Forent Energy Ltd.
TSX VENTURE : FEN

Forent Energy Ltd.

August 27, 2010 07:00 ET

Forent Announces Second Quarter Results and the Appointment of W. Brett Wilson as Chairman of the Board

CALGARY, ALBERTA--(Marketwire - Aug. 27, 2010) - Forent Energy Ltd. (TSX VENTURE:FEN) ("Forent" or the "Company") announced today its second quarter financial results.

The following table provides a summary of Forent's financial and operating results for the three months and six months ended June 30, 2010 with comparisons to the three months and six months ended June 30, 2009. Forent's financial statements and Management Discussion and Analysis for the three months and six months ended June 30, 2010 have been filed on SEDAR at www.sedar.com and are available on Forent's website at www.forentenergy.com.

All amounts referred to in the press release are in Canadian dollars unless otherwise stated.

Selected Financial Information
 
  Three Months ended June 30   Six Months ended June 30  
  2010   2009   2010   2009  
  ($ ) ($ ) ($ ) ($ )
Revenues 451,222   140,004   850,927   313,168  
Net earnings (loss) (521,801 ) (412,331 ) (876,416 ) (807,034 )
Net earnings (loss) per share – basic and diluted (0.01 ) (0.01 ) (0.01 ) (0.01 )
Capital expenditures 2,248,339   109,780   2,703,121   369,669  
Total assets 14,706,560   8,975,199   14,706,560   8,975,199  
Working capital 2,689,732   856,446   2,689,732   856,446  
Funds used in operations (97,843 ) (235,494 ) (257,557 ) (495,295 )

Second Quarter Highlights as Compared to Second Quarter 2009

  • Average oil and gas production in 2010 increased by 129%.
  • Second quarter average crude oil and NGL production increased from 4% in 2009 to 22% of Forent's overall production mix.
  • Overall oil and gas revenues increased by 222% from $140,004 to $451,222.
  • Average Company commodity selling prices increased by 41%.
  • Corporate netbacks improved by 82% from a deficit of $39.76 per boe to a deficit of $7.21 per boe.

Second Quarter Summary and Outlook

Establishing a Strong Foundation

The Company continued to build upon its first quarter success in transitioning into an oil focused operator. By the end of the second quarter almost 30% of its production originated from oil, with the first tangible results from the Company's heavy oil developments being realized during the quarter and overall oil production growing from 5 bopd in December 2009 to over 40 bopd in June 2010. Currently Forent's oil production is approximately 150 bopd primarily through production additions at Mervin and total production is approximately 260 boe/d including natural gas.

The Company completed a $4.4 million equity financing on April 15th. Associated with the financing, W. Brett Wilson joined the Company's board of directors. During the second quarter of 2010 average oil and gas production increased by 129% as compared to the second quarter of last year and corporate netbacks improved 82% from a deficit of $39.76 per boe to a deficit of $7.21 per boe between the periods. The Company expects corporate netbacks to be positive in the third quarter of 2010.

Forent initiated a sophisticated differential gravity survey to be conducted by ARKeX, in order to provide the Company with its first geophysical assessment of the large reef prone basin and will lead to a 2-D seismic acquisition program, followed by a reef oil exploration drilling program anticipated to commence in 2011. Although the aircraft arrived in Canada in late May, ARKeX was unable to acquire significant data during the second quarter as a result of equipment and weather complications. These issues have been overcome and the ARKeX aircraft is currently acquiring data over the Alton Block with an estimated completion date of October 15, 2010.

The Company's founder, CEO, President and Chairman of the Board, Mr. Dennis Forgeron was tragically lost in an airplane crash on August 5th. The Company's board of directors has appointed W. Brett Wilson as Chairman of the Board and Thomas E. Lester as President and CEO, with the intention of continuing to pursue the existing corporate strategy.

Operations Summary and Overview of the Second Quarter of 2010

The Company initiated the re-entry of existing wells on the Mervin, Saskatchewan lands, which were acquired in December of 2009, in order to reactivate the previously producing oil field that was shut-in during the low oil price period of 1998, partially as a result of water volumes. Initial Mervin results have been encouraging from the first five wells of a 7 well re-entry program. Two oil producing wells were brought on stream at the end of June and three more wells were on stream in July, with the remaining wells to be activated in early September 2010. Additional locations, acquisition of seismic data and an optimization program are currently being evaluated to further enhance production and cost efficiency within the project area.

The Provost oil wells drilled in late 2009 and brought on-stream in February 2010, have been successfully producing with combined gross production of approximately 60 bbl/day (21 bbl/day net; 35% working interest).

Forent is a significant on-shore oil and natural gas license holder in Nova Scotia with exploration licenses on more than 1.2 million net acres and an extensive inventory of oil and natural gas opportunities on its Nova Scotia properties, including conventional Gays River carbonate oil & natural gas targets and a significant Horton shale gas resource play. The Company is also building a production base in western Canada, in order to generate a significant portion of the funds required to develop its Nova Scotia assets.

Shares of Forent trade on the TSX Venture Exchange under the symbol "FEN.V".

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements such as the estimates of reserves, the references to Forent's exploration program and drilling program and capital expenditures relating to, and timing of, such programs are based on the opinions and estimates at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. There are uncertainties inherent in forward-looking information, including factors beyond Forent's control, and no assurance can be given that the programs will be completed on time, on budget or at all. In addition, there are numerous uncertainties inherent in estimating reserves, including many factors beyond Forent's control, and no assurance can be given that the indicated level of reserves or the recovery thereof will be realized. Forent undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. Additional information identifying risks and uncertainties that could affect financial results is contained in Forent's filings with Canadian securities regulators, which filings are available at www.sedar.com.

The TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

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