Fairmount announces increased production and increased bank lines


    CALGARY, Feb. 19 /CNW/ - Fairmount Energy Inc. ("Fairmount" or the
"Company") (TSX-V - FMT) is pleased to provide the following updates.

    Current production update

    The Company estimates total current production from all areas at
approximately 635 boe/day with a further 145 boe/day behind pipe awaiting
completion of tie in operations in Gold Creek.

    Gold Creek Facilities Expansion Complete - Increased production at Gold

    The previously announced expansion of the compression facilities at Gold
Creek is now complete and running resulting in Fairmount and its partners
owning gathering and compression facilities sufficient to process
12.5 mmcf/day of raw gas from its current and future wells in the Gold Creek
    The completion of the facility expansion will allow Fairmount to increase
production at Gold Creek by 420 boe/day (net) to bring total production at
Gold Creek to approximately 550 boe/day (net) by the end of February.

    Gold Creek Drilling Program Update

    The Gold Creek area is located on the southern flank of the Peace River
Arch, near Grande Prairie, Alberta. Fairmount has working interests ranging
from 30% to 84% in 13.75 contiguous sections of land in the Gold Creek area.
Fairmount is the operator of all of its existing Gold Creek wells. Based on
the results of the seven wells drilled to date on this property, geologic
mapping, and/or 3D seismic, Fairmount has identified an additional six
drilling locations on existing Company lands.
    Fairmount commenced a 3 well (1.0 net) drilling program at Gold Creek in
November 2007. To date, two wells have been drilled with one well (0.50 net)
being dry and abandoned and one well (0.30 net) being successfully completed
in three different zones. The successful well tested at a combined flow rate
of 900 mcf/day plus 60 bbl/day of natural gas liquids. Construction of the tie
in for this well is underway with production anticipated by the end of
    The Company is not the operator of the third well planned for this
program but it is anticipated the well will be drilled during March 2008.

    New area exploration success

    Fairmount is pleased to report it has successfully drilled and completed
a prospective natural gas well in a new area in central Alberta. Additional
drilling is planned after spring break up to delineate this discovery.

    Increase in bank lines

    Fairmount is pleased to announce it has amended its revolving operating
demand loan with a Canadian chartered bank providing an increase in the line
to $14,000,000 (previously $10,000,000) in funds for general corporate
purposes, including capital expenditures.
    In addition to the operating demand loan, Fairmount also has a
non-revolving acquisition and development demand loan for up to $4,000,000
with the same Canadian chartered bank. This facility is available to Fairmount
for the acquisition of producing petroleum and natural gas reserves and/or the
development of proved non-producing or undeveloped petroleum and natural gas
    Security for the loans includes a General Assignment of Book Debts and
floating charge over all of the assets of the Company with the bank having the
option to receive fixed charges on producing properties upon request. Both
loans are subject to an annual review by August 1, 2008.

    About Fairmount

    Fairmount is an emerging junior oil and gas exploration, development and
production company with oil and gas properties located in Alberta, Canada.
Additional information regarding Fairmount can be found at their website
www.fairmountenergy.com and on sedar at www.sedar.com.

    Forward-Looking Statements

    This press release contains forward-looking statements, including but not
limited to future exploration and development plans and anticipated production
levels. These statements relate to future events or the Company's future
performance. All statements other than statements of historical fact are
forward-looking statements. In some cases, forward-looking statements can be
identified by terminology such as "may", "will", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "potential", "continue", or
the negative of these terms or other comparable terminology. By its nature,
forward-looking information involves numerous assumptions, known and unknown
risks and uncertainties, both general and specific, that contribute to the
possibility that the predictions, forecasts, projections and other
forward-looking statements will not occur. Forward-looking statements are
based on assumptions, including, among other things, the Company's ability to
benefit from the combination of growth opportunities and the ability to grow
through the capital markets; the Company's acquisition strategy, the criteria
to be considered in connection therewith and the benefits to be derived
therefrom; sustainability and growth of production and reserves through
prudent management and acquisitions; the emergence of accretive growth
opportunities; the impact of Canadian governmental regulation on the Company;
the strategy of the Company regarding commodity price risk management, changes
in oil and natural gas prices and the impact of such changes on financial
performance; the level of capital expenditures devoted to development activity
rather than exploration; the use of development activity and/or acquisitions
to replace and add to reserves; the quantity of oil and natural gas reserves
and oil and natural gas production levels; and currency, exchange and interest
    Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, there can be no assurance that such
expectations will prove to be correct. The Company can not guarantee future
results, levels of activity, performance, or achievements. Moreover, neither
the Company nor any other person assumes responsibility for the accuracy and
completeness of the forward-looking statements. Some of the risks and other
factors, some of which are beyond the Company's control, which could cause
results to differ materially from those expressed in the forward-looking
statements contained in this press release include, but are not limited to,
general economic conditions in Canada, the United States and globally;
industry conditions, including fluctuations in the price of crude oil, natural
gas and natural gas liquids and services used by the Company; uncertainties
associated with estimating reserves; royalties payable in respect of oil and
gas production; governmental regulation of the oil and gas industry, including
income tax and environmental regulation; fluctuation in foreign exchange or
interest rates; stock market volatility and market valuations; the impact of
environmental events; the need to obtain required approvals from regulatory
authorities; unanticipated operating events which can reduce production or
cause production to be shut-in or delayed; failure to obtain industry partner
and other third party consents and approvals, when required; and third party
performance of obligations under contractual arrangements. Subject to the
company's obligations under applicable securities laws, the Company is not
under any duty to update any of the forward-looking statements after the date
of this press release to conform such statements to actual results or to
changes in the Company's expectations.

    Per barrel of oil equivalent amounts have been calculated using a
conversion rate of six thousand cubic feet of natural gas to one barrel of oil
equivalent (6:1). Barrel of oil equivalents ("boe") may be misleading,
particularly if used in isolation. A boe conversion of ratio 6 mcf:1 bbl is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.

For further information:

For further information: Joseph S. Durante, President and CEO,
JDurante@Fairmountenergy.com, Phone (403) 355-0440; or Ryan A. Michaluk, VP
Finance and CFO, RMichaluk@Fairmountenergy.com, Phone (403) 350-0440;
Fairmount Energy Inc., 2200, 520 - 5th Avenue, SW, Calgary, Alberta, T2P 3R7,
Phone: (403) 355-0440, Fax: (403) 355-0465; Visit us at our website

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