FairWest acquires indebtedness of Strike Petroleum Ltd. from lender effective August 19, 2008

    CALGARY, Aug. 20 /CNW/ - FairWest Energy Corporation ("FairWest") is
pleased to announce effective August 19, 2008, FairWest and its 100%
subsidiary Strike Petroleum Ltd. ("Strike") have closed a settlement agreement
("Settlement Agreement") with Strike's secured lender ("Lender"). FairWest has
acquired Strike's secured indebtedness from the Lender for cash of
$4.25 million, equity and other consideration. The equity portion included
5.0 million FairWest common shares issued at $0.15 per share and 5.0 million
warrants exercisable at $0.20 for 24 months following closing.
    FairWest set a goal to have a debt to projected cash flow ratio of
1.5 to 1 by December 31, 2008. Net debt at June 30, 2008 was $19 million. The
Settlement Agreement closed on August 19, 2008 reduces FairWest's net debt to
$14.4 million. Sales of non producing assets in progress are expected to
result in FairWest achieving this debt to projected cash flow goal by
September 30, 2008.
    FairWest has sufficient cash flow and bank lines to focus on production
growth for the balance of 2008. Our goal is to exit December 31, 2008 at
1,100 barrels of oil equivalent per day. Cash flow from the Strike properties
in core areas of Kirkpatrick Lake and Youngstown is now available to implement
optimization strategies on the lands instead of being directed to service
Lender debt.
    The Settlement Agreement will significantly reduce FairWest's interest
payments on a consolidated basis. Management is now free to focus on
production growth and informing the investment community that FairWest is a
well financed value player in East Central, Alberta

    FairWest (TSX: FEC) is a Calgary, Alberta based junior oil and gas
company engaged in the acquisition, exploration, development and production of
crude oil and natural gas in the provinces of Alberta and Saskatchewan.

    Statements in this release which describe FairWest's intentions,
expectations or predictions, or which relate to matters that are not
historical facts are forward-looking statements. These forward-looking
statements involve known and unknown risks and uncertainties which may cause
the actual results, performances or achievements of FairWest to be materially
different from any future results, performances or achievements expressed in
or implied by such forward-looking statements. FairWest may update or revise
any forward-looking statements, whether as a result of new information, future
events or changing market and business conditions.

For further information:

For further information: FairWest Energy Corporation, James G. Gettis,
President and Chief Executive Officer; Marion D. Mackie, Chief Financial
Officer, Telephone: (403) 264-4949, Facsimile: (403) 269-1761

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