Forest Gate Closes Acquisition of Oil & Gas Production
25 February 2011 - 12:30AM
PR Newswire (Canada)
MONTREAL, Feb. 24 /CNW/ -- This news release is not for
distribution to United States newswire services or for
dissemination in the United States. Symbol & exchange: FGE-V
MONTREAL, Feb. 24 /CNW Telbec/ -Forest Gate Energy reports that it
has closed its acquisition of oil and gas assets located in south
western Saskatchewan from a private, Calgary-based company. As a
result of the transaction Forest Gate owns a non-operated 20
percent interest in oil and gas licenses encompassing 19,848 gross
acres in south western Saskatchewan. The remaining 80 percent
interest is owned and operated by Trafina Energy Ltd., a
publicly-traded oil and gas company based in Calgary, Alberta. The
licenses are located in areas known as Rangeview, Divide and
Katherine. Rangeview and Divide are currently producing 30 barrels
per day of oil and the equivalent of 10 barrels of oil per day in
gas production net to Forest Gate. Production is from the Upper
Shaunavon (18 degree API), and Madison formations (10 degree API).
Katherine has known hydrocarbon reserves. Forest Gate's combined
oil and gas production from Saskatchewan and Alberta is
approximately 80 barrels per day of oil equivalent. The weighting
is in favour of oil production with approximately 50 of the 80
barrels in oil and 30 in gas. Forest Gate and its partner, Trafina
Energy, intend to drill at least two additional horizontal wells in
the Upper Shaunavon formation and at least two horizontal wells in
the Madison formation at Rangeview and Divide in 2011. "In March,
we will be drilling a new horizontal well, which will once again
target the Upper Shaunavon formation at Divide," said Michael
Judson, President Chief and Executive Officer of Forest Gate. As a
result of this transaction Forest Gate also has been able to
attract new technical talent in Calgary, says Judson. "The
relationship is in the process of being formalized but we have
recruited a highly experienced oil and gas operator to join us in
helping build the company. This individual was responsible for
putting together the play at Divide, Rangeview and Katherine." "We
are also extremely pleased to be working with Trafina Energy", said
Judson. "They have a track record of success in the Canadian
Western Sedimentary Basin." The total consideration for the
acquisition was $1.5 million. Forest Gate issued to the private
company 7.35 million shares, assumed its bank line of credit of
$350,000 and various liabilities the private company had with its
joint venture partner in the amount of $100,000. Forest Gate will
also make an additional cash payment of approximately $50,000 by
March 31, 2011, subject to normal industry adjustments. The
Transaction is subject to final approval of the TSX Venture
Exchange. Conditional approval was granted on January 20,
2011. 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 Company is seeking to increase
shareholder value through participation and development of energy
and other resources in Canada and internationally. FORWARD-LOOKING
STATEMENTS BOEs 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. In addition, the estimated values disclosed in this
release do not represent fair market value. 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. 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. To view this news
release in HTML formatting, please use the following URL:
http://www.cnw.ca/en/releases/archive/February2011/24/c5600.html
pRobert Kramberger, V-P, Investor Relationsbr/ 1-866-666-3040br/ a
href="mailto:rkramberger@forestgate.ca"rkramberger@forestgate.ca/abr/
a href="http://www.forestgate.ca"www.forestgate.ca/a/p
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