Fortress Energy Inc.

Fortress Energy Inc.

December 20, 2007 17:35 ET

Fortress Energy Closes Financing and Provides an Update on Winter Drilling Program

CALGARY, ALBERTA--(Marketwire - Dec. 20, 2007) -


Fortress Energy Inc. ("Fortress" or "the Company") (TSX:FEI) is pleased to announce that it has completed a Public Offering of 2,703,000 Flow-Through Common Shares at a price of $1.85 per Share by way of a Short-Form Prospectus for gross proceeds of $5,000,550.

A syndicate led by Canaccord Capital Corporation including Acumen Capital Finance Partners Limited acted as Agents for the transaction.

The Company plans to use the proceeds from the sale of the flow-through shares on expenditures, which will constitute Canadian Exploration Expenses (as defined in the Income Tax Act). Fortress has approximately $75 million of tax pools available to shelter future income.

Fortress is currently producing 7.8 mmcf per day of natural gas and has sold forward 5.0 mmcf per day at prices of $6.85 per mcf for a period of January 1, 2008 to October 31, 2008. The decision to sell forward a portion of its production was motivated by an aggressive capital expenditure program focused on developing its natural gas reserves in the Square Creek area in the winter of 2008 where Fortress will:

1. Tie-in three existing wells that were drilled during the 2007 winter drilling program which tested over 7.0 mmcf per day of combined production;

2. Drill and tie-in four additional wells in the Square Creek Area;

3. Construct a 38 km pipeline to service the Square Creek Area;

4. Construct a gathering and production facility capable of processing 10 mmcf per day of natural gas; and

5. Drill an exploration well on a separate and distinct structure similar to that of Square Creek.

Fortress has an average working interest of 50% in 27,520 gross acres (15,360 net acres) of undeveloped land in the Square Creek area.

Caution to Reader

This news release contain contains forward-looking information. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by Fortress at the time of preparation, may prove to be incorrect. The actual results achieved in future periods will vary from the information provided herein and the variations may be material. Consequently, there is no representation by Fortress that the actual results achieved during future periods will be the same in whole or in part as the information contained herein.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States. The common shares of Fortress have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

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