CANADA ENERGY PARTNERS ANNOUNCES SIGNING OF PARTICIPATION AGREEMENT WITH WANDOO ENERGY LLC FOR THE DEVELOPMENT OF THE KUESTER-OCHOA PROJECT AND CONCURRENT UNIT FINANCING OF $2M

VANCOUVER, BC, May 9, 2023 /CNW/ - Canada Energy Partners Inc. (NEX: CE.H) (the "Corporation" or "Canada Energy") announces that the Corporation has determined that a lower capital cost acquisition opportunity will satisfy the current capital market appetite in the junior energy markets. Accordingly, the Corporation has entered into a Participation Agreement with Wandoo Energy LLC, a Texas based oil & gas company. The Corporation's capital obligations under the Participation Agreement are approximately US$1,000,000 to acquire a 63% working interest. The capital contribution will be applied to complete a workover program to produce natural gas and condensate initially from an existing Lower Wilcox zone in Kuester Ochoa No.1 well. The well is in the Kuester Ochoa gas unit (~555 acres), located in Lavaca county, Texas, and part of the prolific Wilcox proven production area. The Texas Gulf coast area contains a vast network of substantial pipelines, gas gathering systems and experienced workforce.

The Kuester Ochoa #1 well previously produced 2.89 BCF of natural gas and 53,000 barrels of condensate from a deeper 19 foot pay zone (Lower Wilcox 4). The workover will isolate the current producing zone, and perforate and stimulate (FRAC) ~101 feet of net pay identified at 11,408 – 11,569 ft (Lower Wilcox 0,1,2).

The Corporation's capital contributions will be expended as follows:

Canada Energy's Costs

The initial production rates for the targeted zone (Lower Wilcox 0,1,2) are in the order of 5 – 7 MMsfc/day and 50 - 70 BC/day. These production rates would translate into monthly cash flow for Canada Energy of approximately US$175,000.00 per month and a payback of the ~US$1,000,000 in invested capital of 7 - 9 months using conventional production forecast.

Canada Energy Partner's corporate growth plan calls for the acquisition of several more of these low-cost, low-risk development transactions in the Southern United States region.

A portfolio of these workovers and development projects will provide the strong cash flow base from which the Corporation can begin its next stage of growth for the benefit of all its shareholders.

Private Placement - CDN$2.0M

Canada Energy also announces a non-brokered private placement of units to secure up to CDN$2,000,000. Each unit will consist of one common share at an issuance price of $0.05 and one-half warrant, with a full warrant entitling the holder to acquire an additional common share at an exercise price of $0.15 share for a period of 24 months. Canada Energy may complete a closing under the unit financing at any time prior to the closing under the Participation Agreement. The net proceeds under the unit financing will be used to fund the Corporation's obligations under the Participation Agreement and for general working capital purposes. Subject to applicable securities laws, eligible arm's length parties will be paid customary finder's fees in connection with the private placement representing an 8% cash commission and 8% finder's units. Insiders will be eligible to participate in the private placement. In light of the unit financing, the previously announced private placement of convertible debentrues has been cancelled.

Completion of the Participation Agreement with Wandoo Energy LLC as well as the private placement of units are subject to approval of the TSX Venture Exchange.

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.

This press release contains forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words or statements that certain events or conditions "may" or "will" occur, including, without limitation, estimated revenues. Forward-looking statements in this press release include statements about the anticipated filing deadline for the Annual Filings. Forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include, without limitation, the failure to file the Annual Filings by the anticipated date. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The forward-looking statements contained in this press release are made as of the date hereof, and the Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by law.

SOURCE Canada Energy Partners Inc.

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/May2023/09/c0186.html