PEACE RIVER COALBED GAS PROJECT

1. PEACE RIVER COALBED GAS PROJECT NE BRITISH COLUMBIA Hudson’s Hope Gas, Ltd

2. Topics Covered • Introductory key points • Background / History • Project partners • Location / Setting • Coalbed gas resource • Technical/ Operational Approach • Present status • Stakeholder / First Nations aspects

3. Key points • First commercial coalbed gas production in BC • Very large CBG resource in NE BC • BC Government incentives very important • Hudson’s Hope community and stakeholders play important role in project success

4. Location & Setting • 50,000 + acre tenure position • Western edge WCSB • Gething Formation coal measures • Near town of Hudson’s Hope & inside its District Municipal Boundaries • Land use – Mix of agriculture & forested Crown land

5. From: Coalbed Methane Potential in British Columbia – BC MEMPR Peace River CBG Project

6. Peace River CBG – Tenure holdings Spectra Energy Pipeline Hudson’s Hope (Approx town area) Drilling Licence PNG Lease

7. Project Structure JVA – Two partners, each holds 50% WI • GeoMet, Inc. (NASDAQ: GMET) • E & P company - CBG primary emphasis • Corporate HQ – Houston; Operations center- Birmingham • CBG production & development programs in Alabama, Virginia, West Virginia and British Columbia • Operator of Peace River Project (through Hudson’s Hope Gas, Ltd….GeoMet Canadian subsidiary) • Under JV, GeoMet 50% WI includes natural gas rights from surface to bottom of Gething coal measures • Canada Energy Partners (TSX-V: CE) • Exploration & Development company – HQ in Vancouver • Good land position in areas of multi-zone potential in NE BC • Participates in multiple JV projects

8. Project History • Peace River Corp (PRC) –First Drilling Licences in 2001 • PRC initiated exploration/testing and community, First Nations Engagement • Several test wells drilled by 2004; additional DLs • JV with GeoMet in 2004 • Hudson’s Hope Gas, Ltd (HHG) - Canadian subsidiary of GeoMet, became Operator of Record • PRC merged interests with Canada Energy Partners • HHG drilled additional wells – Core, production test & water disposal • First commercial CBG production in BC – December 08

9. Geologic Setting – Hudson’s Hope area at extreme western edge of W. Canadian Sedimentary Basin - Tenure located east of disturbed belt Courtesy of: Barry Ryan

10. Peace River CBG Project at western boundary of WCSB Approx HHG Tenure

11. Coalbed Gas Resource – Geologic Setting • Gething Formation – Lower Cretaceous cyclothemic coal measures • Numerous well-cleated, bright coal seams • Predominately High-Vol A and Med-Vol bituminous • Cumulative thickness – project average 15 m • Typical Gething thickness of 200 to 300 m • Shallowest coals at 300+ m; deepest < 1000m • Average gas content – 400 scf/ton • CO2 varies widely in Project area – Avg 10% in producing area • Gething overlain by 150 – 250 m marine Moosebar Shale

12. Gething Coals – WC Bennett Dam

13. Gething Coals at WC Bennett Dam

14. Coalbed Gas Resource • Exploration confirms very large gas resource • Project Gross GIP – Estimated at > 1 Tcf • GeoMet Working Interest (From2/12/09 Press Release) • The Peace River project is the first commercial coalbed methane project in British Columbia, Canada and there are no other similar producing analogies in the region. As a result, initial proved developed reserves of only 4 Bcf were booked in 2008. • However, an additional 22 Bcf of probable reserves were estimated for the project by DeGolyer and MacNaughton. Note: This does not take into account estimated reserves for at least 200 additional developable well locations.

15. Coalbed Gas ResourceCoal Core – cut for desorption measurement

16. Operational Approach Exploration phase • Wirelinecoreholes - geology / desorption testing • Production test wells cased and fracced for extended dewatering/production testing • Several zones in various parts of tenure evaluated for deep disposal potential • 22 test wells drilled from 2002 – 2008 • Most wells drilled on small pads – 100X100 m • Production test wells • Surface casing set below fresh water zones • 5 ½ “ production casing set below bottom coals • Multiple zones perforated & fracced • Frac types included slick water, nitrogen foam, x-link gels and linear gels • Wells equipped with down hole pumps and dewatered for several months test gas & water volumes & quality

17. Example HHG CBG Well

18. HHG CBG Well

19. Operational Approach Production Phase • First production stage – Focus on SW part of tenure • Future wells to be drilled during Summer/Fall • Reduces cost & provides Summer Drilling credit • Installed infrastructure for 8 production wells • Electric power grid • Low pressure gas gathering and produced water transport lines • Gas and water – HDPE pipe buried in same trench • Gas/water/electric power lines and access roads all installed inside 18 m permitted corridor • Produced water piped to disposal well in south part of tenure • Disposal zone – Baldonnel Formation • Constructed compressor/treatment plant in SW tenure • 4-stage compression to meet Spectra Energy pressure specs • Gas treatment – CO2 removal (Membrane system) • High pressure steel line to Spectra Energy transmission line • Plant and first of the 8 wells went on line late Dec 08

20. Gas & Water Line Installation

21. Low Pressure Gas & Water Lines

22. Access Road/pipeline ROWROW re-graded – Ready for Reseeding 18 m

23. Access Road, Pipeline ROW, Power Line

24. HHG Compressor/Treatment Plant

25. Present Status of Project • Eight wells on Production-Active status • Gas production in early April • Five wells: Production ranging 29 to 155 mcfd • One well – Early peak of > 200 mcfd • Three wells: Early dewatering stage – several mcfd • Water production in early April • All wells producing water • Production ranges from 50 – 268 bpd

26. Stakeholder / First Nations Local government / Community • HHG works closely with District Municipality & community to communicate plans and address concerns • Public meetings & targeted engagement at all stages • HH Mayor & Council and Custodians of Peace Country provided effective forums for community engagement • Community concerns at early project stages evolved into better understanding of & much wider acceptance of project • Engagement continues as critical aspect of HHG’s presence in community • What are key components of HHG success in Hudson’s Hope? • Community willingness to listen & give HHG chance to earn their trust • HHG listens to concerns and looks for ways to mitigate/reduce them • Community recognition of economic growth & sense of fairness re potential impacts

27. Stakeholders / First Nations Private Landholders • Whether agreeable to use of property or not: • Concerns include interference with operations, loss in property value, impact on lifestyle and aesthetics • Bottom line – Want to be treated fairly • How neighbors are treated is important • HHG listens and respond to concerns • Consistent, documented approach to access agreements & compensation • Flexibility in location and construction of wells & infrastructure • Looks for ways for landholder to benefit • Responds to questions and problems immediately • Looks at impact on community around landholder and works to mitigate potential impacts

28. Stakeholders / First Nations Project Tenure in First Nations traditional lands • West Moberly • Saulteau • Halfway River • McLeod Lake (Project tenure south of Peace River) HHG Engagement of First Nations • Early in each project stage – solicits input into planning • Follows OGC Consultation process & evolving provincial policies • Participant in Peace Moberly Tract ADR and SRMP processes • Recognizes concerns of First Nations and the need to provide mitigating solutions

29. Summary and Key Points • Very large gas resource confirmed • HHG applying CBG principles to new area • Canada Energy Partners and GeoMet have both played important roles in Project history • Gas and water production just beginning • Effective stakeholder, community and First Nations engagement is critical

30. Points to take away whether I said them or not! • Peace River Project has the first commercial CBG production in BC • The community of Hudson’s Hope has been a large part of our success • The tax credits and incentives the Province has provided to industry are critical its continued growth • It’s colder up there than we thought. Thank You