SHARES OUTSTANDING: 142 MILLION
SYMBOL & EXCHANGE: FGT-V
MONTREAL, July 29 /CNW Telbec/ - Forest Gate Resources Inc. ("Forest
Gate") reports that it has received a second Notice of Default concerning its
Celtic Sea project for its failure to pay a second cash call within a
specified period of time in accordance with the Celtic Sea Joint Operating
Agreement ("JOA") dated June 29, 2007. This follows a previous news release
dated July 4, 2008 whereby Forest Gate reported the receipt of its first
Notice of Default for its failure to pay its June 3, 2008 cash call in
accordance with the JOA.
Under the terms of the JOA, Forest Gate has sixty days from the notice
date of July 3, 2008 to remedy the first default by paying the full amount of
its June 3, 2008 cash call to the Operator. As Forest Gate has now received a
second cash call and expects to receive additional cash calls for a total
amount estimated at approximately $13 million in order for Forest Gate to
fulfill its 7.5% commitment to this summer's drill program, Forest Gate will
only be in a position to remedy its default status if it is able to raise the
full amount before the end of the default period. In the event that the
default continues for more than sixty days, Forest Gate will forfeit its
interest in the Celtic Sea project.
"Forest Gate will continue its efforts to fund its interest in the Celtic
Sea project until the last day of the default period, September 3, 2008.
However, provided we are unable to raise the full amount required to fund our
commitment to this summer's drill program, we think it would be imprudent to
make the initial smaller cash calls knowing that much larger cash calls are
imminent," said Michael Judson, President and CEO of Forest Gate.
"Notwithstanding the Celtic Sea project, Forest Gate is in a strong financial
position with approximately $1.5 million in the bank allowing Forest Gate to
fund its Alberta drilling projects and producing assets. Whatever the outcome
may be, I see a strong and positive future for Forest Gate in the oil & gas
Forest Gate continues to produce oil and natural gas in Alberta with
partner Emerald Bay Energy, which now generates cash flow for Forest Gate.
Forest Gate has recently raised flow through funds which will be used to fund
its 38% interest in the drilling of the Kelsey exploration well, which will be
drilled in the coming weeks. There is also the possibility that additional
wells will be drilled in Alberta with partner Emerald Bay Energy in the coming
months. These possibilities are currently being reviewed.
About the Company
Forest Gate Resources Inc. is an international oil & gas exploration
company. The company is seeking to increase shareholder value through
participation and development of oil & gas exploration and production projects
in Ireland and Canada. The Company's shares trade under the symbol FGT on the
TSX Venture Exchange.
About Forward-Looking Information and Statements
This news release contains forward-looking statements, within the meaning
of applicable securities laws, that address goals, expectations or projections
about the future. The use of any of the words "expect," "anticipate,"
"continue," "estimate," "objective," "ongoing," "may," "will," "project,"
"should," "believe," "plans," "intends," "might," and similar expressions are
intended to identify forward-looking information or statements. In particular,
but without limiting the foregoing, this news release contains forward-looking
statements with regard to cash flow, capital spending, debt and debt
repayment, strategic alternatives, drilling opportunities and business plans.
The forward-looking information and statements included in this news release
are not guarantees of future performance and should not be unduly relied upon.
The forward-looking statements contained in this news release are based
on Forest Gate's current goals, expectations, estimates, assumptions and
projections and involve a number of risks and uncertainties that could cause
actual results to differ materially from those anticipated and described in
the forward-looking statements. Such risks and uncertainties include, without
limitation: volatility in market prices for oil and natural gas; volatility or
fluctuation in oil and natural gas production levels; volatility in currency
exchange rates; liabilities and risks inherent in oil and natural gas
operations, including geological, technical, drilling and processing problems;
uncertainties associated with estimating reserves; competition for, among
other things, capital, acquisitions, reserves, undeveloped land and skilled
personnel; incorrect assessments of the value of acquisitions; Forest Gate's
success at the acquisition, exploration and development of reserves; changes
in market, economic and business conditions; and actions by governmental or
regulatory authorities including changes in tax laws or incentive programs.
The foregoing list of assumptions, risks and uncertainties is not exhaustive.
Additional information on these and other factors which could affect
operations or financial results are included under the heading "Risk Factors"
in Forest Gate's Annual Information Form as filed under Forest Gate's profile
on www.sedar.com. Additional information may also be found in Forest Gate's
other reports on file with Canadian securities regulatory authorities.
The forward-looking statements included in this news release speak only
as of the date of this news release, and Forest Gate assumes no obligation to
publicly update or revise them to reflect news events or circumstances, except
as may be required pursuant to applicable laws.
For further information:
For further information: Robert Kramberger, V-P, Investor Relations,
1-866-666-3040, email@example.com, www.forestgate.ca