Shares outstanding: 25 Million
Symbol & exchange: FGE-V
MONTREAL, Feb. 8 /CNW Telbec/ - Forest Gate Energy Inc. reports that it has entered into an exclusive option agreement with a private Denver, Colorado-based oil company to acquire a 50% interest in oil licenses in the state of Utah, consisting of approximately 135,505 gross acres and 37,264 net acres for an amount of US $1,200,000. Forest Gate's exclusive option expires on March 31, 2010.
This land package covers a vast area with significant exploration potential, including at least 8 drilling prospective areas for oil and gas. The prospectivity has been determined on the basis of nearby producing field analogs, adjacent well discoveries and shows, 2D and 3D seismic data of good quality, surface geological mapping and the integration of the complete database into a geological framework.
This option acreage contains shallow reservoirs, which are thick, good porosity sandstones of the Cretaceous and Jurassic age, which occur in a variety of trapping scenarios in a depth range of 3,000 to 4,000 feet. They occur as lenses draping over structural anticlines, as eolian (sand dunes) and as wedges tapering up against faults or salt walls. Multiple targets can be intersected with a single well location. The identified prospects offer low-risk and low-cost opportunities for the discovery of large reserves of oil.
There are also several deeper potential plays at depths of 5,000 to 16,000 feet. These include a Granite Wash play (eroded granite, which has been redeposited as a sedimentary unit), several carbonates (reef, shelf, limestone), algal mounds, and an over-pressured fractured shale. These are older formations, including Mississippian, and all have productive analogs. These concepts represent somewhat higher risk than the shallower tier but offer the potential of large reserves, particularly gas.
Completion of this transaction would bring Forest Gate's total land holding in the area to 256,505 gross acres and 69,419 net acres.
"Recent drilling activity by Delta Oil & Gas and Golden State Resources underlines the emerging potential in the area", said Don Vandergrift, Forest Gate's President and Chief Operating Officer. "A large acreage spread, coupled with available technical data and identification of play concepts with drilling prospects, provides Forest Gate a unique opportunity in this relatively under-explored area of the U.S."
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.
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, email@example.com; www.forestgate.ca