SYMBOL & EXCHANGE: FGE-TSXV
MONTREAL, July 14 /CNW Telbec/ - Forest Gate Energy Inc. reports that it has reached an agreement with Vanterra Energy LLC of Denver Colorado, whereby Vanterra will return to Forest Gate 3,596,053 Forest Gate common shares, 4,343,947 subscription receipts and 7,550,000 common share purchase warrants of Forest Gate in exchange for the 70% interest in certain oil and gas leases vended-in to the company in late 2009 and in January of this year. Vanterra is a private company owned by Donald Vandergrift. Mr. Vandergrift is a former President of Forest Gate Energy.
The Vanterra land package comprises oil and gas leases in the states of Utah and Arizona. Please refer to Forest Gate's news releases dated October 13, 2009, December 9, 2009, January 19, 2010 and February 8, 2010 for more information on these properties.
"Funding oil and gas exploration in Utah and Arizona has proved particularly challenging in the current economic climate and the departure of Mr. Vandergrift as President of Forest Gate created a technical need that the corporation has been unable to fulfil," said Michael Judson, Chairman and President of Forest Gate. "In the near term, there is an opportunity to acquire oil producing assets in Canada, as well as diversifying into mineral exploration and mining."
"The synergies that the corporation expected to realize with the acquisition of the Utah and Arizona oil and gas leases from Vanterra never materialized, and the departure of Mr. Vandergrift made it abundantly clear that it was time for Forest Gate to explore other avenues while at the same time re-focusing its energies on its existing properties," added Mr. Judson. "The Board of Directors of Forest Gate unanimously approved the proposed transaction with Vanterra and believes that the corporation will be better positioned to pursue other opportunities once the transaction is unwound and the securities issued to Vanterra are returned for cancellation."
The proposed transaction is subject to corporate and regulatory approvals, including that of the TSX Venture Exchange.
Forest Gate currently has a working interest in three Alberta oil and gas properties: (i) Ferrybank - one oil producing well, (ii) Nevis - four natural gas producing wells, and (iii) Kelsey - one natural gas producing well. Combined, these wells produce approximately 40 barrels of oil equivalent per day net to Forest Gate.
Forest Gate's additional current assets include its 100% owned East Side and West Side diamond properties at Fort a la Corne, near Prince Albert, Saskatchewan. The Fort a la Corne kimberlite field is the largest of its kind in the world.
About Forest Gate Energy
Forest Gate Energy Inc. is a publicly-listed oil and gas exploration and production, and non-energy resource company trading on the TSX Venture Exchange under the symbol FGE. The Company is seeking to increase shareholder value through participation and development of energy and other resources in Canada and internationally.
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.
SOURCE Forest Gate Energy Inc.
For further information: For further information: Robert Kramberger, V-P, Investor Relations, 1-866-666-3040, email@example.com; www.forestgate.ca