CE Canada Energy Partners Inc

Canada Energy Partners Inc. ("Canada Energy" or the "Company") (TSX VENTURE:CE)
has completed a one day retest of the Portage c-20-E Upper Montney well, at a
restricted end-of-test rate of 8.9 million cubic feet per day, with no water,
and 2758 psi flowing pressure. The well had peak rates during the test of 14.4
million cubic feet while still restricted. The test was cut short due to safety
concerns stemming from extreme cold caused by high, dry gas rates and high
flowing pressures. These results are very encouraging in light of the fact that
the horizontal length of the c-20-E is 50% of typical Montney horizontal lengths
with only 50% of the typical stimulated reservoir volume. A pressure survey also
confirmed that the Upper Montney is 41% over-pressured.


The c-20-E was drilled in the first quarter of 2010 and initially completed in
June 2010 (see Company announcement dated July 6, 2010).


The Portage c-20-E was retested for two reasons: 



1.  The Company thought the original flow-back test kept the rates below
    'critical' velocity (the velocity necessary to efficiently lift water
    from the well). Significant fluid loading was confirmed by a pressure
    survey run in the well between June and November 2010. 
2.  Anecdotal observations from other shale gas plays have indicated
    significant improvement in well flows subsequent to an extended shut-in
    period. The Company believes the re-test of the c-20-E confirms that
    both of these factors resulted in the improved test performance. 



Shale gas well performance improvements after an extended shut-in may be related to:



1.  dispersal/sorption/breakdown of frac water alleviating fluid blocking
    and resulting in higher relative permeabilities to gas.  
2.  Gravitational separation of frac water and gas in the sand packs in the
    fractures resulting in higher relative permeabilities to gas.  
3.  Gas re-saturation resulting in higher relative permeability to gas. 
4.  Re-pressured reservoir energy.  
5.  Fracture stress relief resulting in competent sand packs in the
    fractures and better near-wellbore connectivity.  
6.  Reduced fines movement due to lower water yields. 



The Company also reports the completion of the fracturing and production testing
on its Portage 3-12-82-26. The Operator performed a 5-stage fracture treatment
comprised of 25 perforated intervals over the 1826m lateral and placement of
1500 tonnes of sand. This is 2.2 times the volume of sand and 2.2 times the
perforated intervals as were conducted on the first horizontal well at Peace
River, the c-20-E. The Operator reduced the number of frac stages from the
original design by expanding the treated interval per frac stage. Over a 16 day
flow test period, the well had a peak flow-rate of 4.5 million cubic feet per
day and an end rate of 1.2 million cubic feet per day. The Company believes that
this end rate was adversely affected by persistent water and sand production and
that improved long-term performance is possible. 


The Company is evaluating the results of these tests in concert with the
Operator. We expect to have a reserve study completed by the end of January
2011.


The Company believes that the initial drilling program conducted by the Operator
has confirmed a large in-place gas resource at Peace River, has significantly
de-risked the play, and that further refinements to drilling and completion
practices will progressively result in improved flow-rates and cost
efficiencies. It is also notable that there remain three untested formations
(Doig Siltstone, Doig Phosphate, and Lower Montney) that have been deemed
commercial by adjacent operators in the area with large confirmed in-place gas
resources. 


Canada Energy is an active oil and gas exploration and development company. The
Company possesses a large concentrated land position in a high-impact,
multi-zone, natural gas-bearing area in northeast British Columbia.


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

John Proust, Chairman

Forward Looking Statements: This news release contains forward looking
statements relating to expected or anticipated flow rates, timing for drilling
and completion operations, 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 company's
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 company that actual results achieved during the forecast period will be the
same in whole or in part as that forecast.

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