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CANADA ENERGY PARTNERS ANNOUNCES SIGNIFICANT INCREASE IN GAS RESOURCE ON PEACE RIVER CBM PROJECT

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 13, 2009) - Canada Energy Partners Inc. ("Canada Energy" or the "Company") (TSX VENTURE:CE) is pleased to announce the significant increase in its reserves and contingent resources on the Peace River Coalbed Methane ("CBM") Project (the "Project"). The reserves and resources data presented below is based upon an independent reserve assessment and evaluation (the "Report") prepared as of February 28, 2009 by Netherland, Sewell & Associates, Inc. ("NSA"), an independent reservoir engineering firm.

Highlights of the Report:

- Total gas-in-place for the Project has increased to 1.466 Trillion Cubic Feet ("TCF") in the coal formations. NSA did not evaluate gas-in-place in the shale or deeper formations. This represents a 34.9% increase in gas-in-place over the 1.072 TCF reported in the July 2007 NSA report and is attributed to land acquisitions and larger quantities of coal encountered during recent drilling activities.

- Recoverable gas from the Project is estimated at 733.1 billion cubic feet ("BCF"); including proved, probable, possible and contingent resource. This is 36.7% higher than the 536.3 BCF estimate of ultimate recoverable gas in the July 2007 NSA report.

- The total estimated remaining recoverable gas reserves and remaining contingent gas resources net to the Company are 262.2 BCF, including 0.3 BCF proved developed producing reserves ("PDP"), 12.1 BCF probable reserves, 41.5 BCF possible reserves and 208.3 BCF contingent resources. The proved developed producing is nominal due to this being the first commercial CBM project in British Columbia and the producing wells being so early in the dewatering process.

- The estimated future net cash flow to the Company, net of development costs, operating costs, royalties, shrinkage and abandonment costs, but before income taxes, from reserves and contingent resources is $1.76 billion. The PV10% of reserves and contingent resources is $507.3 million.

Ben Jones, founder of the Peace River CBM Project and CEO of the Company, said, "We are pleased with the results of the Netherland Report and the progress of the Project. The comparison of the July 2007 Netherland Report with the 2009 Update herein clearly shows positive growth and graduation of our land position, reserves, and resources. The results of the 2008 drilling program were significantly better than any to date in the total net coal encountered, apparent permeability, and completion effectiveness. The Project continues to have a positive economic impact on the local community. The recent significant investment by Shell Oil into a CBM project immediately north of our acreage further validates the merit and potential size of our Project."

The summary of the Report is presented below:
 -------------------------------------
                                   Net cash
                Gross       Net     flow (2)  PV10%(2)
                BCF (1)      BCF      MM$Cdn    MM$Cdn
------------------------------------------------------
PDP                0.7       0.3         1.2       1.0
------------------------------------------------------
Probable          33.5      12.1        82.7      35.4
------------------------------------------------------
Possible         115.8      41.5       245.8      79.4
------------------------------------------------------
Cont Res         583.1     208.3     1,434.4     391.5
------------------------------------------------------
Totals           733.1     262.2     1,764.1     507.3
------------------------------------------------------
(1) Coal only; raw gas including carbon dioxide.
Netherland did not evaluate the shales.
Deep Rights were not evaluated.
(2) Estimated future net cash and estimated PV10%
values do not represent fair market value.

The study included 300 gross wells on 170-acre spacing. The NSA study has been prepared in accordance with the standards contained in the COGE Handbook and the reserve definitions contained in NI 51-101. Net present value was calculated before income taxes of future net revenue from the Company's resources using forecast prices and costs based on the December 31, 2008 quarterly price forecasts prepared by Canadian independent consultants. All evaluations and reviews of future cash flows are stated prior to any provisions for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves or resources have been assigned. It should not be assumed that the estimates of future net revenues presented represent the fair value of the reserves or resources. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material. The recovery and reserve estimates of natural gas reserves or resources provided herein are estimates only and there is no guarantee that the estimates reserves or resources will be recovered. Actual natural gas reserves and resources may be greater that or less that the estimates provided herein.

Amounts representing Contingent Resources were calculated using deterministic methods and represent the "best estimate (2C)" or mid-range case. Low estimate (1C) and high estimate (3C) cases were not prepared.

The 2007 NSA estimate was prepared using a gas price based on Henry Hub price of CN$8.377 per MMBTU adjusted for energy content, gathering and compression fees, transportation fees and a regional price differential yielding a price of CN$6.99 per mcf over the life of the Project.

The 2009 NSA report was prepared using a forecast price for the local Westcoast Station 2 and was adjusted for energy content, gathering and compression fees, transportation fees and a regional price differential yielding an average price of CN$8.725 per mcf over the life of the reserves and an average price of CN$9.379 per mcf over the life of the resources.

The NSA Report was prepared in accordance with the requirements of NS 51-101.

Canada Energy Partners was formed in May 2006 for the purpose of exploiting the unconventional gas resources in the Peace River Region of northeast British Columbia. In less than one year the Company acquired all of the non-operator-owned interests in the Project and currently owns 50% working interest. The Operator, an experienced CBM producer, owns the other 50% working interest. The Company, the Operator and its predecessors have assembled 50,188 gross contiguous acres considered to be the most prospective area for coalbed methane in the region. The Company and its Operating Partner completed the installation of associated pipelines, treating and compression facilities and initiated gas sales at yearend 2008. Canada Energy Partners will continue working with the Operator toward the continued development of the Project. Further, the Company has an ongoing deep exploration program in progress on Company lands, having drilled 3 Montney exploration wells in the last 9 months and having completed a 28 section 3D seismic program and will continue exploring for conventional natural gas in the deep rights on the lands covered by the Project.

Forward-looking information and statements:

This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. This news release contains forward-looking information and statements pertaining to the estimated value of the Company's reserves and resources, resource estimates, future natural gas prices, future costs, expenses and royalty rates, the exchange rate between the US$ and CDN$, future development, exploration, acquisition and development activities and related capital expenditures, the number of wells to be drilled and timing of capital projects, operating costs and the total future capital associated with development of reserves and resources. The recovery, reserve and resources estimates of the Company's reserves and resources provided herein are estimates only and there is no guarantee that the estimated reserves or resources will be recovered. In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of the Company which have been used to develop such statements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding the impact of increasing competition, general stability of economic and political environment in which the Company operates, the timely receipt of any regulatory approvals, the ability of the operator to obtain qualified staff, equipment and services in a timely and cost efficient manner, drilling results, the ability of the operator to operate in a safe, efficient and effective manner, the ability to replace and expand natural gas reserves and the ability to secure adequate product transportation, future commodity prices, currency, exchange and interest rates regulatory framework regarding royalties, taxes bad environmental matters in British Columbia and the ability to successfully market the natural gas.

The forward-looking information and statements contained in this news release speak only as of the date of this news release, and the Company does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

This news release contains references to resources, which are not, and should not be confused with gas reserves.

Definitions:

"Proved reserves" are those quantities of petroleum, which by analysis of geosciences and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations.

"Probable reserves" are those additional Reserves which analysis of geosciences and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves.

"Possible reserves" are those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than probable reserves.

"Contingent resources" are defined as those quantities of oil and gas estimated on a given date to be potentially recoverable from known accumulations but are not currently economic. The contingencies that result in the classification of the Gething CBM as a contingent resource include, but are not limited to: permeability to gas, gas saturation and/or content, an appropriate and successful field development plan, corporate commitment, and economic factors.

"Discovered resources" are those quantities of oil and gas estimated on a given date to be remaining in, plus those quantities already produced from, known accumulations. Discovered resources are divided into economic and uneconomic categories, with the estimated future recoverable portion classified as reserves and contingent resources, respectively. The reported Discovered Resource cannot be classified into one of the sub-categories of reserve, contingent resource, or unrecoverable resource at this time because it is not possible to estimate the portion of the discovered resource that could be recoverable and/or unrecoverable due to the lack of commercial tests or production testing in the vicinity of Company interest lands. There is no certainty that it will be technically or economically viable to produce any portion of the reported Discovered Resources.

On behalf of the Board of Directors of Canada Energy Partners Inc.

John Proust, Director


The TSX Venture Exchange does not accept responsibility for the adequacy or the accuracy of this release.

CONTACT INFORMATION:

Canada Energy Partners Inc.
John Proust
Director
(604) 696-9020
Email: info@canadaenergypartners.com

or

Canada Energy Partners Inc.
Ben Jones
Chief Executive Officer
(225) 928-9980
Email: info@canadaenergypartners.com
Website: www.canadaenergypartners.com

 


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