FairWest Energy Corporation Announces Financial and Operating Results for Third Quarter 2007

    TSX: FEC

    CALGARY, Nov. 14 /CNW/ - FairWest Energy Corporation ("FairWest")
(TSX:FEC) presents its consolidated financial statements including the
accounts of its wholly owned subsidiary Strike Petroleum Ltd. ("Strike") from
the May 23 2007 date of acquisition and the wholly owned partnership Neuberry
Limited Partnership ("Neuberry").

    A summary of operational and financial highlights for the three months
and nine months ended September 30, 2007 and September 30, 2006 follows:

                                Three Months ended         Nine Months ended
    Financial Highlights              Sept. 30,                 Sept. 30,
                                 2007         2006         2007         2006
                                    $            $            $            $

    Petroleum and natural
     gas sales, net of
     royalties              2,169,122    1,236,102    4,675,182    3,161,249
    Other income              634,768            -      665,793      347,894
    Total revenue           2,803,890    1,236,102    5,340,975    3,509,143
    Depletion, depreciation
     and amortization       2,177,154      714,978    5,113,482    2,134,592
    Operating               1,004,415      487,706    2,052,903    1,276,775
    Interest                  425,679       76,230      702,858      185,190
    General and
     administrative           394,003       46,997    1,234,064      573,756
     compensation             106,066      114,418      265,128      186,756
    Part XII.6 tax             12,927        1,281       69,965       77,516
    Loss on sale asset        378,958            -      378,958            -
    Future income tax
     (recovery)              (158,401)      75,027   (1,642,460)  (1,791,434)
    Total expenses          4,340,801    1,516,637    8,174,898    2,643,151
    Net income (loss)      (1,536,911)    (280,535)  (2,833,923)     865,992

    Funds flow from
     operations               966,866      623,888    1,281,185    1,048,011
    Capital expenditures    7,052,703    4,339,276   30,560,193    5,700,871

    Basic earnings (loss)
     per share                  (0.02)      (0.005)       (0.04)       0.016
    Diluted earnings (loss)
     per share                  (0.02)      (0.005)       (0.04)       0.016

    Share Data:
      Common shares
       outstanding         90,242,379   60,962,044   90,242,379   60,962,044
      Warrants                      -    3,000,000            -    3,000,000
      Options               7,803,748    5,899,116    7,803,748    5,899,116

                                Three Months ended         Nine Months ended
    Highlights of Operations          Sept. 30,                 Sept. 30,
                                 2007         2006         2007         2006
    Natural gas
    Natural gas sales
     before royalties($)    1,798,413      684,720    4,524,990    2,308,149
    Volume - mcf              295,157      117,637      662,105      346,912
    Volume - mcf/day            3,208        1,279        2,425        1,271
    $/mcf                        6.09         5.82         6.83         6.65
    Oil and NGLs
    Oil and NGL sales
     before royalties($)      551,680      279,390      939,799      905,986
    Volume - bbl                8,295        4,261       15,032       14,445
    Volume - bbl/day               90           46           55           53
    $/bbl                       66.51        65.57        62.52        62.72
    Barrel of oil equivalent
    Total sales before
     royalties($)           2,350,093      964,110    5,464,789    3,214,135
    Volume - boe               57,488       23,867      125,383       72,264
    Volume - boe/day              625          259          459          265
    $/boe                       40.88        40.40        43.58        44.48
    (1) Includes operations of Strike from May 23, 2007 (131 days).
    (2) Includes operations of NLP from August 2, 2007 (60 days)

    The third quarter 2007 was a successful and positive period for the
FairWest team. In addition to the completion of the Strike Petroleum Ltd.
acquisition, FairWest also completed an acquisition of assets in its core
areas. Both of these acquisitions represent strategic opportunities that make
financial and operational sense for FairWest and its shareholders. By applying
FairWest's exploitation cycle to existing and new assets, FairWest has seen a
36% increase in production in the third quarter from the prior three month
period. Activity in the fourth quarter continues, and continued successes
during the balance of the year are anticipated.

    Production and Revenue

    Average daily production during the quarter increased to 625 barrels of
oil equivalent per day ("boe/d") from 458 boe/d in the prior three month
period, representing a 36% increase. Production was comprised of 3,208
thousand cubic feet per day ("mcf/d") of natural gas and 90 barrels per day
("bbls/d") of oil and natural gas liquids. At mid-November, production volumes
have increased to approximately 725 boe/d.

    The substantial increase in production is primarily attributable to:

    - the May 23, 2007 acquisition of Strike. FairWest has farmed in on
    Strike lands and has completed extensive workovers on the Strike wells in
    the second and third quarters, resulting in increased production; and

    - a $4.2 million core area asset acquisition completed on August 15, 2007
    and subsequent optimization work on an oil-producing property that was
    part of the acquisition. During the period, an additional 12 wells were
    brought on production that had previously been shut in.

    FairWest's commodity mix for the third quarter was 85% natural gas and 15%
crude oil and natural gas liquids, compared to 91% and 9% respectively in the
last quarter. This change in commodity mix is due primarily to the core area
asset acquisition. Due to strong crude oil commodity prices, crude oil and
natural gas liquids revenues represented 23% of total sales before royalties
during the period. FairWest received an average $66.51 per barrel of oil and
natural gas liquids and $6.09 per mcf for natural gas during the period
compared to $59.72 and $7.29 respectively during the prior period. Total sales
before royalties was $2,350,093.


    Five wells were drilled in the third quarter, resulting in one oil well
that is already on production and three gas wells that are currently being
tied in for production by December 1, 2007. The fifth well is currently being
    FairWest incurred $1,004,415 in operating costs that included optimization
costs on acquired assets. Many of the costs incurred during the quarter were
well servicing and repair costs on Strike wells that had been neglected for
several years and needed maintenance. Some of these were one time costs.
Operating costs on a $/boe basis decreased to $17.47 from $20.43 per boe and
FairWest anticipates a continued decline in per unit costs during the fourth
quarter with increasing production.

    Financial Outlook:

    FairWest has entered into an agreement to sell its interest in a net
smelter return royalty ("NSR Royalty") in the Benso property in Ghana, Africa.
This non-oil & gas asset was previously valued at $2,172,323. The proceeds of
$1,875,000 US from this sale are being held in escrow pending finalization of
registration in Ghana. Closing is expected to occur by November 30, 2007.
FairWest wrote down the asset by $378,958 during the quarter based on the sale
price and estimated closing costs of $75,000 US.
    At September 30, 2007 FairWest had a working capital ratio of 0.87 which
is less than 1.0 as calculated using the bank's compliance certificate form.
The Company has asked the bank for a waiver in respect of this default and
anticipates that this will be issued.

    As of September 30, 2007 FairWest had a consolidated working capital
deficiency of $22.0 million. Notwithstanding accounts receivable that are
offset against current liabilities, consolidated debt obligations are equal to
$22.6 million, broken down as follows:

    - FairWest had a bank loan payable of $5.0 million due to the National
    Bank of Canada ("National Bank"), and a promissory note due for
    $0.5 million.

    - FairWest's wholly owned partnership Neuberry had a Bridge Financing of
    $5.2 million. The $5.2 million relating to Neuberry is a bridge loan
    commitment from an independent party ("Bridge Financing"). The proceeds
    were used to fund FairWest's $4.2 million core area asset acquisition and
    to reduce FairWest indebtedness by $1.0 million to its primary lender.
    The Bridge Financing is expected to be repaid by January 31, 2008.

    - FairWest's wholly owned subsidiary Strike had $10.7 million due to a
    Canadian chartered bank ("Strike Lender") and approximately $1.2 million
    due to creditors who were arranged under the Plan of Arrangement.

    The course of action described below has been developed to reduce the
overall working capital deficiency to $13.0 million plus $2.0 million of 14%
secured convertible debentures ("Debentures") by December 31, 2007. The term
of the debentures will be two years, and will pay interest on a quarterly
basis. Each debenture may convert into 2,222 common shares of FairWest
(0.45 per common share).

    The main elements of the plan are as follows:

    1. Sell $2.0 million of Debentures.
    2. Close the sale of FairWest's interest in the NSR Royalty for
       $1,800,000 US net to FairWest.
    3. The National Bank debt will be reduced by $1.0 million through the
       sale of Debentures.
    4. The promissory note of $0.5 million due will be converted to a
    5. The Bridge Financing debt will be reduced by the sale of $5.2 million
       of assets currently held by Neuberry and FairWest.
    6. The Strike Lender debt will be reduced by $1.7 million through the
       realization of $0.4 million of ARTC receivable, the sale of
       $1.0 million of non core assets and the realization of $0.3 million of
       operating income. The remaining amount due to Strike Lender will be
       repaid in January 2008 from the proceeds of an expected bank line from
       the National Bank. Management is presently negotiating a forbearance
       agreement with the Strike Lender to permit this to occur.
    7. Strike creditors will be paid $0.6 million and the balance will be
       paid out in the first six months of 2008.
    8. FairWest will finance its capital expenditures with cash flow from
       operations, proceeds from the sale of the NSR Royalty, and the balance
       of funds received from the sale of Debentures.

    The new Alberta royalty regime will be implemented in January 2009.
FairWest does not believe the impact will be significant due to the production
profile of its wells. For 2007, royalties as a percentage of sales remains low
as FairWest is able to utilize increased crown royalty deductions.

    Operations Outlook:

    FairWest's operations team has completed a thorough review of the
projects that can be reasonably completed during 2007. As a result, FairWest
has updated its projection of year end production to 1,100 boe/d. Current
production is approximately 725 boe/d. Projects for the balance of the year
include tie-ins of completed and tested gas wells in Kirkpatrick Lake,
Youngstown, and Antelope and additional optimization projects in Antelope and
Provost, Alberta. Also in 2007, FairWest plans to shoot three new proprietary
seismic programs and drill four additional wells.

    Acknowledgements from the President:

    "At FairWest, we operate with a relatively small core of employees and
management. With an active operations program, as well as the completion of
both the Strike acquisition and the purchase of a sizeable and relatively
complex package of core area assets, this quarter has had its workload
challenges for our team. I would like to acknowledge the amazing group of
people I am privileged to work with, every one of whom stepped up to the plate
and delivered. And, this heavy workload has affected the demands we have made
on our board of directors, all of whom have continued to be supportive and
effective. And finally, I would like to express my appreciation for the
ongoing patience of FairWest's shareholders; I, and all our employees and
directors are also proud to be shareholders, and as such are committed to
building this company. I believe the solid results of this quarter underline
the commitment of our team and the effectiveness of our business and
exploitation models. Thank you all."

    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.

    BOE Disclosure: Disclosure provided herein in respect of barrels of oil
equivalent (BOE) may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.

For further information:

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

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