Forent Energy Reports New Farm-Out Agreement and Third Quarter Financial Results

Forent Energy Reports New Farm-Out Agreement and Third Quarter Financial Results
  
 

CALGARY, ALBERTA--(Marketwired - Nov 29, 2013) - Forent Energy Ltd. (TSX-VENTURE:FEN) ("Forent" or the "Company") is pleased to announce that it has entered into a new Farm-Out Agreement on it's extensive Montgomery land holdings, has commenced gas production testing from the Lower Mannville interval in the Montgomery 01-16-12-29W4M test well and has initiated development and exploitation activity on its recently acquired producing oil properties in central Alberta.

Forent has also filed its unaudited condensed Interim Financial Statements and Management's Discussion & Analysis for the nine months ended September 30 2013 with applicable securities regulatory authorities in Canada. In addition, Forent is pleased to provide the following operational updates in Montgomery, central Alberta and Alton. Copies of these documents can be accessed under the Company's profile on the SEDAR website at www.sedar.com and on the Company's website www.forentenergy.com.

Montgomery, Alberta - Confirmation of Crude Oil and Natural Gas on Land Block

In the third quarter of 2013, Forent was successful in obtaining the first oil recovery on the Montgomery block from the 01-16 well. While the 01-16 wellbore's primary function was to be a test well to obtain core and reservoir parameters, Forent confirmed the presence of free oil in the stimulation flow back fluids. Additional swab testing has occurred on the 01-16 wellbore resulting in intermittent periods of flowing oil and natural gas. Over the additional 4 day testing period, cumulative recovery of formation oil from the well was 160 bbl. Although production from this interval is encouraging, inflow rates are insufficient to justify tie-in of the well.

Following the completion of inflow testing of the Second White Specs interval at 01-16, the perforated interval was isolated in order to facilitate testing of the Lower Mannville formation sand. The Lower Mannville was perforated and fracture stimulated, with resulting clean up flow rates of 13 E3m3/day of natural gas and 0.7 m3/d light oil (460 mcf/d + 4.4 bbl/d). Based on proprietary 3D seismic, Forent sees multiple Lower Mannville locations across the Montgomery land block. Post flow analysis will provide additional information on production potential, associated potential reserves and anticipated vertical or horizontal development for this secondary target.

Based on the results of the production tests in Montgomery, Forent sees significant Second White Specs oil resource potential and Mannville natural gas resource potential on the Montgomery block through application of both horizontal drilling and multi-stage stimulation technologies.

Montgomery, Alberta - New Farm-Out Agreement Signed

In September 2013, the land earning phase of the farm-out agreement between Forent and BlackShale Resources on the Montgomery block expired. Under this agreement, through drilling and completing the 01-16-012-29W4M well, BlackShale earned a 70% working interest in Forent's mineral rights from surface to the base of the Mannville Formation on four (4) contiguous sections of land.

Subsequent to the expiry of Forent's farm-out agreement with BlackShale Resources, the Company conducted a process to identify a partner with strong technical and financial capabilities to evaluate the Second White Specs potential in an area interpreted to be naturally fractured. Forent has now entered into a new Farm-Out Agreement (the "Agreement") with a Calgary based intermediate oil and gas producer (the "Farmee") to continue exploration on the balance of these lands. Under the terms of this Agreement, the Farmee will initially drill an exploration test well, targeting the fractured Second White Specs zone, in order to earn 70% working interest in four (4) sections of land. Timing of drilling of the first well is subject to rig availability, surface accessibility and regulatory approval, all of which is anticipated to occur in the first quarter of 2014.

Richard Wade, President and CEO stated, "We are very pleased by the technical expertise and capabilities of our new partner and their commitment towards continuing exploration on this relatively unexplored yet very prospective land block. Based on analog wells and the confirmation of hydrocarbons in this year's 01-16 well, Forent is very excited about the possibility of success on this next Montgomery exploration well."

Central Alberta - Asset Acquisition and Exploitation

During the third quarter of 2013, the Company identified and negotiated the purchase of oil weighted assets in central Alberta. Forent acquired assets in the Provost, Three Hills, and Drumheller areas, all of which have relatively shallow depth to formation, high working interest, operatorship and associated facilities. At the Provost property, Forent has commissioned design engineering to expand the water handling capability at the central battery which is expected to double the battery oil production (currently 50 bbl/d oil gross - 37 bbl/d net) and to provide additional capacity for future drilling. This battery expansion work is expected to be completed in the first quarter of 2014, pending partner and regulatory approvals. At the Drumheller property, Forent management sees potential for 3 (2 net) development horizontal oil well locations while on the Twining property, Forent has identified an additional 9 (9 net) development vertical drilling locations. The Company has purchased 3D seismic over both these properties to provide geophysical support to further de-risk these drilling locations. In order to facilitate infill drilling, applications for down spacing on these two properties have been made to the regulatory authority.

Central Alberta - Land Acquisition

Forent participated in a recent crown land sale in central Alberta and was successful in acquiring 100% interest in 6,684 ha (~ 26 sections) of land. These lands have 5 year tenure, consist of mineral rights from surface to basement, have multi-zone potential and are prospective for both oil and natural gas at less than 1,200 m true vertical depth. They are also in close proximity to some of Forent's existing assets.

Alton, Nova Scotia - Project Update

Forent has made an application to the Nova Scotia government for a reduction of the required work commitment capital to be spent on the Alton Block over the period of April 2013 to April 2014. This request was made in light of the ongoing hydraulic fracturing review being conducted by the Province. The request was submitted for government review and was expected to be approved in the third quarter of 2013 however, during the review process a provincial election was called, resulting in the process being delayed by the ministry until the election results were finalized. In October, a new government was elected and the application is now before the new Minister of Energy for consideration and approval.

Forent continues to seek a joint venture partner for the Alton Block to accelerate exploration and assist with capital expenditures. Based on geophysical anomalies, the Company has identified 8 conventional drilling locations for Gays River reefs. On the northern portion of the Alton Bock Forent has also identified significant gas resource potential within the Horton shale.

Shares of Forent trade on the TSX Venture Exchange under the symbol "FEN".

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.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

Barrel of Oil Equivalent Presentation - Natural gas is converted to a barrel of oil equivalent ("boe") using six thousand cubic feet ("mcf") of natural gas equal to one barrel of oil unless otherwise stated. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of six mcf to one barrel ("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. All boe measurements and conversions in this report are derived by converting natural gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. Natural Gas Liquids ("NGL") are reported in barrels directly.

Neither 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.

Forent Energy Ltd.Richard WadePresident and CEO(403) 262-9444 #[e-mail]