Forest Gate Closes Acquisition of Oil & Gas Production

This news release is not for distribution to United States newswire services or for dissemination in the United States.

Symbol & exchange: FGE-V

MONTREAL, Feb. 24 /CNW Telbec/ -Forest Gate Energy reports that it has closed its acquisition of oil and gas assets located in south western Saskatchewan from a private, Calgary-based company.

As a result of the transaction Forest Gate owns a non-operated 20 percent interest in oil and gas licenses encompassing 19,848 gross acres in south western Saskatchewan. The remaining 80 percent interest is owned and operated by Trafina Energy Ltd., a publicly-traded oil and gas company based in Calgary, Alberta.

The licenses are located in areas known as Rangeview, Divide and Katherine. Rangeview and Divide are currently producing 30 barrels per day of oil and the equivalent of 10 barrels of oil per day in gas production net to Forest Gate. Production is from the Upper Shaunavon (18 degree API), and Madison formations (10 degree API). Katherine has known hydrocarbon reserves.

Forest Gate's combined oil and gas production from Saskatchewan and Alberta is approximately 80 barrels per day of oil equivalent. The weighting is in favour of oil production with approximately 50 of the 80 barrels in oil and 30 in gas.

Forest Gate and its partner, Trafina Energy, intend to drill at least two additional horizontal wells in the Upper Shaunavon formation and at least two horizontal wells in the Madison formation at Rangeview and Divide in 2011.

"In March, we will be drilling a new horizontal well, which will once again target the Upper Shaunavon formation at Divide," said Michael Judson, President Chief and Executive Officer of Forest Gate.

As a result of this transaction Forest Gate also has been able to attract new technical talent in Calgary, says Judson. "The relationship is in the process of being formalized but we have recruited a highly experienced oil and gas operator to join us in helping build the company. This individual was responsible for putting together the play at Divide, Rangeview and Katherine."

"We are also extremely pleased to be working with Trafina Energy", said Judson. "They have a track record of success in the Canadian Western Sedimentary Basin."

The total consideration for the acquisition was $1.5 million. Forest Gate issued to the private company 7.35 million shares, assumed its bank line of credit of $350,000 and various liabilities the private company had with its joint venture partner in the amount of $100,000. Forest Gate will also make an additional cash payment of approximately $50,000 by March 31, 2011, subject to normal industry adjustments.

The Transaction is subject to final approval of the TSX Venture Exchange. Conditional approval was granted on January 20, 2011.   

About Forest Gate
Forest Gate Energy Inc. is a publicly listed oil and gas exploration and production, and non-energy resource company trading on the TSX Venture Exchange under the symbol FGE. The Company is seeking to increase shareholder value through participation and development of energy and other resources in Canada and internationally.

FORWARD-LOOKING STATEMENTS

BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, the estimated values disclosed in this release do not represent fair market value.

Certain statements regarding Forest Gate, including management's assessments of future plans and operations and Forest Gate's anticipated financial performance, may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties, most of which are beyond Forest Gate's control. These risks may cause actual financial and operating results, performance, levels of activity and achievements to differ materially from those expressed in, or implied by, such forward-looking statements.

Such factors include, but are not limited to: the impact of general economic conditions in Canada and the United States; industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced; competition; the lack of availability of qualified personnel; fluctuations in commodity prices; the results of exploration and development drilling and related activities; imprecision in reserve estimates; the production and growth potential of Forest Gate's various assets; fluctuations in foreign exchange or interest rates; the ability to access sufficient capital from internal and external sources; and obtaining required approvals of regulatory authorities.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to United States Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. 

Neither TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this release.

SOURCE FOREST GATE ENERGY INC.

For further information:

Robert Kramberger, V-P, Investor Relations
1-866-666-3040
rkramberger@forestgate.ca
www.forestgate.ca

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FOREST GATE ENERGY INC.

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