Canada Energy Partners Buys Hudson’s Hope Gas Ltd.

Canada Energy Partners Inc., Vancouver, (Toronto Venture: CE) plans to purchase the remaining shares of Hudson’s Hope Gas Ltd. that it doesn’t already own from GeoMet Inc., Houston, (Nasdaq: GMET) for approximately C$310,000 in stock.

Canada Energy Partners will pay 2 million shares subject to a 12-month holding period. Hudson’s Hope Gas Ltd. is a wholly-owned subsidiary of GeoMet, which is 50% owner and operator of the Peace River coalbed-methane project in Alberta. Canada Energy Partners owns the other half of the project.

Canada Energy Partners believes the acquisition will allow it to consolidate operations and 100% ownership of the coalbed-methane project. It adds about 230 billion cubic feet of gas resource potential, bringing the project total up to 500 Bcf, although it acknowledges the potential can only be commercialized at higher gas prices.

The acquisition also gives Canada Energy Partners 100% ownership of the Peace River gas plant, which is strategic to the Montney shale developments. The acquisition also solidifies ownership and control within Canada Energy Partners of the only water disposal wells within a 35-mile radius, which are strategic to the coalbed-methane project and the Montney shale developments.

The deal allows Canada Energy Partners to assume GeoMet’s share of the abandonment liabilities associated with the CBM project.