Canex Energy Inc.

Canex Energy Inc.

February 24, 2005 22:36 ET

Canex Reports Year End Reserves and Q1 Update


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: CANEX ENERGY INC.

TSX VENTURE SYMBOL: CXO

FEBRUARY 24, 2005 - 22:36 ET

Canex Reports Year End Reserves and Q1 Update

CALGARY, ALBERTA--(CCNMatthews - Feb. 24, 2005) - Canex Energy Inc. (TSX
VENTURE:CXO) is pleased to announce the results of its independent
reserve report completed by Trimble Engineering Associates Ltd.
"Trimble" as of December 31, 2004.

Highlights:

- Proven reserves have increased 500% to 1817 mstboe

- Proven plus probable reserves have increased 443% to 2194 mstboe

- Proven reserve replacement was 1643%

- F&D was $8.40/boe proven and $7.18/boe proven plus probable ($6.28 and
$5.36/boe without future capital)

- A 494% increase in NPV 10% (forecasted price before income taxes)
proven plus probable to $31,725,000

- The Company ended the year at 600 boepd with 400+ boepd behind pipe

Reserves Summary - Company working interest before royalties using
Trimble forecasted price as of Dec 31, 2004



Light Oil Heavy Oil NGL's Gas BOE 6:1
mstb mstb mstb mmscf mstboe
------------------------------------------------------------------

Developed Producing 612 0 13 2062 969
Developed Non Producing 439 0 13 728 573
------------------------------------------
Total Developed 1051 0 26 2790 1542
------------------------------------------
Undeveloped 234 0 0 252 276
------------------------------------------
Total Proved 1285 0 26 3042 1818
------------------------------------------
Probable 200 0 11 995 377
------------------------------------------
Total Proved + Prob 1484 0 37 4038 2194
------------------------------------------

Summary of Net Present Values of Future Net Revenue
Forecasted Prices and Costs
Before Income Taxes, Discounted at (%/year)

As at December 31, 2004
0% 5% 10%
M$ M$ M$
----------------------------------------------------------

Developed Producing 22,725 18,800 16,165
Developed Non Producing 13,103 10,255 8,346
----------------------------
Total Developed 35,827 29,054 24,512
----------------------------
Undeveloped 4,994 3,750 2,908
----------------------------
Total Proved 40,822 32,805 27,420
----------------------------
Probable 8,725 5,891 4,305
----------------------------
Total Proved + Prob 49,547 38,696 31,725
----------------------------

Trimble forecasted price assumptions as of Dec 31, 2004.


Exchange WTI Edmonton AECO
Rate @ Cushing Light Spot
YEAR US$/CDN$ US$/bbl CDN$/bbl $/MMbtu

2005 Forecast 0.83 43.00 51.00 6.75
2006 Forecast 0.83 38.75 46.00 6.50
2007 Forecast 0.83 35.50 42.00 6.25
2008 Forecast 0.83 33.75 40.00 6.00
2009 Forecast 0.83 32.00 38.00 5.75

Prices escalating at 2.0 percent annually thereafter.


All reserves information has been prepared in accordance with National
Instrument "NI" 51-101. The Trimble report contains several cautionary
statements that are required by NI 51-101. Additional information on the
Company's reserves will be filed on Sedar (www.sedar.com).

Light Oil accounts for 69% of the Proven plus Probable reserves. The
Proven Non Producing reserves are from four oil wells at Worsley and one
gas well at Teepee all drilled in Q4. These wells are expected to be
on-stream by the end of Q1. The Proven Undeveloped reserves are from
three future wells at Worsley. The Company is planning to drill 17 wells
at Worsley in 2005.

First Quarter Update

The Company has been busy with completion, equipping and tie-in
operations on four wells (six zones) at Worsley. These step-out wells
were drilled late in Q4 and are expected to be on-stream before the end
of Q1. The Company has secured a drilling rig and will commence a three
well step-out program at Worsley within a couple of days.

Canex participated in a 37% working interest Q1 gas discovery at its
Pouce Coupe property. The well is expected to come on-stream at 2000
mscf/d (Canex 740 mscf/d) in March.

During the first quarter Canex has been successful at acquiring crown
land and farm-ins to expand its prospect inventory. The Company has more
than doubled its undeveloped acreage on the Worsley trend acquiring a
new exploration prospect at Clear Hills. Assuming timely regulatory
approvals and favorable weather conditions, this prospect will be
drilled in March.

At the end of the first quarter following the Worsley step-out and Clear
Hills
exploration prospect drilling, the company intends to review its
business plan and capital resources to determine if it can accelerate
its opportunities.

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 Corporation
may include certain estimates, assumptions and other forward-looking
information. The actual future performance, developments and/or results
of the Corporation 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 Corporation, 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.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Canex Energy Inc
    Stephen Kapusta
    President & CEO
    (403) 263-3232
    (403) 234-8773 (FAX)
    Email: skapusta@canexenergy.com
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.