Fairmount announces filing of annual financial statements and NI 51-101 Reserves Data for the year ended March 31, 2008.



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

    CALGARY, June 27 /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 year ended March 31, 2008. For a complete copy of
Fairmount's annual financial statements and management's discussion and
analysis ("MD & A") and Fairmount's Statement of Reserves Data in accordance
with NI 51-101 with the related reports please visit www.sedar.com. Certain
information contained in this news release, including reserves and present
value of future net revenues, development plans, drilling locations, and
anticipated production from Gold Creek and Harmattan, constitute forward
looking information which are subject to risks and uncertainties. See "Forward
- Looking Information".

    
    Highlights:

    -   Cash flow from operations of $1,443,059 or $0.10 per share for the
        year.

    -   Production has increased 53% over last year from an average of
        251 boe/day in 2007 to 383 boe/day in 2008.

    -   Substantially all of the increase in reserves was achieved through
        the drill bit.

    -   Before tax present value of Gross Proved plus Probable reserves
        discounted at 10% and using forecast prices and costs increased 43%
        from $29,658,000 at March 31, 2007 to $42,373,000 at March 31, 2008.

    -   Gross Proved plus Probable reserves increased 25% from 2,052,000 boe
        at March 31, 2007 to 2,562,000 boe at March 31, 2008.

    -   Before tax present value of Gross Proved reserves discounted at 10%
        and using forecast prices and costs increased 22% from $21,931,000 at
        March 31, 2007 to $26,707,000 at March 31, 2008.

    -   Gross Proved reserves increased 16% from 1,293,000 boe at
        March 31, 2007 to 1,495,000 boe at March 31, 2008.

    Operations

    -------------------------------------------------------------------------
                                            Three Months Ended
                  Year Ended
                     March       March     December   September      June
                      31,         31,         31,         30,         30,
                     2008        2008        2007        2007        2007
    -------------------------------------------------------------------------
    Wells drilled
     - gross               6           2           3           0           1
    -------------------------------------------------------------------------
    Wells drilled
     - net               2.9         1.0         1.8         0.0         0.1
    -------------------------------------------------------------------------
    Natural gas
     production
     - mcf/day         1,370       1,439       1,307       1,333       1,402
    -------------------------------------------------------------------------
    Oil production
     bbl/day              15          12          13          19          17
    -------------------------------------------------------------------------
    NGL production
     bbl/day             139         162         138         116         140
    -------------------------------------------------------------------------
    Average daily
     production
     - boe/day           383         414         369         357         390
    -------------------------------------------------------------------------
    Average selling
     price - natural
     gas $/mcf         $6.59       $7.94       $6.07       $5.17       $7.06
    -------------------------------------------------------------------------
    Average
     selling price
     - oil $/bbl      $81.85      $97.84      $86.70      $78.61      $69.99
    -------------------------------------------------------------------------
    Average
     selling price
     - NGL's $/bbl    $46.29      $52.91      $48.01      $40.26      $41.99
    -------------------------------------------------------------------------
    Average
     selling price
     - $/boe          $43.67      $51.16      $42.55      $36.51      $43.41
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                            Three Months Ended
                  Year Ended
                     March       March     December   September      June
                      31,         31,         31,         30,         30,
                     2007        2007        2006        2006        2006
    -------------------------------------------------------------------------
    Wells drilled
     - gross              27           3           6           5          13
    -------------------------------------------------------------------------
    Wells drilled
     - net               9.9         1.6         1.9         0.8         5.6
    -------------------------------------------------------------------------
    Natural gas
     production
     - mcf/day           824       1,000         865         857         574
    -------------------------------------------------------------------------
    Oil production
     bbl/day              21          15          25          23          19
    -------------------------------------------------------------------------
    NGL production
     bbl/day              93         107         114          84          67
    -------------------------------------------------------------------------
    Average daily
     production
     - boe/day           251         289         284         250         182
    -------------------------------------------------------------------------
    Average selling
     price - natural
     gas $/mcf         $6.53       $7.32       $6.85       $5.73       $5.90
    -------------------------------------------------------------------------
    Average selling
     price - oil
     $/bbl            $73.37      $66.68      $67.06      $78.64      $80.73
    -------------------------------------------------------------------------
    Average selling
     price - NGL's
     $/bbl            $35.31      $37.93      $32.86      $36.46      $33.96
    -------------------------------------------------------------------------
    Average selling
     price - $/boe    $40.55      $42.89      $40.09      $39.13      $39.58
    -------------------------------------------------------------------------
    

    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 an average of 132 boe/day of production for the
year ended March 31, 2008, up from 4 boe/day during fiscal 2007 and accounting
for most of the corporate increase in production. Subsequent to year end,
May 2008 production from Gold Creek was approximately 300 boe/day. The Gold
Creek plant has been shut down for scheduled annual maintenance and plant
turn-around for about two weeks during June 2008. Once the plant re-starts, in
early July 2008 we expect production from the area to be approximately
600 boe/day. 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 drilled 2 wells (0.8 net) at Gold Creek during the year. One
well (0.50 net) was dry and abandoned and one well (0.30 net) was successfully
completed in three different zones and placed on production during March.
Subsequent to year end, Fairmount commenced drilling 1 (0.5 net) of 2 wells
(1.0 net) planned at Gold Creek as part of our summer drilling program.
    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
to 10 drilling locations on existing Company lands.

    Harmattan

    Fairmount's Harmattan property is located approximately 105 kilometres
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 47 wells (3.8 net) at Harmattan as at
March 31, 2008 with the Company estimating 12 additional locations (1.5 net)
remain for future development drilling. Harmattan averaged 191 boe/day during
fiscal 2008 as compared to 213 boe/day during fiscal 2007 due to normal
declines from what was partly flush initial production from some new wells.
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 5 sections with an average
working interest of approximately 47.5% in the Crossfield area, north west of
Calgary. Fairmount is the operator of the Crossfield property with 2 wells
(0.78 net) on production during the year ended March 31, 2008. Production from
these two wells averaged approximately 35 boe/day for the year ended March
31, 2008 as compared to 14 boe/day for the year ended March 31, 2007.

    Thorsby

    The Thorsby property is located in West Central Alberta, approximately
32 kilometres southwest of Edmonton. Fairmount drilled a successful
exploratory well in January 2008, and as a result earned a 100% working
interest in 2 sections of land, with drilling options on additional lands. The
well was completed in 3 zones and will be placed on production during summer
2008. As part of our summer drilling program, Fairmount intends to drill 1
well (1.0 net) at Thorsby this August.

    Chin Coulee

    The Chin Coulee property is located in southern Alberta, approximately 50
kilometres east of Lethbridge. Fairmount plans to drill two wells (2.0 net) on
these lands in July, 2008. These wells are targeting oil in the Sawtooth
formation based on the Company's assessment of bypassed oil pay in other
nearby wells and geological interpretation.

    
    Financial Results and selected financial information

    -------------------------------------------------------------------------

                                            Three Months Ended
                  Year Ended
    $ except         March       March     December   September      June
    number of         31,         31,         31,         30,         30,
    shares           2008        2008        2007        2007        2007
    -------------------------------------------------------------------------
    Natural gas
     sales         3,303,683   1,039,287     729,918     633,856     900,622
    -------------------------------------------------------------------------
    Crude oil
     and natural
     gas liquids
     sales         2,808,915     888,314     714,465     565,123     641,013
    -------------------------------------------------------------------------
    Interest
     income           12,129         111       3,511       3,840       4,667
    -------------------------------------------------------------------------
    Royalties     (1,621,296)   (537,145)   (317,908)   (345,581)   (420,662)
    -------------------------------------------------------------------------
    Revenue        4,493,474   1,351,713   1,142,088     865,907   1,133,766
    -------------------------------------------------------------------------
    Production
     expenses      1,148,054     328,057     288,903     315,449     215,645
    -------------------------------------------------------------------------
    General and
     adminis-
      trative
     expenses      1,290,150     303,737     247,875     344,248     394,290
    -------------------------------------------------------------------------
    Depletion,
     depreciation
     & accretion   3,296,528     907,170     834,993     764,453     789,912
    -------------------------------------------------------------------------
    Interest
     expense         656,560     176,920     164,867     179,169     135,604
    -------------------------------------------------------------------------
    Net income
     (loss) before
     income
     taxes        (2,197,035)   (408,837)   (463,674)   (820,840)   (503,684)
    -------------------------------------------------------------------------
    Recovery of
     future income
     taxes         1,402,166   1,402,166           -           -           -
    -------------------------------------------------------------------------
    Net income
     (loss)         (794,869)    993,329    (463,674)   (820,840)   (503,684)
    -------------------------------------------------------------------------
    Net income
     (loss) per
     share
      - basic         $(0.05)      $0.06      $(0.03)     $(0.06)     $(0.04)
    -------------------------------------------------------------------------
      - diluted       $(0.05)      $0.06      $(0.03)     $(0.06)     $(0.04)
    -------------------------------------------------------------------------
    Weighted
     average
     common
     shares
     outstanding:
    -------------------------------------------------------------------------
      - Basic     15,008,384  17,241,614  15,457,889  13,671,889  13,671,889
    -------------------------------------------------------------------------
      - Diluted   15,008,384  17,241,614  15,457,889  13,671,889  13,671,889
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                            Three Months Ended
                  Year Ended
    $ except         March       March     December   September      June
    number of         31,         31,         31,         30,         30,
    shares           2007        2007        2006        2006        2006
    -------------------------------------------------------------------------
    Natural gas
     sales         1,963,461     658,422     545,097     451,908     308,034
    -------------------------------------------------------------------------
    Crude oil
     and natural
     gas liquids
     sales         1,751,500     455,324     501,836     447,225     347,115
    -------------------------------------------------------------------------
    Interest
     income           44,324       6,956       3,120       1,212      33,036
    -------------------------------------------------------------------------
    Royalties       (819,097)   (321,739)   (183,887)   (153,217)   (160,254)
    -------------------------------------------------------------------------
    Revenue        2,971,815     806,166     873,118     752,819     539,712
    -------------------------------------------------------------------------
    Production
     expenses        758,662     262,958     207,473     168,924     119,307
    -------------------------------------------------------------------------
    General and
     adminis-
      trative
     expenses        781,288     220,661     170,267     231,169     159,191
    -------------------------------------------------------------------------
    Depletion,
     depreciation
     & accretion   1,967,084     569,914     517,116     536,860     343,194
    -------------------------------------------------------------------------
    Interest
     expense          80,220      21,405      23,049      28,786       6,980
    -------------------------------------------------------------------------
    Net income
     (loss) before
     income taxes   (907,405)   (376,085)   (116,835)   (284,342)   (130,143)
    -------------------------------------------------------------------------
    Recovery of
     future income
     taxes          1,475,074  1,475,074           -           -           -
    -------------------------------------------------------------------------
    Net income
     (loss)          567,669   1,098,989    (116,835)   (284,342)   (130,143)
    -------------------------------------------------------------------------
    Net income
     (loss) per
     share
      - basic          $0.05       $0.08      $(0.01)     $(0.03)     $(0.01)
    -------------------------------------------------------------------------
      - diluted        $0.05       $0.08      $(0.01)     $(0.03)     $(0.01)
    -------------------------------------------------------------------------
    Weighted
     average
     common
     shares
     outstanding:
    -------------------------------------------------------------------------
      - Basic     12,208,889  13,671,889  12,949,824  11,116,889  11,116,889
    -------------------------------------------------------------------------
      - Diluted   12,460,796  13,920,761  12,949,824  11,116,889  11,116,889
    -------------------------------------------------------------------------
    

    Reconciliation of cash flow from operations to net income (loss):

    The terms "cash flow" or "cash flow from operations" as used below do not
have any standardized meaning prescribed by GAAP and should not be considered
an alternative to, or more meaningful than, cash flow from operating
activities or net income (loss) as determined in accordance with GAAP as an
indicator of the Company's performance. In addition, the Company's
determination of cash flow from operations may not be comparable to that
reported by other companies. The reconciliation between net income (loss) and
cash flow from operations is set out below. Fairmount believes this measure is
meaningful because it is an indicator of funding sources for on-going efforts
to replace production volumes and increase reserve volumes. The Company also
presents cash flow from operations per share which is calculated using the
same methodology as earnings per share; however this measurement also does not
correspond to GAAP.

    
    -------------------------------------------------------------------------
                                            Three Months Ended
                  Year Ended
    $ except         March       March     December   September      June
    per share         31,         31,         31,         30,         30,
    amounts          2008        2008        2007        2007        2007
    -------------------------------------------------------------------------
    Net Income
     (loss)         (794,869)    993,329    (463,674)   (820,840)   (503,684)
    Depletion,
     depreciation
     and
     accretion     3,296,528     907,170     834,993     764,453     789,912
    Stock-based
     compensation    299,217      44,666      69,124      83,428     101,999
    Loss on
     forward
     commodity
     contracts        44,350      44,350           -           -           -
    Future income
     taxes
     (recovery)   (1,402,166) (1,402,166)          -           -           -
    -------------------------------------------------------------------------
    Cash flow
     from
     operations    1,443,060     587,349     440,443      27,041     388,227
    -------------------------------------------------------------------------
    Cash flow per
     common share:
    -------------------------------------------------------------------------
      - Basic          $0.10       $0.03       $0.03       $0.00       $0.03
    -------------------------------------------------------------------------
      - Diluted        $0.10       $0.03       $0.03       $0.00       $0.03
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                            Three Months Ended
                  Year Ended
    $ except         March       March     December   September      June
    per share         31,         31,         31,         30,         30,
    amounts          2007        2007        2006        2006        2006
    -------------------------------------------------------------------------
    Net Income
     (loss)          567,669   1,098,989    (116,835)   (284,342)   (130,143)
    Depletion,
     depreciation
     and
     accretion     1,967,084     569,914     517,116     536,860     343,194
    Stock-based
     compensation    291,966     107,313      72,048      71,422      41,183
    Future income
     taxes
     (recovery)   (1,475,074) (1,475,074)          -           -           -
    -------------------------------------------------------------------------
    Cash flow
     from
     operations    1,351,645     301,142     472,329     323,940     254,234
    -------------------------------------------------------------------------
    Cash flow per
     common share:
    -------------------------------------------------------------------------
      - Basic          $0.11       $0.02       $0.04       $0.03       $0.02
    -------------------------------------------------------------------------
      - Diluted        $0.11       $0.02       $0.04       $0.03       $0.02
    -------------------------------------------------------------------------
    

    Forward - Looking Information

    This news release contains forward-looking information, including but not
limited to estimated reserves and future net revenues, future exploration and
development plans and anticipated production levels. Information relating to
reserves and related future net revenue has been independently evaluated by
GLJ Petroleum Consultants Ltd. and is forward-looking information as it
involves the implied assessment, based on certain estimates and assumptions,
that the reserves described can be profitably produced in the future.
Additionally, estimates of future net value involve assumptions relating to
production rates, commodity prices and exchange rates, operating costs,
capital expenditures and well abandonment costs. This information relates to
future events or the Company's future performance. All statements and
information other than statements 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. Forward looking information
relating to reserves and future net revenue are estimates only. Actual
reserves and future net revenues will differ from those estimated by GLJ
Petroleum Consultants Ltd. and such differences may be material. 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 is
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 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
(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. Present values of future
net revenue do not represent fair market value of Fairmount's reserves.

    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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