Formation Fluid Management Inc.
TSX VENTURE : FFM

Formation Fluid Management Inc.

March 13, 2012 18:00 ET

FFM Announces Convertible Debenture Financing and Changes to Board of Directors

CALGARY, ALBERTA--(Marketwire - March 13, 2012) - Formation Fluid Management Inc. (TSX VENTURE:FFM) ("Formation Fluid" or "the Company") is pleased to announce a brokered private placement of convertible notes (the "Notes") for up to a maximum aggregate principal amount of $750,000 (the "Private Placement").

The Notes will have a twelve month term and will yield an interest rate of 10% per annum due on maturity. The Notes will be convertible into common shares (the "Common Shares") of the Company at a conversion price of $0.10 per Common Share. The Company will have the right to repay all of the outstanding principal and interest of the Notes upon notice to the holders of the Notes. The Notes will be secured, subordinated only to any bank debt.

Formation Fluid has appointed Union Securities Ltd. (the "Agent") as its non-exclusive agent for the Private Placement. In consideration for its services the Agent will receive an 8% cash commission on the total gross proceeds of the Private Placement placed by the Agent and a number of warrants (the "Agent's Warrants") equal to 10% of the number of Common Shares which would be issued upon conversion of the Notes placed by the Agent. Each Agent's Warrant will entitle the Agent to purchase one Common Share of the Company at a price of $0.10 per Common Share for a period of one year.

Formation Fluid will apply to the TSX-V for up to 825,000 Common Shares to be reserved for listing on the TSX Venture Exchange (the "TSX-V") as the maximum number of Common Shares issuable upon conversion of the Notes and the Agent's Warrants. Pursuant to applicable securities laws, the Common Shares issued upon conversion of the Notes, if any, will be subject to a four-month hold period from the date of issuance.

The closing of the Private Placement is expected to occur as soon as possible and is subject to the approval of the TSX-V. Proceeds from the Notes will be used by the Company for general working capital.

Formation Fluid also announced today the appointment of Chance Radford to its board of directors. Mr. Radford currently serves as the Company's Chief Operating Officer.

Minaz Devji is stepping down as a director and as the Chairman of the Company's board of directors. The Board would like to thank Mr. Devji for his commitment and assistance to the Company over the past years.

About Formation Fluids

Formation Fluid Technology has developed a waste water treatment plant that uses a proprietary process to clean waste water. The system is mobile and can be scaled to process required volumes. This system treats water to meet or exceed CCME Guidelines (Canadian Environmental Quality Guidelines), resulting in reusable water that can be used for: Boilers, Frac Water, Water Floods, and Drilling Operations. Formation Fluids is seeking to service a significantly underdeveloped segment within the oil and gas industry; its waste water treatment system is intended to cost effectively deal with produced water while satisfying the need to reuse and recycle an increasingly valuable resource.

On behalf of the Board of Directors

Wayne Smith, Chief Financial Officer

FORWARD LOOKING INFORMATION

Certain information in this news release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions. This forward-looking information includes, among other things, information with respect to the Company's beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "could", "should", "would", "suspect", "outlook", "believe", "anticipate", "estimate", "expect", "intend", "plan", "target" and similar words and expressions are used to identify forward-looking information. The forward-looking information in this news release describes the Company's expectations as of the date of this news release.

The results or events anticipated or predicted in such forward-looking information may differ materially from actual results or events. Material factors which could cause actual results or events to differ materially from such forward-looking information include, among others, risks arising from general economic conditions and adverse industry events, risks arising from operations generally, reliance on contractual rights such as licenses and leases in the conduct of its business, reliance on key personnel, market acceptance of the Company's products and services, the need to protect intellectual property and other proprietary rights, possible failure of the business model or business plan or the inability to implement the business model or business plan as planned, fluctuations in the cost of materials, competition, environmental matters, and insurance or lack thereof.

The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company's forward-looking information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD‐LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME.

Neither 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 release.

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