Forest Gate Energy Announces Non-Brokered Private Placement - issues common shares to settle convertible debt


CALGARY, May 11 /CNW Telbec/ - Forest Gate Energy Inc. (TSXV: FGE) announces that it will be undertaking a non-brokered private placement whereby the Company intends to raise up to $300,000 through the issuance of oil and gas "flow-through" units (the "Units") at a price of $0.08 per Unit.

Each Unit is comprised of one "flow-through" common share in the share capital of the Corporation and one common share purchase warrant of the Corporation, with each warrant entitling the holder thereof to acquire one additional common share in the share capital of the Corporation at an issue price of $0.18 per share for a period of two years. The Units will be issued pursuant to applicable prospectus and registration exemptions and will be subject to a four-month hold period.

The Company may pay, where appropriate, commissions and finder's fees in connection with this private placement, in accordance with applicable securities laws and the rules of the TSX Venture Exchange.

It is anticipated that this financing will be completed on or prior to close of business on May 16, 2011. This financing is subject to the usual regulatory approvals.

The proceeds will primarily be used to incur eligible expenditures on Forest Gate's oil and gas properties situated in Canada.

The Corporation has also issued a total of 5,405,400 common shares to Jones, Gable & Company Limited in order to pay the principal amount of $675,675 owing under a convertible debenture that the Corporation issued in January 2010.  The shares were issued at the conversion price provided for in the convertible debenture, namely $0.125 per share.  The Corporation expects to issue, subject to the prior acceptance of the TSX Venture Exchange, up to an additional 712,000 common shares at an issue price of $0.125 per share in order to pay a portion of the accrued and unpaid interest on the foregoing debenture.

As a result of the issuance of the common shares to Jones, Gable, the Corporation has 64,686,464 common shares issued and outstanding.

About Forest Gate

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 Corporation 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.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to United States Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

This news release is not for distribution to United States newswire services or for dissemination in the United States.

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.


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