VANCOUVER, BRITISH COLUMBIA - Canada Energy Partners Inc. (the "Company") is pleased to announce a new strategic initiative for the Company.
New Strategic Initiative
For three years, the Company has been researching and designing a cavitation tool that can excavate cavities in subsurface coal seams for the dual purpose of producing commercial quantities of coal via a wellbore and stimulating the production of natural gas from coal seams. Cavitation completions have been very effective in basins where it has been successfully applied. But currently depressed natural gas and metallurgical coal prices have precluded advancing this initiative at this time. The Company has applied for patents covering its technology. This technology has not been tested in the field; nevertheless, it is predicated on component parts that are routinely used in industry.
The Company believes this technology can also be applied to the extraction of other precious minerals such as diamonds and potash, via either vertical or horizontal wellbores, and has the inherent advantage of being able to access minerals that due to size and/or depth are beyond the economic reach of conventional mining techniques. Because of the flexible application of this technology to other minerals with stronger pricing, the Company intends to pursue joint ventures/farm-ins with companies who own proven mineral deposits. The Company believes that this technology may enable the Company to earn equity interests in these projects and/or generate revenues through the licencing of the technology.
CBM Land Reduction
Due to prolonged, depressed natural gas markets and concerns that these conditions will persist for the intermediate term, as a cost-cutting measure, the Company has decided to reduce over the next 12 months our core CBM land holdings at Peace River to +-25% of our current land position with the retained acreage centered under our greatest net coal thicknesses, while protecting our gas plant, water disposal well, and water disposal rights under 50,000 acres. The Company estimates that the retained lands hold 38% of the total CBM potential of the Company. The Company believes that its control of the ‘sweet spot’ of the CBM potential and the only mid-stream infrastructure currently in the area will enable it to reacquire former lands if and when market conditions justify development. The Company believes the gas plant also has potential utility for future Montney development in the area.
The Company’s decision is predicated on prolonged and persistently low natural gas prices and a forward view that there is a probability of the continuance of those conditions. North American natural gas supply has remained stubbornly high in spite of dramatic cutbacks in natural gas directed drilling. Proposed LNG projects on the West Coast of North America continue to be pushed further into the future. Reduced exports to the US and import competition from the Marcellus Shale to eastern Canada continue to suppress Western Canadian gas prices. The Company has been attempting to monetize its water disposal assets and some portions of its gas plant equipment but current market conditions have adversely affected those efforts. The Company will continue those efforts.
The Company expects to test its cavitation completion technology in the Peace River CBM Project if and when gas prices recover.
The Company intends to complete a private placement of up to 15,000,000 common shares at $0.02 per share for gross proceeds of up to $300,000. The funds shall be used to pay general and administrative costs, land maintenance costs, and the new strategic initiative efforts. Any current shareholders interested in participating in the private placement should contact Ben Jones.
On behalf of the Board of Directors of
Canada Energy Partners Inc.
For more information, please contact:-
CANADA ENERGY PARTNERS INC.
1680-200 Burrard St.
Vancouver, BC V6C 3L6
Main Phone: (604) 909-1154 / Facsimile: (604) 488-0319
Attention: John Proust, Chairman
Direct Phone: (604) 696-9020
Attention: Ben Jones, President and CEO
Direct Phone: (225) 388-9900 ext 101
Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements: This press release contains forward looking statements relating to expected or anticipated future events and operations, number of wells to be drilled, timing of projects and anticipated 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 companies' capability to execute and implement future plans. Actual results achieved may vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. There is no representation by the companies that actual results achieved during the forecast period will be the same in whole or in part as that forecast.