Forent Energy Ltd.

Forent Energy Ltd.

June 29, 2011 17:26 ET

Forent Announces First Quarter 2011 Financial and Operating Results

CALGARY, ALBERTA--(Marketwire - June 29, 2011) - Forent Energy Ltd. (TSX VENTURE:FEN) ("Forent" or the "Company") announced today its first quarter financial results based on International Financial reporting Standards ("IFRS"), which are the new accounting principles generally accepted in Canada.

The following table provides a summary of Forent's financial and operating results for the three months ended March 31, 2011 with comparisons to the three months ended March 31, 2010. 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 and are available on Forent's website at

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

Selected Financial Information

                                                Three Months ended March 31 
                                                        2011           2010 
                                                          ($)            ($)
Revenues                                             921,024        342,091 
Net earnings (loss)                                 (581,215)      (897,250)
Net earnings (loss) per share - basic and              (0.01)         (0.01)
Capital expenditures                                 696,841        454,783 
Total assets                                      13,136,516      8,368,016 
Working capital                                      240,306        451,589 
Funds used in operations                             (11,044)      (159,712)

Financial and Operating Results - First Quarter 2011

--  Annual average oil and gas production increased by 104% percent compared
    to 2010; 
--  average commodity selling prices for oil, NGL's and natural gas
    increased by 32 percent vs. 2010; 
--  overall oil and gas revenues increased by 169 percent to $921 thousand
    from $342 thousand in 2010; 
--  operating expenses per boe increased 31 percent to $29.81 per boe from
    $22.67 in 2010; 
--  corporate operating netbacks for the quarter improved appreciably from a
    net cost of $17.69 per boe in 2010 to a net cost of $2.46 per boe in
--  general and administrative expenses increased 9 percent overall, but
    fell on a per boe basis by 47 percent to $13.08 per boe; and 

--  the Company had a cash burn of $11,044 in the first quarter of 2011,
    compared to a cash burn of $159,712 in 2010. 

Overview of the First Quarter 2011

The first quarter saw the Company complete more of the geological and geophysical ground work necessary for the successful development of its Alton and Montgomery exploration opportunities. Staff completed the interpretation of the gravity gradiometry data for the Alton Block in Nova Scotia, while at Montgomery, the geophysical interpretation of the 3D seismic data was initiated. In addition, human and capital resources were allocated to Nova Scotia in order to further exploration of the Alton Block.

Mervin, Saskatchewan

During the first quarter of 2011, the Company completed the conversion of one of the oil wells that was re-entered in 2010 into a salt water disposal well. This allowed the Company to effect considerable operating cost savings as a result of eliminating the need to haul water to a third party disposal well. In February, however, Forent experienced a significant increase in the amount of water produced with the oil and production was shut down for most of the month, as a result of a number of pump replacements and other work-over efforts. The Company's cash flow was negatively affected not only in February but also subsequently as it has incurred increased trucking costs as a result of the additional water production. At present oil production has largely been restored to previous levels, although operating costs remain high due to the large volume of water production.

Montgomery, Alberta

The Company completed a portion of the interpretation of the 23 section 3D seismic information that was acquired in December 2010. The seismic data appears very promising, identifying a number of drilling locations, each with significant exploration and development potential. These locations include multi- zone, three-way structural closures of significant areal extent, as well as a number of Second White Specs prospects. Most importantly, the Company was able to template the 6-6-12-28 W4 well, the most prolific Second White Specs well in Alberta, which is located adjacent to Forent's 27 contiguous sections of land.

Alton Block, Nova Scotia

Forent was able to complete its interpretation of the aerial gravity gradiometry survey that was completed in December 2010. This has allowed the Company to design a significantly smaller 2D seismic program in order to drill the initial wells on Alton and has allowed us to accelerate our Nova Scotia exploration program.

As a result of the Company's considerable exploration efforts for 2011 on the Alton Block, late in the first quarter, it hired an Executive Vice President, Mr. Scott McDonald to be based in Halifax.

Outlook for the Balance of 2011

The Company has significant plans for the current year that should not only result in increased cash flow over the near term but also position Forent for meaningful future growth, should its exploration efforts in Montgomery and/or Nova Scotia prove successful.

In Mervin, Saskatchewan the Company should complete the tie-in of the six producing wells into the salt water disposal well by the end of July. Forecasts indicate that this should save the Company close to $75,000 per month in operating costs. In addition, the Company should be able to more effectively accommodate third party salt water, thereby allowing it to establish additional revenues from a source that is independent of corporate oil and gas production levels.

The Company is continuing to seek a partner for its Montgomery, Alberta exploration opportunity, with the intention of completing a multiple well farm-out in the third quarter of the year. Forent expects the first well to be spud in Montgomery late in the third quarter or early in the fourth quarter of the year.

In Nova Scotia, the Company plans to spend upwards of $5 million on the Alton Block in an effort to produce oil from the reef like structures identified by the 2010 gravity gradiometry survey. The Company has initiated a program to acquire 65 km of 2D seismic and anticipates data collection to commence in early July and interpretation to be completed by the end of July. This will allow Forent to initiate the drilling of three exploration wells early in October, 2011.

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 term boe may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet equal to one barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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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