Fairmount announces 43% increase in production and filing of second quarter report for the three and six months ended September 30, 2007



    /NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES OF AMERICA/

    CALGARY, Nov. 28 /CNW/ - Fairmount Energy Inc. ("Fairmount" or the
"Company") (TSX-V - FMT) is pleased to present a summary of its operating and
financial results for the three and six months ended September 30, 2007. For a
complete copy of Fairmount's second quarter report including financial
statements and management's discussion and analysis ("MD & A") please visit
www.sedar.com. Certain information contained in this press release, including
development plans, drilling locations, and capital expenditures, constitute
forward looking statements which are subject to risks and uncertainties. See
"Forward - Looking Statements".

    
    Highlights:

    -   Production has increased 43% as compared to the second quarter of
        last year from an average of 250 boe/day in the second quarter of
        last year to 357 boe/day in the first quarter of this year, based on
        a conversion rate of six thousand cubic feet of natural gas to one
        barrel of oil.

    -   Current production is estimated at 360 boe/day with another
        290 boe/day estimated behind pipe awaiting tie-in this fall.

    -   Infrastructure program at Gold Creek largely complete with all wells
        tied in and compression expansion scheduled for completion by
        mid-January.

    -   Increased ownership at Gold Creek by acquiring the working interest
        share of a minor partner in two wells and some land in the Gold Creek
        area.

    -   Subsequent to quarter end, on November 15, 2007, completed a private
        placement of 3,572,000 common shares on a flow-through basis at a
        price of $1.40 per Flow-Through Share for gross proceeds of
        $5,000,800.


    Operations

    -------------------------------------------------------------------------
                                           Three Months Ended
                             September      June        March       December
                                30,          30,          31,          31,
                               2007         2007         2007         2006
    -------------------------------------------------------------------------
    Wells drilled - gross           0            1            3            6
    -------------------------------------------------------------------------
    Wells drilled - net           0.0          0.1          1.6          1.9
    -------------------------------------------------------------------------
    Natural gas production
     - mcf/day                  1,333        1,402        1,000          865
    -------------------------------------------------------------------------
    Oil production bbl/day         19           17           15           25
    -------------------------------------------------------------------------
    NGL production bbl/day        116          140          107          114
    -------------------------------------------------------------------------
    Average daily production
     - boe/day                    357          390          289          284
    -------------------------------------------------------------------------
    Average selling price
     - natural gas $/mcf        $5.17        $7.06        $7.32        $6.85
    -------------------------------------------------------------------------
    Average selling price
     - oil $/bbl               $78.61       $69.99       $66.68       $67.06
    -------------------------------------------------------------------------
    Average selling price
     - NGL's $/bbl             $40.26       $41.99       $37.93       $32.86
    -------------------------------------------------------------------------
    Average selling price
     - $/boe                   $36.51       $43.41       $42.89       $40.09
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                           Three Months Ended
                             September      June        March       December
                                30,          30,          31,          31,
                               2006         2006         2006         2005
    -------------------------------------------------------------------------
    Wells drilled - gross           5           13            4            7
    -------------------------------------------------------------------------
    Wells drilled - net           0.8          5.6          1.2          1.2
    -------------------------------------------------------------------------
    Natural gas production
     - mcf/day                    857          574          490          569
    -------------------------------------------------------------------------
    Oil production bbl/day         23           19           13           24
    -------------------------------------------------------------------------
    NGL production bbl/day         84           67           73           44
    -------------------------------------------------------------------------
    Average daily production
     - boe/day                    250          182          167          163
    -------------------------------------------------------------------------
    Average selling price
     - natural gas $/mcf        $5.73        $5.90        $7.43       $11.38
    -------------------------------------------------------------------------
    Average selling price
     - oil $/bbl               $78.64       $80.73       $68.71       $69.33
    -------------------------------------------------------------------------
    Average selling price
     - NGL's $/bbl             $36.46       $33.96       $39.01       $44.97
    -------------------------------------------------------------------------
    Average selling price
     - $/boe                   $39.13       $39.58       $44.09       $62.08
    -------------------------------------------------------------------------
    

    Gold Creek

    The Gold Creek area is located on the southern flank of the Peace River
Arch, near Grande Prairie, Alberta. Fairmount has working interests ranging
from 30% to 66% in 15.25 contiguous sections of land in the Gold Creek area.
Fairmount is the operator of all of its Gold Creek wells.
    During the quarter the Company increased its ownership at Gold Creek by
acquiring the working interest share of a minor partner in two wells and some
land in the Gold Creek area for approximately $1,500,000 before closing
adjustments.
    In October 2006 Fairmount commenced a program to drill 4 (1.36 net) wells
in succession on its Gold Creek property as a follow up to its previously
announced (August 2006) Gold Creek discovery well. Three of the four wells
were successful resulting in 3 cased petroleum and / or natural gas wells
(1.08 net) and 1 dry and abandoned well (0.28 net).
    The Company is very pleased with the success of this exploration drilling
program and has the following production and test results to report:
    The first well (0.40 net) was drilled and completed in the fall of 2006.
This well, along with our previously announced (August 2006) discovery well
has been tied in and both wells started gas production in March, 2007.
Currently, these wells are producing at a combined gross rate of 1,000 mcf/day
plus approximately 90 bbls/day of natural gas liquids and 10 bbls/day of crude
oil.
    The second well (0.30 net) was completed and tested in two zones. The
combined total flow rates during the three and four day test periods was
6.5 mmcf/day of natural gas and 335 bbls/day of condensate for a total of
approximately 1,400 boe/day (gross). Fairmount is currently awaiting the
expansion of compression facilities to transport and process the production
from this well. Fairmount, along with partners, has entered into an agreement
with the current operator of the gathering and compression facilities to
acquire a working interest in the compression facilities by paying to increase
the compression and throughput capability of the facilities. Fairmount
completed the tie in of the well into the existing compression facilities
during October 2007 and continues to face third party delays on the
installation of additional compression. All major equipment components have
been manufactured and on site construction is currently underway to
accommodate the delivery of the assembled equipment packages. Fairmount is
anticipating a mid-January 2008 completion date for the infrastructure
expansion.
    The third well (0.50 net) was cased and completed in January, 2007 as an
oil well. This well has was placed on continuous production during the
quarter.
    Gold creek contributed 103 boe/day of production for the quarter ended
September 30, 2007.
    Based on the results of the five wells drilled to date on this property,
geologic mapping, and/or 3D seismic Fairmount has identified an additional 8
drilling locations on existing Company lands.

    Harmattan

    Fairmount's Harmattan property is located approximately 105 kilometers
north west of Calgary. Fairmount has an interest in approximately 20 sections
of land at Harmattan, with an average working interest of approximately 8%.
Most wells at Harmattan are oil wells with associated gas and natural gas
liquids production. Fairmount owns 10% of the gathering and field compression
facilities at Harmattan.
    The Harmattan property has exceeded initial expectations with economic
hydrocarbons being found in multiple formations over our lands. The initial
target was the Lower Cardium formation, however, 20 wells have been
successfully completed and are producing from the Upper Cardium. Fifteen of
these wells are dual producers from both of these zones.
    In total Fairmount has drilled 44 wells (3.8 net) at Harmattan as at
September 30, 2007 with the Company estimating 8 to 10 additional locations
remain for future development drilling. Current production at Harmattan is
estimated at 190 boe/day and the Company expects to maintain production at
about this level for the next two to three years as additional wells are
drilled and re-completions are performed.

    Crossfield

    Fairmount has a land position of approximately 6 sections with an average
working interest of approximately 50% in the Crossfield area, north west of
Calgary. Fairmount is the operator of the Crossfield property with 2 wells
(0.78 net) on production for the quarter ended September 30, 2007. Production
from these two wells averaged approximately 40 boe/day for the quarter.

    
    Financial Results and selected financial information

    -------------------------------------------------------------------------
                                         Three Months Ended
    $ except                 September      June        March       December
    number of                   30,          30,          31,          31,
    shares                     2007         2007         2007         2006
    -------------------------------------------------------------------------
    Natural gas sales         633,856      900,622      658,422      545,097
    -------------------------------------------------------------------------
    Crude oil and natural
     gas liquids sales        565,123      641,013      455,324      501,836
    -------------------------------------------------------------------------
    Interest income             3,840        4,667        6,956        3,120
    -------------------------------------------------------------------------
    Royalties                (345,581)    (420,662)    (321,739)    (183,887)
    -------------------------------------------------------------------------
    Revenue                   865,907    1,133,766      806,166      873,118
    -------------------------------------------------------------------------
    Production expenses       315,449      215,645      262,958      207,473
    -------------------------------------------------------------------------
    General and
     administrative
     expenses                 344,248      394,290      220,661      170,267
    -------------------------------------------------------------------------
    Depletion, depreciation
     & accretion              764,453      789,912      569,914      517,116
    -------------------------------------------------------------------------
    Interest expense          179,169      135,604       21,405       23,049
    -------------------------------------------------------------------------
    Net income (loss)
     before income taxes     (820,840)    (503,684)    (376,085)    (116,835)
    -------------------------------------------------------------------------
    Recovery of future
     income taxes                   -            -    1,475,074            -
    -------------------------------------------------------------------------
    Net income (loss)        (820,840)    (503,684)   1,098,989     (116,835)
    -------------------------------------------------------------------------
    Net income (loss) per
     share - basic             $(0.06)      $(0.04)       $0.08       $(0.01)
    -------------------------------------------------------------------------
           - diluted           $(0.06)      $(0.04)       $0.08       $(0.01)
    -------------------------------------------------------------------------
    Weighted average common
     shares outstanding:
           - Basic         13,671,889   13,671,889   13,671,889   12,949,824
    -------------------------------------------------------------------------
           - Diluted       13,671,889   13,671,889   13,920,761   12,949,824
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                           Three Months Ended
    $ except                 September      June        March       December
    number of                   30,          30,          31,          31,
    shares                     2006         2006         2006         2005
    -------------------------------------------------------------------------
    Natural gas sales         451,908      308,034      334,794      595,204
    -------------------------------------------------------------------------
    Crude oil and natural
     gas liquids sales        447,225      347,115      345,055      336,150
    -------------------------------------------------------------------------
    Interest income             1,212       33,036       42,076       25,749
    -------------------------------------------------------------------------
    Royalties                (153,217)    (160,254)    (189,450)    (225,954)
    -------------------------------------------------------------------------
    Revenue                   752,819      539,712      545,758      736,150
    -------------------------------------------------------------------------
    Production expenses       168,924      119,307       75,234       91,796
    -------------------------------------------------------------------------
    General and
     administrative expenses  231,169      159,191      245,451      196,313
    -------------------------------------------------------------------------
    Depletion, depreciation
     & accretion              536,860      343,194      274,213      291,857
    -------------------------------------------------------------------------
    Interest expense           28,786        6,980       16,547       14,837
    -------------------------------------------------------------------------
    Net income (loss) before
     income taxes            (284,342)    (130,143)    (140,498)      92,855
    -------------------------------------------------------------------------
    Recovery of future
     income taxes                   -            -    1,316,700            -
    -------------------------------------------------------------------------
    Net income (loss)        (284,342)    (130,143)   1,176,202       92,855
    -------------------------------------------------------------------------
    Net income (loss) per
     share - basic             $(0.03)      $(0.01)       $0.10        $0.01
    -------------------------------------------------------------------------
           - diluted           $(0.03)      $(0.01)       $0.10        $0.01
    -------------------------------------------------------------------------
    Weighted average common
     shares outstanding:
           - Basic         11,116,889   11,116,889   11,088,236    9,957,585
    -------------------------------------------------------------------------
           - Diluted       11,116,889   11,116,889   11,433,660   10,386,819
    -------------------------------------------------------------------------
    

    Forward - Looking Statements

    This press release contains forward-looking information, including but
not limited to future exploration and development plans and anticipated
production levels. This information relates to future events or the Company's
future performance. All statements other than statements of historical fact
are forward-looking statements. In some cases, forward-looking statements can
be identified by terminology such as "may", "will", "should", "expect",
"plan", "anticipate", "believe", "estimate", "predict", "potential",
"continue", or the negative of these terms or other comparable terminology. By
its nature, forward-looking information involves numerous assumptions, known
and unknown risks and uncertainties, both general and specific, that
contribute to the possibility that the predictions, forecasts, projections and
other forward-looking statements will not occur. Forward-looking statements
are based on assumptions, including, among other things, the Company's ability
to benefit from the combination of growth opportunities and the ability to
grow through the capital markets; the Company's acquisition strategy, the
criteria to be considered in connection therewith and the benefits to be
derived therefrom; sustainability and growth of production and reserves
through prudent management and acquisitions; the emergence of accretive growth
opportunities; the impact of Canadian governmental regulation on the Company;
the strategy of the Company regarding commodity price risk management, changes
in oil and natural gas prices and the impact of such changes on financial
performance; the level of capital expenditures devoted to development activity
rather than exploration; the use of development activity and/or acquisitions
to replace and add to reserves; the quantity of oil and natural gas reserves
and oil and natural gas production levels; and currency exchange and interest
rates.
    Although the Company believes that the expectations reflected in the
forward-looking information are reasonable, there can be no assurance that
such expectations will prove to be correct. The Company can not guarantee
future results, levels of activity, performance, or achievements. Moreover,
neither the Company nor any other person assumes responsibility for the
accuracy and completeness of the forward-looking statements. Some of the risks
and other factors, some of which are beyond the Company's control, which could
cause results to differ materially from those expressed in the forward-looking
statements contained in this press release include, but are not limited to,
general economic conditions in Canada, the United States and globally;
industry conditions, including fluctuations in the price of crude oil, natural
gas and natural gas liquids and services used by the Company; uncertainties
associated with estimating reserves; royalties payable in respect of oil and
gas production; governmental regulation of the oil and gas industry, including
income tax and environmental regulation; fluctuation in foreign exchange or
interest rates; stock market volatility and market valuations; the impact of
environmental events; the need to obtain required approvals from regulatory
authorities; unanticipated operating events which can reduce production or
cause production to be shut-in or delayed; failure to obtain industry partner
and other third party consents and approvals, when required; and third party
performance of obligations under contractual arrangements. Subject to the
company's obligations under applicable securities laws, the Company is not
under any duty to update any of the forward-looking information after the date
of this press release to conform such statements to actual results or to
changes in the Company's expectations.
    Per barrel of oil equivalent amounts have been calculated using a
conversion rate of six thousand cubic feet of natural gas to one barrel of oil
equivalent (6:1). Barrel of oil equivalents ("boe") may be misleading,
particularly if used in isolation. A boe conversion of ratio 6 mcf:1 bbl is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.





For further information:

For further information: Joseph S. Durante, President and CEO,
JDurante@Fairmountenergy.com; or Ryan A. Michaluk, VP Finance and CFO,
RMichaluk@Fairmountenergy.com; Fairmount Energy Inc., 2200, 520-5th Avenue SW,
Calgary, Alberta, T2P 3R7, Phone: (403) 355-0440, Fax: (403) 355-0465; Visit
us at our website www.fairmountenergy.com

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