Pacific Asia China Energy Inc.

COMPANY DATA | INTRODUCTION |  PROJECT IN HAND | MANAGEMENT
NEWS UPDATE | CHINESE

COMPANY DATA

INTRODUCTION

Pacific Asia China Energy Inc. (PACE) is the first Canadian company to explore for and develop coalbed methane (CBM) resources in China. This entry into the Chinese market follows American corporations such as Chevron-Texaco, Conoco-Phillips and Far East Energy Corporation which have begun exploring for coalbed methane in recent years. To date there have been 21 coalbed methane Production Sharing Contracts (PSC) signed with 10 foreign companies in China with an investment of approximately US$150 million, covering a total area of 32,853 square kilometres. All contracts are signed with the China United Coalbed Methane Company (CUCBM) which oversees CBM exploration, development, production, transportation and sales in China.

PACE is a holding company that recently acquired 100 percent of Asia Canada Energy Inc. This subsidiary has signed a PSC with CUCBM to explore for and develop CBM resources in the large coal producing province of Guizhou. PACE can earn a 60 percent interest by funding up to US$8 million for an exploration pilot program.

PACE also owns 100 percent of China Canada Energy Corporation (CCE). CCE has rights under a separate PSC with CUCBM to earn a 70 percent interest in a CBM property comprising 305 sq.km in the Huangshi mining area in the Hubei province of south-central China. The Company can earn its interest by funding up to US$4 million in exploration expenditures and completing a 5 well pilot program.

The Company has entered into a Memorandum of Understanding with Mitchell Drilling Contractors Pty Ltd. of Brisbane, Australia. The Joint Venture establishes an exclusive license to use Mitchell's proprietary drilling Dymaxion System for drilling CBM projects in China. Dymaxion is a unique and highly effective surface to in-seam drilling technique which the Company has deployed since early 2000. To date, over 200 Dymaxion wells have been drilled on CBM projects.

PROJECT IN HAND

(1) Guizhou CBM Project (PACE 60% CUCBM 40%)

Guizhou Province is located in south-central China approximately 700 km (400 miles) northwest of Hong Kong.

· Major energy producing province. Known as the "home of coal in South China"
· Regional population of 245 million (including surrounding provinces)
· Well developed industrial region

Work Program

· 970 sq.km CBM concession contains potential gas resource of up to 11.2 TCF* based on independent technical report prepared by Sproule International Ltd. - Calgary.
· Coal Bureau/CUCBM data review completed
· 4 - 6 hole test drill program underway to test depths from 250 - 850 m; determine permeability, desorption and reservoir characteristics. (Targeting bituminous coal zone where permeability is expected to be high.)
· Drill program commenced April 2006; Hole #1 and #2 completed. Results and analysis expected summer 2006.
· Pilot program to follow
· Post exploration phase CUCBM finances their 40%

* All estimates are based on data received from the Chinese Coal Bureau and technical report prepared by Sproule International Ltd. and have not been independently reviewed under NI policy 43-101/51-101.

(2) Huangshi CBM Project (PACE 70% CUCBM 30%)

The Huangshi CBM concession is located in Hubei province near Huangshi City in central China.

· Huangshi - a city of 3 million is the primary urban center
· Primary coal producing area since 1909
· Well developed transportation infrastructure. Close proximity to pipelines.

Work Program

· 305 sq.km CBM concession. Technical report prepared by Norwest Corporation recommends 3 - 5 well pilot program to test depths at 500 - 600 m.
· Drill program commenced May 2006 to determine gas content and composition, permeability and producibility.
· Post exploration phase CUCMB finances their 30%


MANAGEMENT

Pacific Asia China Energy Inc. has a well management team with experience in different areas.

Devinder Randhawa, MBA - Chairman, CEO & Director
Mr. Randhawa founded Strathmore Minerals Corp. in 1996 and is currently its President and CEO. Mr. Randhawa also founded and is currently the President of RD Capital Inc., a privately held consulting firm providing venture capital and corporate finance services to emerging companies in both Canada and the United States.

Tunaye Sai - President & Director
Mr. Sai has close to 35 years of international experience in the mining and oil and gas industries. Trained as a mining engineer, Mr. Sai has consulted to private and public companies active in countries including Burma, Malaysia, Thailand, Ecuador, Brazil, Papua New Guinea, France, Italy, Mexico, Indonesia, USA, Venezuela, Canada, and China. In recent years he has focused on CBM resource development in China where he has assembled a team of exploration and development professionals. Mr. Sai and his team have successfully negotiated several CBM joint venture partnerships with the Chinese government and the state-owned China United Coalbed Methane Company (CUCBM).

Dr. David L Marchioni, Ph.D., P.Geol. - VP Exploration & Director
Dr. Marchioni is President and Principal Consultant of Petro-Logic Services, a Calgary-based geological consulting firm. After working in the Australian coal exploration and mining industry, and later as a research scientist in the Coal Technology Division of the Geological Survey of Canada Calgary, Dr. Marchioni returned to Calgary in 1986 and founded Petro-Logic Services. This consulting firm has focused primarily on coalbed methane exploration and development, undertaking geological appraisal of prospective lands, assessment of exploration projects and well-site desorption services. Dr. Marchioni has specialized in coal geology and coal technology throughout most of his career and has published numerous papers on the sedimentology of coal sequences and on coal petrology related to depositional environments and coal utilization.

Steven Khan, MBA, FCSI, CFA - Executive Vice-President & Director
Mr. Khan spent close to twenty years in all aspects of the investment industry, including retail, institutional, corporate finance, capital markets, and investment banking areas. Mr. Khan has held senior management roles including serving as Executive Vice President, President, Chief Executive Officer, and Chairman of a number of regional and national Canadian investment brokerage houses. Mr. Khan has been involved in raising venture capital for many resource and non-resource companies. Mr. Khan is currently a principal of Sona Capital Limited, acting as a consultant to public and private companies. He is a Director of Strathmore Minerals Corp. and Wolf Capital Corp., two companies listed for trading on the TSX Venture Exchange.

Thomas E. Hogan, P.E. - Director
Mr. Hogan has recently retired as Principal, Director, and Chairman of BDS International, LLC, an oil and gas exploration company headquartered in Dallas, Texas. He was also a Principal, Director, and the Chairman of Paradox Partners, LLC in Dallas, Texas. He was President of Windsor Energy Ltd., a Toronto Stock Exchange and Amex listed energy company from June 1994 to June 1998. Mr. Hogan was President of the International Association of Drilling Contractors as President of that organization in 1985 and as Chairman of the Executive Committee in 1986. He has served on the IADC's Board of Directors since 1973.

Norman Mackenzie - Director
Currently, Mr. Mackenzie is Chairman of Raptor Capital Corporation, a public oil and gas company, President of Normac Investment Inc., a private energy investment company, and is Director of Second Star Resources Inc., a private oil and gas-consulting firm. Mr. Mackenzie has over 25 years experience in the domestic and international energy industry and brings an invaluable international energy perspective and investment insight.

Patrick Groening, CA - Chief Financial Officer
Appointed CFO on January 27, 2006. Prior to his joining PACE, Mr. Groening has held Controller and CFO positions for a number of private and public companies.

NEWS UPDATE

On February 20, 2007 Pacifica Asia China Energy Inc. (PACE) has arranged a non-brokered private placement unit financing for total proceeds of between a minimum of $5 million and a maximum of $10 million. The offering will consist of one unit at 60 cents per unit.

On February 19, 2007 Pacifica Asia China Energy Inc.'s joint venture drilling subsidiary, PACE Mitchell Drilling Corp. and its marketing partner in China, Australian Mining Services International Pty. Ltd., have participated in the signing of a multicompany degasification contract with the Shenhua Ningxia Coal Group, a unit of Shenhua Group Corp. Shenhua Group is the largest coal producer in China.

On November 15, 2006 Pacific Asia China Energy Inc. has had a number of corporate developments while it awaits final data from its recently completed six-test-well program at the Mayi East Block, which covers about 138 square kilometers and is situated in the Guizhou Baotian-Qingshan coal bed methane (CBM) main permit area of 970 square kilometers.

Based n favourable preliminary results, the company has commenced plans for an initial pilot test production program. This pilot test program will include three vertical frac wells and two sets of Dymaxion system horizontal drill holes in Mayi East, and two vertical frac wells in the Zhongyi permit area.

On October 10, 2006, Pacific Asia China Energy Inc. announced favourable gas content results in the first three test wells at the Company's coal-bed methane exploration project located in Guizhou province of China. The drilling program has confirmed the thickness and continuity of the numerous coal seams of the Longtan formation. In the MY-03 well, gas content ranges between 107 standard cubic feet per ton to 278 standard cubic feet per ton with an average value of 194 standard cubic feet at the average sample depth of 345 m.

On September 7, 2006, Pacific Asia China Energy Inc. provided the favourable preliminary results of the fourth and fifth of six test well MY-02 and ZY-02, in the Mayi West block, which covers about 138 sq.km and is situated in the Guizhou Baotian-Qingshan CBM main permit area of 970 sq.km. The Company is very pleased with these preliminary results, which are similar to those previously achieved by the Coal Geology Exploration Bureau of Guizhou Province and which data was used by Sproule International Ltd. in its CBM resource analysis.

On July 20, 2006, Pacific Asia China Energy Inc. announced that the TSX Venture Exchange has accepted for filing a memorandum of understanding dated Feb. 3, 2006, and a joint venture agreement dated Feb. 6, 2006, between Pacific Asia China Energy Inc. and Mitchell Drilling Contractors Pty. Ltd. of Brisbane, Australia, pursuant to which the company will entre into a joint venture to provide drilling services in China for coal bed methane. The two parties will hold equal shares in the joint venture. The joint venture will have exclusive licence to Mitchell's Dymaxion drilling system in China.

On July 17, 2006, Pacific Asia China Energy Inc. provided the progress report on the current exploration drilling program at its Guizhou and Huangshi CBM projects in China.

Guizhou - To date three test wells have been completed. Preliminary analysis of the coal seams indicate that the finding strongly correlate with the results provided by the Company's independent technical report prepared by Sproule International of Calgary, The Sproule report including a map of the area, can be viewed online as a public document on SEDAR (www.SEDAR.com ).

Huangshi - The first two test wells at Huangshi are underway. Hole HA-01 is currently drilling at 420m and hole HS-02 is at depth of 720m. Analysis of coal and gas desorption testing will be carried out. Test results will be released when available.

On June 26, 2006, Pacific Asia China Energy Inc. announced preliminary results on the third of six test wells. MY-03, at the Mayi West Block, which cover about 138 square kilometers inside the Guizhou Baotian-Qingshan CBM main permit area of 970 square kilometers.

The company was very pleased with these preliminary results, which are similar to those previously achieved by the Coal Energy Exploration Bureau of Guizhou Province. This was the data used by Sproule International Ltd. in calculating their CBM resources analysis.

On June 12, 2006, Pacific Asia China Energy Inc. released the preliminary results of the second of six test wells, ZY-01, at the Mayi East block, which covers about 138 sq.km and is situated in the Guizhou Baotian-Qingshan coalbed methane (CBM) main permit area of 970 sq.km. Drilling at ZY-01 was recently completed in the Longtan coal formation at a depth of 805 metres. Fifteen coal seams were cored in the sequence and eight seams exceeded one metre in thickness. The total combined thickness of net coal in these seams is 10.46 metres and the No. 29 seam contains net coal of 2.3 metres.

On June 8, 2006, Pacific Asia China Energy Inc. announced that its PACE/Mitchell Drilling joint venture company has appointed Mr. Peter Pacey as Country Manager of its China drilling operations. Mr. Pacey will oversee all aspects of the joint venture activities in China as the Joint Venture Company prepares to deploy Mitchell Drilling Contractors Pty Ltd.'s proprietary Dymaxion Surface to In-Seam Drilling System later this year.

As previously reported, the PACE has contracted for the construction of a Dymaxion Drill Rig as part of its commitments to the PACE/Mitchell Drilling joint venture company. This drill rig is expected to be completed in September 2006.

On May 23, 2006, Pacific Asia China Energy Inc. announced that the Company's subsidiary, Asia Canada Energy Inc. (ACE) and the Alberta Research Council Inc. (ARC), in Edmonton, will commence a cooperative research study that will technically evaluate the potential for coalbed methane (CBM) and/or enhanced CBM development (ECBM) on the Company's CBM concession in Guizhou Province, China. The work will be conducted by the Canadian Consortium on Enhanced Coalbed Methane Recovery which is led by ARC. Other consortium members are Computer Modelling Group, Sproule International Ltd., SNC Lavalin, Calfrac Well Services Ltd., Precision Energy Services and Porteous Engineering Ltd. The study also includes ACE's partner in developing the project, the China United Coalbed Methane Company (CUCBM).

The primary focus of this joint study is to provide a geological and engineering evaluation for potential CBM development on ACE's CBM concession in Guizhou province. ACE will provide all pertinent data as required by ARC and its consortium members in order to complete a geological, engineering and production evaluation. In addition, the consortium members will conduct an ECBM/CO2 sequestration feasibility study on selected ACE coal properties located in Guizhou province.

The evaluation of the Company's CMB concession in Guizhou Province is to be completed by September 30, 2006.

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