Canada Energy Partners Announces Significant Increase In Montney Resource In Year-End Update

Canada Energy Partners (Toronto Venture:CE) has announced its year-end reserve and resource update, effective April 30, 2013. GLJ Petroleum Consultants evaluated the company's Montney reserves and resources and Netherland Sewell and Associates evaluated the Peace River CBM Project's reserves and resources. The company received an increase in its contingent resources of 173 BCFe associated with its Monias Property.

The company's reserves are summarized below. The year-over-year reserves are essentially unchanged from last year. 7.1% of the company's Montney lands have booked reserves.

The company's resources are summarized below. Offset drilling adjacent to the company's Monias property has resulted in attribution of 173 BCFE of contingent resources to the Monias property, with a liquids component of 14 barrels per million cubic feet. The company had no contingent resources on this property last year. Montney contingent resources are ascribed to only 10.5% of the company's Montney lands and are all attributable to the Monias property.

Netherland Sewell also provided a year-end update on the Peace River CBM Project. Their assessment was essentially unchanged from their prior assessments at 102.5 BCF of proved, probable, possible reserves and 394.1 BCF of best estimate contingent resources net to CE for the CBM project. These resources are uneconomic at current gas prices and development of these resources will be contingent on higher realized gas prices or drilling/completion technology advances.

As shown on the map below, Shell is intensively developing the Montney immediately adjacent to the company's Monias lands and seeing exceptional results. Shell's permitting activity indicates they are stacking laterals 3 to 5 deep in the Upper Montney which would imply 12-20 wells per section. GLJ's analysis indicates an average estimated ultimate recovery per well (EUR), on a proved and probable basis, of 4.5 BCFE per well with +/-14 barrels of natural gas liquids per million cubic feet. The company has five net sections at Monias which could yield 60-100 drilling locations.

As momentum builds toward LNG exports out of the west coast of British Columbia, the Montney Trend of northeast British Columbia continues to be a focal point of M&A activity in Western Canada as demonstrated by $15.9 billion of land transactions in the last 44 months, as summarized in the following table.