Symbol & exchange: FGE-V
MONTREAL, Feb. 15 /CNW Telbec/ - Forest Gate Energy reports that it is
continuing its due diligence on the acquisition of oil and gas assets
located in south-western Saskatchewan and is currently busy sourcing a
rig to drill its Pershing gold property in Quebec. The company says it
believes that the oil and gas acquisition could close this week.
On the mineral exploration side, Forest Gate Energy will be undertaking
an exploratory drill campaign before spring break-up and is in the
process of sourcing a rig to drill its Pershing gold property in
Quebec. The company has approached several diamond drill rig suppliers
for a quote to undertake the drilling program on its 100 percent owned
Pershing gold property located near Val D'Or, Quebec. "There is a lot
of exploration going on in Quebec and so it is a tight market for rigs
and personnel. We are presently speaking with a couple companies who
have indicated that they may be able to slot us in between contracts,"
said Edward Procyshyn, Manager, Mineral Exploration.
With regards to the company's oil business, Forest Gate is deep into the
due diligence process on its acquisition. As previously announced (FGE
news release, December 23, 2010), upon closing of the transaction,
Forest Gate will own a non-operated 20 percent interest in oil and gas
licenses encompassing 19,848 acres in south-western Saskatchewan in
areas known as Rangeview, Divide and Katherine. The remaining 80
percent interest is owned and operated by Trafina Energy Ltd., a
publicly-traded oil and gas company based in Calgary.
Subsequent to Forest Gate's December 23 news release, Trafina Energy
reported (see Trafina news release, Jan. 10, 2011) it had placed its
first horizontal well in the Upper Shaunavon formation into production.
Trafina reported that the horizontal well is producing at a gross oil
flow rate of 60 barrels per day.
Prior to the completion of the horizontal hole in the Upper Shaunavon
formation, the Range and Divide properties net production to Forest
Gate would have been 18 barrels oil and 10 barrels of oil equivalent in
gas. The first horizontal well just completed by Trafina in the Upper
Shaunavon will bring net production to Forest Gate of 30 barrels of oil
and 10 barrels of oil equivalent in gas.
Trafina reports that it intends to drill at least two additional wells
in the Upper Shaunavon and at least two wells in the Madison formation
at Rangeview and Divide in 2011.
"We have been working very hard on this deal and for good reason. It
doubles our oil production in the immediate term and has the low-risk,
development potential that could make Forest Gate cash-flow positive by
the end of 2011 or sooner," said Michael Judson, President and Chief
Executive Officer. "It is a significant building block for the
About Forest Gate Energy
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 Corporation is seeking to increase
shareholder value through participation and development of energy and
other resources in Canada and internationally.
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
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
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
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.
This news release is not for distribution to United States newswire
services or for dissemination in the United States.
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
SOURCE FOREST GATE ENERGY INC.
For further information:
ROBERT KRAMBERGER, V-P, INVESTOR RELATIONS