CALGARY, ALBERTA--(Marketwired - May 30, 2014) - The first quarter of 2014 was very active for Forent Energy (TSX VENTURE:FEN). During the quarter, Forent completed a non-brokered private placement, identified and licensed three development wells at the Twining Property, and a second well was drilled at Montgomery on Forent lands.
In early February, Forent concluded the second tranche of a non-brokered private placement financing supporting the development drilling program planned for the Twining property. Forent issued 7,077,500 common shares of the Company for gross proceeds of $591,000.
During the first quarter, Forent's revenues increased to $859,000 compared with $147,000 in the first quarter of the prior year. Funds flow from operations for Q1 2014 was a positive $150,000 compared with an outflow of $40,000 in Q1 2013. Capital spending for Q1 2014 was $280,000 compared with $nil in Q1 2013. Forent's net debt at March 31, 2014, was $1.6 million compared to net debt of $1.9 million at the beginning of the year. The Company has access to a credit facility of $7.0 million.
Forent's oil and natural gas sales during the first quarter averaged 194 BOEd compared with 62 BOEd in Q1 2013. Oil production was 107 bopd in Q1 2014 compared with 6 bopd for Q1 2013. Extended time-periods of extremely low temperatures along with significant snow accumulations challenged the operational staff during the first quarter but Forent is pleased to report that field staff did an excellent job of minimizing operation downtime.
During the first quarter, Forent identified eight infill drilling locations based on a purchased 3-D seismic survey at Twining. Three infill development locations were acquired, surveyed and licensed in preparation for drilling in Q2. Drilling will commence once the local road restrictions are removed, anticipated before the end of May.
Forent reached a milestone at Montgomery, AB, with the drilling of the second well on Forent lands, and the first well drilled in an area interpreted to be naturally fractured. Our joint venture partner spudded the Montgomery 14-12 well in February and after significant drilling challenges with up-hole zones, the Second White Speckled Shale Formation (2WS) was penetrated and the well was cased for completion. Prior to casing the well, an ultrasonic imaging log was run over the 2WS interval. This log revealed multiple fractures in the 2WS formation across the interval equivalent to the producing zone in the offsetting 06-06 well. After cleaning the drilling fluid from the wellbore, the well was acidized. During swabbing no inflow from the formation was noted. Bottom hole pressure recorders were run to evaluate the reservoir quality. The build-up pressure measured was significantly below expected formation pressure. Forent is currently awaiting our joint venture partners decision on future operations for this wellbore.
In April 2014, Forent elected not to submit a work commitment to renew the Alton block in Nova Scotia. Once regulatory requirements around hydrocarbon resource stimulation are clarified by the Province and a joint venture partner has been identified, Forent can re-nominate these lands and submit a work commitment for further exploration.
Forent will begin an initial three well infill development drilling program at Twining immediately after local road bans have been lifted. This is the first significant step in our plan to increase our oil and associated gas production to over 300 BOEd by the end of 2014. Additional drilling of low risk, development wells within our current portfolio has the potential to far exceed that goal.
At Wayne, several development strategies for the property are under review with Forent's partner in the area. We hope to be able to firm up a drilling schedule during the second half of 2014 for up to three new horizontal wells.
At Provost, oil production is restricted by the water handling capacity of the facilities. Forent has proposed an expansion of the water handling equipment at the battery to enable increased oil production. Once approvals have been obtained from our partners, we will proceed with equipment installation which will increase fluid handling capacity. The Company has identified a number of infill horizontal oil development locations that will be considered for drilling once the battery is capable of processing increased fluid volumes.
Shares of Forent trade on the TSX Venture Exchange under the symbol "FEN".
Forent has filed its Interim Financial Statements and MD&A for the three months ended March 31, 2014, on SEDAR and its website.
ADVISORY: Certain information in this news release, including the operations at the Company's properties, constitute forward-looking statements under applicable securities laws. Although Forent believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because Forent can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The forward-looking statements contained in this news release are made as at the date of this news release and the Corporation 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.
This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings which are available at www.sedar.com.
Barrel ("bbl") of oil equivalent ("boe") amounts may be misleading particularly if used in isolation. All boe conversions in this report are calculated using a conversion of six thousand cubic feet of natural gas to one equivalent barrel of oil (6 mcf=1 bbl) and is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.
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