Fairquest Energy Limited

Fairquest Energy Limited

January 12, 2007 06:30 ET

Fairquest Updates Activity and Corporate Presentation

CALGARY, ALBERTA--(CCNMatthews - Jan. 12, 2007) - Fairquest Energy Limited (TSX:FQE) ("Fairquest" or the "Company") is pleased to provide an operation and activity update as well as its most recent corporate presentation, a copy of which can be obtained by visiting the website listed below.

Fairquest exited December 31, 2006 at a production rate of approximately 2,900 barrels of oil equivalent per day (BOE/d) of which 83 percent is natural gas. This production rate is a 93 percent increase over the past 12 months and a 73 percent increase over the average production for the third quarter ended September 30, 2006. In addition, the Company has tested approximately 220 BOE/d of additional production that is currently behind pipe awaiting installation of compression at its Harlech production facilities. It is expected that this production will be on stream prior to the end of the first quarter of 2007.

Currently, the Company has completion operations underway on three (1.35 net) wells and has two (0.42 net) wells awaiting completion operations. In the Harlech and West Pembina area, the Company is drilling two (0.7 net) wells to test various sweet natural gas reservoirs at depths of 2,900 meters to 3,300 meters and one (0.23 net) well to test a Nisku sour gas reservoir at a depth of 3,650 meters.

For the remainder of the first quarter of 2007, the Company plans to drill five (2 net) wells in the Harlech and West Pembina area where the Company has 74 percent of its current production. In addition to these tests, the Company plans seven (2.6 net) wells in the Westerose/Pigeon Lake area and at Rycroft on the Peace River Arch.

Presently, 31 percent of the Company's gas production had been hedged through the period January 1, 2007 until June 30, 2007 at an average floor price for the period of $8.28 per Mcf (Canadian).

Fairquest is a Calgary based, junior oil and natural gas exploration and development company headquartered in Calgary, Alberta, Canada that was created on the reorganization of Fairborne Energy Ltd. completed on June 1, 2005. Its common shares trade on the Toronto Stock Exchange under the symbol "FQE".

Barrels of Oil Equivalent: 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: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.

Forward Looking Statements: Certain information regarding Fairquest in this news release including management's assessment of future plans, timing of commencement of production from certain wells, drilling plans and the timing of drilling, expected depth of wells and reservoirs to be tested may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, the timing and length of plant turnarounds and the impact of such turnarounds and the timing thereof, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, Fairquest's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur, or, if any of them do so, what benefits Fairquest will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could effect Fairquest operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), at Fairquest's website (www.fairquestenergy.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Fairquest does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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