Vancouver, British Columbia, Canada � May 25^th, 2009 � Canada Gas Corp. (tsx.v: CJC)  (otc-bb: CJCFF) (Frankfurt:YXE) (�Canada Gas� or the �Company�) is pleased to announce Letters of Intent (�LOI�) to acquire and participate in two Bakken and Nisku/Birdbear Formation oil projects in the province of Saskatchewan.  The Company also announces a $300,000 private placement financing and a $272,000 share for debt settlement, all executable at a price of $0.10 per share.

In the first transaction, Canada Gas has signed an LOI acquire 100% of a licensed copy of approximately 450 miles of 2D seismic data in southwestern Saskatchewan from an individual resident in the province of Alberta (the �Vendor�).  The Company will process and interpret this data in search of Bakken Formation light oil prospects, and reserves the right to pursue 100% ownership of any prospective lands within the seismic area.  In consideration, Canada Gas will pay the Vendor $25,000 cash and $125,000 in shares of the Company, to be issued at a deemed price of $0.10 per share (aggregate 1,250,000 shares), subject to the approval of the TSX Venture Exchange (the �Exchange�).  These shares shall be subject to a four month hold. 

In the second transaction, Canada Gas has signed an LOI with Kinetex Multi Component Services Inc., an Alberta based oil and gas service company (collectively �Kinetex�) to participate, with Kinetex or one of its affiliate or subsidiary companies, in approximately 84 square miles of 3D seismic survey over prospective Bakken and Nisku/Birdbear Formation targets in southwestern Saskatchewan.  The Company will pay 25% of the agreed upon turnkey cost to earn a 25% interest in the data, receive a licensed copy of the data, and earn the right to participate for a 50% participation interest in any land acquisitions within the 84 square mile seismic area for a period of two years. 

Within this 84 square mile area, Kinetex already controls approximately 10 square miles of acreage upon which Kinetex has already shot 2D seismic and identified three Nisku/Birdbear Formation structures.  After completing the 3D seismic program, Canada Gas will also have the option to drill an approximately 2000 meter test well targeting these prospective Bakken and Nisku/Birdbear Formation targets.  Within this 10 square miles of existing acreage,  Canada Gas will pay 90% and an affiliated company will pay 10% of the cost of this well, where, upon drilling to a depth sufficient to penetrate the Nisku/Birdbear Formation, Canada Gas will earn a 75% working interest before payout and a 50% working interest after payout in the drilled lease block.  There are four earning lease blocks within these 10 square miles, and upon completion of the test well, Canada Gas will have 60 day rolling options to drill additional earning wells on this acreage on the same terms. 

These projects offer year round access and as such the Company looks to commence the 3D seismic program in the 3^rd Quarter of 2009 and spud the test well no later than October 1^st, 2009.  Under the terms of the agreement, it is anticipated Canada Gas will be the Operator of both projects.

The Company will prepare formal agreements for these transactions containing conventional industry terms, including a satisfactory due diligence condition and approval of the Company�s Board of Directors as well as Exchange and other regulatory approvals as required.  The transactions are subject to a finders fee of $20,000 payable in shares of the Company at an ascribed price of $0.10 per share (aggregate 200,000 shares), such shares being subject to exchange approval and a four month hold period following the date of issuance.

The Company also announces that it is cancelling the previously announced private placement financing (April 15^th, 2009), and instead announces a private placement financing for 3,000,000 units priced at $0.10 per unit for gross proceeds of $300,000.  The Vendor has agreed to personally subscribe for a minimum of $150,000 of this private placement, and will arrange for his associates and/or affiliated companies to participate for up to $100,000 at a price of $0.10 per unit.  Each unit will consist of one share and one share purchase warrant, each warrant being exercisable into one common share at a price of $0.15 in the first year and $0.26 in the second year.  Proceeds of the private placement will be used for working capital purposes and finders fees may be payable on this transaction, subject to Exchange approval.

In addition, the Company announces shares for debt arrangements with a majority of its existing debt holders.  Creditors holding payables of $272,000 have agreed to convert their debt into shares of the Company at a conversion price of $0.10 per share (aggregate 2,720,000), subject to Exchange approval.  These shares will be subject to a 4 month hold period from the date of closing.

President and CEO Chad McMillan comments that �management is excited about these developments, as together they strengthen the Company, enhance its existing holdings, and offer new opportunities to shareholders.  These projects offer affordable entry, scalable potential, alluring targets and multiple unique leverage characteristics while also positioning the Company to enhance its management team and pursue other opportunities in the near term.�   

These transactions are all subject to TSX Venture Exchange and regulatory approval.

For more information on Canada Gas Corp., please visit www.canadagas.ca or call 1.888.685.5851.

On Behalf of the Board,

CANADA GAS CORP.

�Chad McMillan�

President & CEO                                                        

Canada Gas Corp. (tsx.v: CJC; Frankfurt: YXE; otc:bb: CJCFF) has two natural gas projects located in the foothills region of the prolific petroleum and natural gas bearing Western Canadian Sedimentary Basin, northeastern British Columbia, as well as access to two Saskatchewan Bakken prospecting projects.  The Prophet River and Trutch projects feature varying PNG rights to multiple prospective target horizons, multiple prospective development locations and flexible logistics, including interests in four producing gas wells at Trutch while the Saskatchewan plays provide early stage acquisition, exploration and development opportunities across prospective Bakken and Nisku/Birdbear bearing lands.

FORWARD LOOKING STATEMENTS

This release includes certain statements that may be deemed �forward-looking statements�. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Corporation expects are forward-looking statements. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Corporation, Investors should review the Corporation�s registered filings what are available at www.sedar.com. 

Neither 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.