Forent Energy Ltd.

Forent Energy Ltd.

September 01, 2009 08:00 ET

Forent Energy Ltd. Executes Two Oil Farm-In Agreements and Initiates $5 Million Brokered Financing

CALGARY, ALBERTA--(Marketwire - Sept. 1, 2009) - Forent Energy Ltd. (TSX VENTURE:FEN) ("Forent" or the "Company") is pleased to announce that it has entered into two oil farm-in deals that will allow the Company to carry out a multi-well drill program focused on oil specific targets in Western Canada before the end of 2009.

Forent's focus is to strengthen its financial position by developing low risk Western Canadian oil prospects to add to its current natural gas production. Accordingly, the Company has entered into farm-in agreements with Black Sea Oil & Gas Ltd. ("Black Sea") in the Worsley area and with Exceed Energy Inc. ("Exceed") in the Roxanna area; both areas are located in West Central Alberta. In total the farm-ins cover over 15 gross sections of oil prone lands with extensive seismic data and offsetting oil producing wells.

Under the Black Sea farm-in, Forent plans to drill up to 4 wells targeting the Montney and Charlie Lake oil formations. The locations were determined from 3-D seismic shot over the existing Charlie Lake pool. This new pool lies east of the Worsley Charlie Lake A & B pools, which have recovered 1.9 and 5.5 million barrels of oil respectively and displayed average initial production rates of 200 bopd per well.

Forent has also farmed in on 11 sections at Roxanna in which it will earn 100% of Exceed's various interests in these lands subject to a non-convertible 12.5% gross royalty. The Company has 4 locations identified on 3-D seismic which will be drilled to test the structurally high Beaverhill Lake sandstones. The offsetting oil production in the Beaverhill Lake in this area displayed initial production rates averaging in excess of 200 bopd per well.

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Forent is also pleased to announce that it has entered into an agreement with Maison Placements Canada Inc. of Toronto (the "Agent") to act as agent on a "reasonable commercial efforts" basis for the placement of up to 22,200,000 Units of the Company at a price of $0.15 per Unit, each Unit consisting of one common share ("Common Share") in the capital of the Company and one-half (1/2) Common Share purchase warrant ("Warrant"), each whole Warrant being exercisable for one (1) Common Share of the Company at a price of $0.17 per share (the "Warrant Price") for a period of 18 months following closing; and up to 9,823,000 Common Shares to be issued on a "flow-through" basis (the "FT Shares") at a price of $0.17 per FT Share (collectively, the "Offering").

The Agent will receive a cash commission equal to 10% of the aggregate gross proceeds of the Offering. The Agent will also receive an Agent's Warrant exercisable to purchase that number of Shares that is equal to 10% of the aggregate number of Units and FT Shares sold. Each Agent's Warrant will entitle the holder to acquire one Share at a price of $0.17 per Share for a period of 18 months from the date of closing of the Offering. The Agent shall have the option, exercisable at any time up to 48 hours prior to the date of closing of the Offering, to increase the size of the Offering by additional Units and/or FT Shares for aggregate gross proceeds of up to C$750,000.

The securities issued in the Offering will be subject to a hold period of four months plus one day from closing.

The Offering is scheduled to close on or about September 25, 2009 and is subject to applicable regulatory and TSX Venture Exchange approval and completion of definitive documentation. Proceeds from the Offering will be used for exploration and development expenditures on the above-noted farm-ins and for working capital purposes.

The Units will be offered by way of private placement exemptions in the provinces of Ontario, British Columbia and Alberta and such other jurisdictions within and outside of Canada as may be agreed to between the Company and the Agent. The Offering will not be available in the United States except under applicable registration exemptions under the United States Securities Act of 1933.

The increased revenues associated with the farm-ins along with proceeds of the financing will assist Forent to advance the development of its assets in Atlantic Canada. Forent is a substantial on-shore oil and gas license holder in Nova Scotia with exploration licenses covering more than 1.2 million acres in which the company hold a 100% working interest and consist of the Alton (740,000 acres) and the Beech Hill (466,000 acres) Blocks. The Company has identified an inventory of oil and natural gas opportunities on the Alton Block including conventional Gays River carbonate oil & gas targets, as well as a significant Horton shale gas resource play. Forent's Nova Scotia properties are bisected by the Maritimes & Northeast natural gas pipeline providing direct access to market for gas developments. The region also offers access to oil refineries to process any future crude oil discoveries.

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

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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