Fairmount announces 72% increase in production and filing of third quarter report for the three and nine months ended December 31, 2007



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

    CALGARY, Feb. 21 /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 nine months ended December 31, 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
estimated and anticipated production levels, development plans, drilling
locations, and capital expenditures, constitute forward looking information
which are subject to risks and uncertainties. See "Forward - Looking
Information".

    Current Company Production from All Areas:

    Current production is estimated at 635 boe/day representing a 72%
increase in production over the average production for the third quarter ended
December 31, 2007 of 369 boe/day. Another 145 boe/day is anticipated to come
on production by the end of February.

    
    Third Quarter Highlights:

    -   Production increased 30% as compared to the third quarter of last
        year from an average of 284 boe/day in the third quarter of last year
        to 369 boe/day in the third quarter of this year.

    -   New Gold Creek well (0.30 net) drilled during the quarter was tested
        at a combined flow rate of 900 mcf/day plus 60 bbl/day of natural gas
        liquids.

    -   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 on November 15, 2007.

    -   $4,000,000 increase in revolving operating demand loan facility to
        $14,000,000 for general corporate purposes, including capital
        expenditures. Non-revolving acquisition and development demand loan
        facility for up to $4,000,000 also renewed.

    -   Subsequent to quarter end the Company drilled one (one net)
        successful natural gas well in a new exploration area. Additional
        drilling is planned after spring break up to delineate this
        discovery.

    Operations

    -------------------------------------------------------------------------
                                           Three Months Ended
                              December    September       June        March
                                 31,          30,          30,          31,
                                2007         2007         2007         2007
    -------------------------------------------------------------------------
    Wells drilled - gross           3            0            1            3
    -------------------------------------------------------------------------
    Wells drilled - net           1.8          0.0          0.1          1.6
    -------------------------------------------------------------------------
    Natural gas production
     - mcf/day                  1,307        1,333        1,402        1,000
    -------------------------------------------------------------------------
    Oil production bbl/day         13           19           17           15
    -------------------------------------------------------------------------
    NGL production bbl/day        138          116          140          107
    -------------------------------------------------------------------------
    Average daily
     production - boe/day         369          357          390          289
    -------------------------------------------------------------------------
    Average selling price
     - natural gas $/mcf        $6.07        $5.17        $7.06        $7.32
    -------------------------------------------------------------------------
    Average selling price
     - oil $/bbl               $86.70       $78.61       $69.99       $66.68
    -------------------------------------------------------------------------
    Average selling price
     - NGL's $/bbl             $48.01       $40.26       $41.99       $37.93
    -------------------------------------------------------------------------
    Average selling price
     - $/boe                   $42.55       $36.51       $43.41       $42.89
    -------------------------------------------------------------------------


                                           Three Months Ended
                              December    September       June        March
                                 31,          30,          30,          31,
                                2006         2006         2006         2006
    -------------------------------------------------------------------------
    Wells drilled - gross           6            5           13            4
    -------------------------------------------------------------------------
    Wells drilled - net           1.9          0.8          5.6          1.2
    -------------------------------------------------------------------------
    Natural gas production
     - mcf/day                    865          857          574          490
    -------------------------------------------------------------------------
    Oil production bbl/day         25           23           19           13
    -------------------------------------------------------------------------
    NGL production bbl/day        114           84           67           73
    -------------------------------------------------------------------------
    Average daily
     production - boe/day         284          250          182          167
    -------------------------------------------------------------------------
    Average selling price
     - natural gas $/mcf        $6.85        $5.73        $5.90        $7.43
    -------------------------------------------------------------------------
    Average selling price
     - oil $/bbl               $67.06       $78.64       $80.73       $68.71
    -------------------------------------------------------------------------
    Average selling price
     - NGL's $/bbl             $32.86       $36.46       $33.96       $39.01
    -------------------------------------------------------------------------
    Average selling price
     - $/boe                   $40.09       $39.13       $39.58       $44.95
    -------------------------------------------------------------------------
    

    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 84% in 13.75 contiguous sections of land in the Gold Creek area.
Fairmount is the operator of all of its existing Gold Creek wells.
    Gold creek contributed 133 boe/day of production for the quarter ended
December 31, 2007. Subsequent to quarter end the compression facility
expansion was completed and put into service. Current production at Gold Creek
is approximately 405 boe/day with the company estimating another 145 boe/day
behind pipe and anticipated to be on production by the end of February.
Fairmount and partners own gathering and compression facilities sufficient to
process 12.5 mmcf/day of raw gas allowing capacity for future wells in the
Gold Creek area.
    Fairmount commenced a 3 well (1.3 net) drilling program at Gold Creek in
November, 2007. To date, two wells have been drilled with one well (0.50 net)
being dry and abandoned and one well (0.30 net) being successfully completed
in three different zones. The successful well tested at a combined flow rate
of 900 mcf/day plus 60 bbl/day of natural gas liquids. Construction of the
pipeline for this well is underway with this well expected to be on production
by the end of February.
    The Company is not the operator of the third well (0.50 net) planned for
this program but it is anticipated the well will be drilled during March,
2008.
    Based on the results of the seven wells drilled to date on this property,
geologic mapping, and/or 3D seismic Fairmount has identified an additional 6
drilling locations on existing Company lands.

    Harmattan

    Fairmount's Harmattan property is located approximately 105 kilometers
north west of the city 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
December 31, 2007 with the Company estimating 8 to 10 additional locations
remain for future development drilling. Current production at Harmattan is
estimated at 180 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 December 31, 2007. Production
from these two wells averaged approximately 31 boe/day for the quarter.

    
    Financial Results and selected financial information

    -------------------------------------------------------------------------
                                           Three Months Ended
                              December    September       June        March
    $ except number              31,          30,          30,          31,
     of shares                  2007         2007         2007         2007
    -------------------------------------------------------------------------
    Natural gas sales         729,918      633,856      900,622      658,422
    -------------------------------------------------------------------------
    Crude oil and natural
     gas liquids sales        714,465      565,123      641,013      455,324
    -------------------------------------------------------------------------
    Interest income             3,511        3,840        4,667        6,956
    -------------------------------------------------------------------------
    Royalties                (317,908)    (345,581)    (420,662)    (321,739)
    -------------------------------------------------------------------------
    Revenue                 1,142,088      865,907    1,133,766      806,166
    -------------------------------------------------------------------------
    Production expenses       288,903      315,449      215,645      262,958
    -------------------------------------------------------------------------
    General and
     administrative
     expenses                 247,875      344,248      394,290      220,661
    -------------------------------------------------------------------------
    Depletion,
     depreciation &
     accretion                834,993      764,453      789,912      569,914
    -------------------------------------------------------------------------
    Interest expense          164,867      179,169      135,604       21,405
    -------------------------------------------------------------------------
    Net income (loss)
     before income taxes     (463,674)    (820,840)    (503,684)    (376,085)
    -------------------------------------------------------------------------
    Recovery of future
     income taxes                   -            -            -    1,475,074
    -------------------------------------------------------------------------
    Net income (loss)        (463,674)    (820,840)    (503,684)   1,098,989
    -------------------------------------------------------------------------
    Net income (loss)
     per share
      - basic                  $(0.03)      $(0.06)      $(0.04)       $0.08
    -------------------------------------------------------------------------
      - diluted                $(0.03)      $(0.06)      $(0.04)       $0.08
    -------------------------------------------------------------------------
    Weighted average
     common shares
     outstanding:
    -------------------------------------------------------------------------
      - Basic              15,457,889   13,671,889   13,671,889   13,671,889
    -------------------------------------------------------------------------
      - Diluted            15,457,889   13,671,889   13,671,889   13,920,761
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                           Three Months Ended
                              December    September       June        March
    $ except number              31,          30,          30,          31,
     of shares                  2006         2006         2006         2006
    -------------------------------------------------------------------------
    Natural gas sales         545,097      451,908      308,034      334,794
    -------------------------------------------------------------------------
    Crude oil and natural
     gas liquids sales        501,836      447,225      347,115      345,055
    -------------------------------------------------------------------------
    Interest income             3,120        1,212       33,036       42,076
    -------------------------------------------------------------------------
    Royalties                (183,887)    (153,217)    (160,254)    (189,450)
    -------------------------------------------------------------------------
    Revenue                   873,118      752,819      539,712      545,758
    -------------------------------------------------------------------------
    Production expenses       207,473      168,924      119,307       75,234
    -------------------------------------------------------------------------
    General and
     administrative
     expenses                 170,267      231,169      159,191      245,451
    -------------------------------------------------------------------------
    Depletion,
     depreciation &
     accretion                517,116      536,860      343,194      274,213
    -------------------------------------------------------------------------
    Interest expense           23,049       28,786        6,980       16,547
    -------------------------------------------------------------------------
    Net income (loss)
     before income taxes     (116,835)    (284,342)    (130,143)    (140,498)
    -------------------------------------------------------------------------
    Recovery of future
     income taxes                   -            -            -    1,316,700
    -------------------------------------------------------------------------
    Net income (loss)        (116,835)    (284,342)    (130,143)   1,176,202
    -------------------------------------------------------------------------
    Net income (loss)
     per share
      - basic                  $(0.01)      $(0.03)      $(0.01)       $0.10
    -------------------------------------------------------------------------
      - diluted                $(0.01)      $(0.03)      $(0.01)       $0.10
    -------------------------------------------------------------------------
    Weighted average
     common shares
     outstanding:
    -------------------------------------------------------------------------
      - Basic              12,949,824   11,116,889   11,116,889   11,088,236
    -------------------------------------------------------------------------
      - Diluted            12,949,824   11,116,889   11,116,889   11,433,660
    -------------------------------------------------------------------------
    

    Forward - Looking Information

    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 information other than information of historical fact
are forward-looking information. In some cases, forward-looking information
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 information will not occur. Forward-looking information
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 information. 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 information 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 information
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, Phone: (403) 355-0440; or Ryan A. Michaluk, VP
Finance and CFO, RMichaluk@Fairmountenergy.com, Phone: (403) 355-0440;
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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