Forest Gate to Acquire Oil and Gas Assets
2011年12月11日 - 11:25PM
PR Newswire (Canada)
Symbol & exchange: FGE-V CALGARY, AB, Dec. 13, 2011 /CNW
Telbec/ - Forest Gate Energy Inc. reports that it's energy group
has entered into a letter of intent with Sandbox Energy Corp., a
private oil and gas company based in Calgary, Alberta, to acquire
all most of the existing oil and gas assets of Sandbox, a
prospective deal to acquire new oil production and reserves and
$500,000 in cash. The transaction is subject to several conditions
being met before closing. Sandbox must arrange on behalf of Forest
Gate financing for the development of Sandbox's existing assets.
Sandbox must also close on the acquisition of 90 (gross) barrels of
oil equivalent per day. Ninety-three percent of the daily
hydrocarbon production is oil. Finally, Sandbox must a make a
payment of $500,000 in cash to Forest Gate. Sandbox's current
assets include interests in approximately 100 sections of land in
the Russelton and Shackleton areas of southwest Saskatchewan.
Sandbox owns working interests in these properties ranging between
50 and 100 percent. The Russelton property is located approximately
60 miles northwest of Swift Current, Saskatchewan in township 21.
AJM Petroleum Consultants, Calgary, in December 2008 reported that
the Russelton property was producing gas from 20 wells from the
Milk River formation. The Shackleton and Greater Shackleton area
properties are located within several townships distance from
Russelton. According to the AJM report (Dec. 2008), at Shackleton,
Sandbox was producing gas from 11 wells in the Milk River
Formation. The same formation in Greater Shackleton also produced
gas from 14 wells. The Russelton and Shackleton assets were shut-in
December 2010. Sandbox is also presently pursuing the acquisition
of a 90 percent interest in the southwest Saskatchewan properties
known as Divide, Rangeview and Katherine in which Forest Gate
currently holds a 10 percent working interest. The successful
completion of the acquisition by Sandbox and in turn the successful
completion of the transaction between Forest Gate and Sandbox,
would result in Forest Gate owning a 100 percent interest in
Divide, Rangeview and Katherine. These properties are currently
producing on a gross basis 87 barrels of oil equivalent per day
(93% oil). Forest Gate will commission an updated NI
51-101-compliant reserve report on the Sandbox assets. In
consideration for the oil and gas assets above assets, Forest Gate
will issue to Sandbox a total of 25 million common shares at a
price per share of $0.20. As described above, conditions precedent
to closing include: Sandbox arranging a financing to be done
through Forest Gate for the development of the Russelton and
Shackleton properties, the acquisition of the southwest
Saskatchewan assets and the payment to Forest Gate of $500,000 in
cash. The transaction is expected to close on or before February
29, 2012. Following the closing of the transaction, Chris Tesarski,
President of Sandbox, will join Forest Gate as Vice President Land
and Business Development. "Chris will add a lot of value to our
team," said Michael Judson, CEO of Forest Gate. "Chris and Scott
St. John, our Operations Manager, will run the energy side of our
business in Calgary." Mr. Tesarski has 25 years of experience in
the oil and gas industry. Prior to Sandbox he was CEO of Arrow
Energy Ltd. from 2006 to 2008. He has also been involved in oil and
gas mergers and acquisitions and has facilitated $100 million worth
of M&A transactions. The proposed transaction is subject to
various conditions and approvals including a satisfactory due
diligence review of Sandbox's oil and gas assets, the entering into
of a definitive agreement, and the obtaining of TSX Venture
Exchange and board approvals. The proposed transaction is an arm's
length transaction and no finder's fee or commission will be paid
in connection therewith. In other news, Forest Gate reports that it
is arranging a non-brokered private placement up to $250,000 by
issuing an aggregate of up to 5 million units at a price of $0.05
per unit. Each unit consists of one common share and one common
share purchase warrant. Each warrant will entitle the holder to
purchase one additional common share of Forest Gate at a price of
$0.20 until 24 months from the date of issuance of the warrants.
Forest Gate will use the proceeds to purchase oil and gas
equipment. The private placement is subject to regulatory approval
including that of the TSX Venture Exchange. In other news, Robert
Kramberger has resigned as Vice President, Investor Relations. "Rob
will be greatly missed as head of Investor Relations," said Michael
Judson. Rob was significantly more than his former title. He was a
builder of Forest Gate." "I have never seen a more dedicated
person," said Judson "He worked unrelentingly to protect and
further the interests of Forest Gate and its shareholders. He has
decided that he wants to spend more time pursuing his work in
visual art, particularly his painting of Canadian Landscapes" .
Trading in the shares of the company will remain halted pending
further regulatory filings with the Exchange. BOEs may be
misleading, particularly if used in isolation. A BOE conversion
ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead. About Forest Gate
Energy Forest Gate Energy Inc. is a publicly listed oil and gas
exploration and production, and non-energy resource company trading
on the TSX Venture Exchange under the symbol FGE. The Company is
seeking to increase shareholder value through participation and
development of energy and other resources in Canada and
internationally. FORWARD-LOOKING STATEMENTS 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. FOREST GATE ENERGY INC. CONTACT:
Michael Judson President &
CEO1-866-666-3040mjudson@forestgate.cawww.forestgate.ca
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