Canex Energy Inc.

Canex Energy Inc.

March 24, 2006 19:43 ET

Canex Reports Year End Reserves

CALGARY, ALBERTA--(CCNMatthews - March 24, 2006) - 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 at December 31, 2005.


- A 194% increase in NPV 10% (forecasted price before income taxes) proven plus probable to $93,149,000

- Proven reserves have increased 78% to 3,232 mstboe

- Proven plus probable reserves have increased 95% to 4,278 mstboe

- Proven reserve replacement was 1074%

- F&D was $20.13/boe proven and $15.63/boe proven plus probable ($18.05 and $12.99/boe without future capital) based on un-audited capital spending of 30.97MM$

- Three year all in F&D $14.71/boe Proven and $12.05/boe Proven plus Probable.

Reserves Summary - Company working interest before royalties using Trimble forecasted prices as at December 31, 2005

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

Developed Producing 905 - 59 3,446 1,538
Developed Non Producing 615 - 69 2,543 1,108
Total Developed 1,520 - 128 5,989 2,646
Undeveloped 469 - 16 604 586
Total Proved 1,989 - 144 6,593 3,232
Probable 666 - 39 2,050 1,046
Total Proved + Prob 2,655 - 183 8,643 4,278

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

As at December 31, 2005
0% 5% 10%
M$ M$ M$

Developed Producing 53,049 46,592 41,857
Developed Non Producing 33,835 28,583 24,567
Total Developed 86,884 75,175 66,424
Undeveloped 13,198 10,466 8,446
Total Proved 100,082 85,641 74,870
Probable 32,088 23,709 18,279
Total Proved + Prob 132,170 109,350 93,149

Trimble forecasted price assumptions as at December 31, 2005.

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

2006 Forecast 0.85 60.00 70.00 10.50
2007 Forecast 0.85 55.75 65.00 9.50
2008 Forecast 0.85 51.50 60.00 8.50
2009 Forecast 0.85 49.00 57.00 7.50
2010 Forecast 0.85 46.50 54.00 7.00

Prices escalating at 2.5 percent annually thereafter.

Light Oil accounts for 62% of the Proven plus Probable reserves. The Proven Non Producing reserves are generally from uncompleted zones in twenty-five wells at Worsley. The Proven Undeveloped reserves are from eight future wells at Worsley.

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 as required by NI 51-101 will be filed and can be viewed on Sedar (

First Quarter Update:

Nine of the eleven wells originally planned for the first quarter of 2006 have been drilled. One well is currently drilling and one well, a 3100 m Gilwood test at Clear Hills has been deferred until the end of the year as the Company was unable to secure a rig capable of the drilling the deep target. All of the operated wells drilled to date were cased but the Company elected not to participate in the casing of one non-operated well (0.5 net) in West Kaybob. At Worsley, one (0.58 net) infill well was successfully drilled. The Company has been busy with completion, equipping and tie-in operations on this and a number of other wells drilled late in Q4, all of which are expected to be ready to produce early in the second quarter. Canex participated in drilling and casing two (0.7 net) non-operated wells at Teepee. One well tested gas and will be tied in shortly. A completion on the second well is pending. At Clear Hills, four new pool wildcat wells (2.3 net) were drilled and cased. Only one of these has been completed and it tested oil and solution gas at high watercuts from the first zone. Completions targeting other zones are planned for this well.

During the first quarter Canex was successful in continuing to acquire crown land and secure farm-ins to expand its prospect inventory in the Clear Hills area. The Company, along with a partner, completed a 25 square mile proprietary 3D seismic shoot which covers a large portion of our undeveloped land base. Interpretation of the 3D will occur over the next month.

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 TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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