Forest Gate Energy Closes $1,141,000 Financing

    
    Shares outstanding:  25 Million
    Symbol & exchange:   FGE-V
    

MONTREAL, Jan. 15 /CNW Telbec/ - Forest Gate Energy Inc. ("Forest Gate" or the "Company") reports that it has completed a non-brokered private placement and has issued 5,160,000 units ("Unit") at a price of $0.10 per Unit, for total gross proceeds of $516,000. Total shares outstanding following this private placement will be 24,597,233.

Each Unit consists of one common share ("Share") and one half common share purchase warrant allowing the holder to subscribe for one Share at a price of $0.20 for a period of two years from the subscription date ("Warrant"). The Units will be subject to a four-month hold period.

Insiders of the Company subscribed for 1,205,000 Units, for total net proceeds of $120,500. These subscriptions are exempt from the valuation and minority shareholder approval requirements of Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (the "Regulation") under paragraphs 5.5(b) and 5.7(1)(a) of the Regulation, as the Company is not listed on any market specified in the Regulation and the fair market value of the Units issued to insiders does not exceed 25% of the Company's market capitalization.

The Company paid $2,500 in commissions and finder's fees, and issued 25,000 broker Warrants in connection with this private placement, in accordance with the rules and regulations of the TSXV.

Additionally, the Company issued a convertible debenture to Jones, Gable & Company Limited for a principal amount of $675,675 and net proceeds of $625,000 at an interest rate of 10% per annum. The debenture is convertible into Forest Gate common shares at a conversion price of $0.125. Any outstanding principal amount together with accrued but unpaid interest are payable by the Company one year from closing date in equity or cash at the Company's discretion. 25% of the net proceeds in excess of $500,000 of any future financing will be used to redeem this debenture.

The Company intends to utilize the proceeds from the private placement and convertible debenture to finance the Company's operations in Utah and for working capital purposes.

On other news, the Company was granted an option by a Denver based company with regards to Forest Gate's potential acquisition of various oil and gas licenses in Utah. The option was granted in consideration for $50,000 payable to the vendor by the issuance of 344,827 Forest Gate common shares.

About Forest Gate Energy

Forest Gate Energy Inc. is a publicly listed oil & gas exploration and production company trading on the TSX Venture Exchange under the symbol FGE with 25 million shares outstanding. The Company is seeking to increase shareholder value through participation and development of oil & gas exploration and production projects in Canada and internationally.

FORWARD-LOOKING STATEMENTS

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 forward-looking statements.

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 authorities.

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 release. This transaction is subject to TSX Venture Exchange Approval.

SOURCE Forest Gate Energy Inc.

For further information: For further information: Robert Kramberger, V-P, Investor Relations, 1-866-666-3040, rkramberger@forestgate.ca; www.forestgate.ca

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Forest Gate Energy Inc.

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