SHARES OUTSTANDING: 25 MILLION SYMBOL & EXCHANGE: FGE-V
MONTREAL, Jan. 19 /PRNewswire-FirstCall/ - Forest Gate Energy Inc. ("Forest Gate" or the "Company") reports that it has acquired oil licenses in the state of Utah consisting of approximately 123,000 gross acres and 31,335 net acres. This land package was acquired from a private Denver, Colorado-based oil company and comes with an extensive suite of geological and geophysical data. The data base was acquired by the vendor over a fifteen year period.
Forest Gate had previously announced an agreement with the vendor where the Company undertook to pay 100% of the cost to drill, case and complete a 4000 foot well to earn interests ranging between 52% to 70% in oil and gas licenses covering an area of approximately 5000 gross acres in Cedar Valley, Iron County, Utah (see news release dated December 9, 2009). The Company is no longer required to fulfill such obligation as it has entered into a new agreement with such vendor as detailed below.
In a new deal, which enhances the previously acquired 5000 gross acres, Forest Gate has acquired an additional 116,000 gross acres, which covers an expanded trend identified by the vendor, which embraces the Company's original exploration concept. This brings its total land holding in the area to 121,000 gross acres. Forest Gate paid vendor US$390,000 to acquire the licenses covering this acreage. This acquisition was financed with proceeds from the Company's recent financing.
Additionally, Forest Gate is earning between 37.5% to 50% interest in licenses covering 2,160 gross acres (820 net) in Crescent Junction, Grand County, Utah, by drilling a 3600-foot well. Casing point costs for the well are totally funded from the Company's recent financing.
"We have a substantial amount of 2D and 3D seismic, and geochemical surveys", said Michael Judson, Forest Gate's Chief Executive Officer. "We also have well logs which show the presence of hydrocarbons."
The initial drilling target at Crescent Junction, Grand County, Utah is the Wingate formation, which is an eolian (sand dune) sandstone of Jurassic age with a potential thickness of 800 ft. Other potential horizons that will be drilled in the initial test well include Cretaceous Dakota sandstones and the Jurassic Morrison, Entrada, and Navajo formations. The Wingate formation has been identified by 3D seismic.
The program at Crescent Junction involves drilling a 3600-foot well. Spud date is January 31st 2010.
Forest Gate's Iron County, Utah property hosts numerous shallow and deep oil prospects and leads. The Company has a 5,000-foot Rush Lake prospect, which is targeting by-passed Dakota sands and deeper Navajo sands.
This shallow drilling target at Rush Lake is a re-drill to the 1948 Dakota Sandstone discovery at a depth of 2800 feet, which was never put on production.
About Forest Gate Energy
Forest Gate Energy Inc. is a publicly listed oil & gas exploration and production company trading on the TSX Venture Exchange under the symbol FGE with 25 million shares outstanding. The Company is seeking to increase shareholder value through participation and development of oil & gas exploration and production projects in Canada and internationally.
Certain statements regarding Forest Gate, including management's assessments of future plans and operations and Forest Gate's anticipated financial performance, may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties, most of which are beyond Forest Gate's control. These risks may cause actual financial and operating results, performance, levels of activity and achievements to differ materially from those expressed in, or implied by, such forward-looking statements.
Such factors include, but are not limited to: the impact of general economic conditions in Canada and the United States; industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced; competition; the lack of availability of qualified personnel; fluctuations in commodity prices; the results of exploration and development drilling and related activities; imprecision in reserve estimates; the production and growth potential of Forest Gate's various assets; fluctuations in foreign exchange or interest rates; the ability to access sufficient capital from internal and external sources; and obtaining required approvals of regulatory authorities.
Neither TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this release. This transaction is subject to TSX Venture Exchange Approval.
SOURCE FOREST GATE ENERGY INC.