/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, Aug. 22 /CNW/ - Fairmount Energy Inc. ("Fairmount" or the
"Company") (TSX-V - FMT) is pleased to announce the sale of its working
interests in the Harmattan and Crossfield areas of Alberta for aggregate gross
proceeds of $14,250,000. The Company's share of production from these
properties was approximately 210 barrels of oil equivalent per day.
Harmattan Property Sale
Fairmount has entered into a letter agreement with a major Canadian
energy trust to sell its non-operated working interest of approximately 8% in
47 wells in the Harmattan area for cash proceeds of $12,000,000 before closing
adjustments. The sale has an effective date of August 1, 2008, is subject to
the execution of a definitive agreement and customary due diligence
procedures, and is anticipated to close in mid-September.
Crossfield Property Sale
In a separate transaction, on August 14, 2008 the Company completed the
sale of its interests in the Crossfield area effective June 1, 2008 to a major
Canadian energy trust for $2,250,000 before closing adjustments.
The sale of the Harmattan and Crossfield properties represents completion
of Fairmount's full cycle business model with respect to these two properties.
Over the past four years, Fairmount participated in the drilling and the
construction of infrastructure to bring these properties onto production and
create reserve value. The exploration and development opportunity for these
properties was fulfilled and their reserve value confirmed through production
history. As mature long life producing assets, these assets no longer fit with
the Company's high growth business model. The sale of these properties allows
Fairmount to extinguish current borrowings under its operating line of credit
in the short term and redeploy this capital for exploration and development
opportunities in the Company's higher growth focus areas.
Fairmount is an emerging junior oil and gas exploration, development and
production company with oil and gas properties located in Alberta, Canada.
Fairmount trades on the TSX Venture Exchange as FMT and currently has
17,184,389 common shares outstanding.
Additional information regarding Fairmount can be found at their website
www.fairmountenergy.com and on Sedar at www.sedar.com.
Disclosure provided herein in respect of production reported in barrels
of oil equivalent (boe) may be misleading, particularly if used in isolation.
A boe conversion ratio of six thousand cubic feet of natural gas to one barrel
of crude oil is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
Forward - Looking Information
This news release contains forward-looking information, including but not
limited to the anticipated sale of the Harmattan Property and future
exploration and development plans. This information relates to future events
or the Company's future performance. All statements other than statements of
historical fact are forward-looking information. 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.
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 news release include, but are
not limited to failure to negotiate a mutually acceptable definitive agreement
for the Harmattan property sale; 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
news release to conform such information to actual results or to changes in
the Company's expectations.
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) 350-0440;
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