Canext Energy Ltd.
TSX VENTURE : CXZ

Canext Energy Ltd.

September 22, 2009 17:38 ET

Canext Announces Results of Horizontal Oil Drilling at Sweeney

CALGARY, ALBERTA--(Marketwire - Sept. 22, 2009) - Canext Energy Ltd. ("Canext" or the "Company") (TSX VENTURE:CXZ) is pleased to announce it has successfully drilled and completed its first horizontal well (60% WI) at Sweeney. The Company drilled a vertical stratigraphic test in a new quarter section to extend the pool boundary. The well logs indicated six to seven meters of oil pay with porosities greater than 20%. The well was plugged back and re-drilled as a short horizontal with 210 m of open hole all of which is estimated to be in the pay zone. During completion operations the Company swab tested and flowed oil over three days at rates of 15 - 25 bbls of oil per hour with less than 1% water cut. The well was tested at a relatively low drawdown suggesting higher inflow rates are possible.

The Company also drilled a vertical infill well (60% WI) at Sweeney which encountered approximately eight meters of net pay with porosity greater than 20%. The well has been completed and swab tested at rates up to 10 bbls per hour of oil over a three day period with water cut of 1%. Both wells were completed without stimulation. Pressure recorders have been run to confirm inflow characteristics and determine if there is any near wellbore damage. The Company may proceed with stimulations to further enhance production based on the pressure transient results.

The wells are expected to be on production in October at a combined rate of 160 - 200 bbls/d (100 - 120 bbls/d net). Based on regulatory approval and gas conservation, production is expected to be increased to 400 bbls/d (240 bbls/d net) by the end of December or early January. The results from the new wells are similar to the offset well which has produced 50,000 bbls of oil in the first 11 months of production and is currently producing 260 bbls/d (155 bbls/d net). Both new wells qualify for the Alberta Drilling Credit and the Alberta Royalty Incentive. Based on a current oil price of $70 US WTI, the Company anticipates cash flow net of royalties, operating and transportation costs to be $45 - 50/bbl. Canext has placed an updated presentation on its website.

Reader advisory:

The term "BOE" may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio for natural gas of 6 mscf: 1 bbl has been used which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Investors are cautioned that the preceding statement of the Company may include certain estimates, assumptions and other forward-looking information. The actual future performance, developments and/or results of the Company may differ materially from any or all of the forward-looking statements, which include current expectations, estimates and projections, in all or part attributable to general economic conditions and other risks, uncertainties and circumstances partly or totally outside the control of the Company, including natural gas/oil prices, reserve estimates, drilling risks, future production of gas and oil, rates of inflation, changes in future costs and expenses related to the activities involving the exploration, development and production of gas and oil hedging, financing availability and other risks related to financial activities. The Company's forward looking statements are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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