "Company") (TSX VENTURE:CE) is pleased to announce the results from coalbed methane ("CBM") production test wells on the Peace River CBM Project (the "Project").
Fifteen wells have been drilled on the Project to date, including 9 production tested wells, 2 wells for water disposal and 4 core holes. Each of the production tested wells was allowed to flow for 5-9 months under temporary flaring permits to test the productive characteristics of the coal seams. Production rates per well ranged up to 180 MCF/d with up to 150 bw/d (barrels water per day).
Multiple techniques were used to stimulate the production tested wells, with one technique yielding significantly better results. The average flow rate at the end of the testing period on the wells stimulated with the best completion technique was 82 MCF/d and 32 bw/d with an average predicted peak rate of 482 MCF/d. Coalbed methane reservoirs similar to the Project usually increase in production over a period of several years before peaking and then going into a long, slow decline. It is anticipated that this stimulation technique, or some variation, will be used on the 2008 development wells as announced in the Company's news release dated July 3, 2007.
Advanced Resources International, Inc., a Houston, Texas, reservoir engineering consulting firm was engaged by the Operator and performed reservoir simulations on several of the test wells. The simulations on the wells with the best stimulation technique, based on 160 acre spacing, predicted peak production rates 3-7 years after initial production of 360-685 MCF/d, with an average predicted peak rate of 482 MCF/d and an average net methane recovery of 2.83 BCF per well. The reservoir simulations predicted up to 40 years of productive life. The average projected recovery for these simulated wells, assuming the projected recoveries were attained, would be approximately 8 times the average recovery of a Horseshoe Canyon CBM well and 2-4 times the average recovery of a Manville horizontal CBM well on a per section basis. (Comparison derived from Sproule Research Report "Evolution of CBM Resources to Reserves and Commerciality in Alberta" April 17, 2007).
Netherland Sewell & Associates, Inc. ("Netherland") and Sproule Associates Limited ("Sproule"), as reported in the Company's July 16, 2007 news release, both utilized all the test data in their Resource Reports. Netherland's possible and contingent resources, if realized, would yield an average net methane recovery of 1.72 BCF per well, on 160 acres spacing, over the whole Project. With recent land acquisitions (see News Release dated August 23, 2007), the Project now has 315 potential well locations based upon 160 acre spacing.
Reservoir simulations are forward-looking estimates of future production based upon the industry's accumulated knowledge of the production histories and characteristics of existing coalbed methane fields and the application of that historical knowledge together with geological and engineering principles by computer analogue to emerging coalbed methane fields. There is no assurance that the predicted production profile will be realized due to the unique characteristics of each coalbed methane basin.
On behalf of the Board of Directors of
Canada Energy Partners Inc.
John Proust, Director
Forward-looking statements: This document may contain statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company's capability to execute and implement its future plans. Actual results may differ materially from those projected by management. For such statements, we claim the safe harbour for forward-looking statements within the meaning of the Private Securities Legislation Act of 1995.
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