FFM Successfully Completes First Commercial Contract

Formation Fluid Management Inc. (TSX VENTURE:FFM) ("Formation Fluids") or ("the Company") is pleased to announce that further to its news release of October 20, 2011 it has successfully completed its first commercial contract under an agreement with a large Canadian oil & gas producer ("Partner") based in Calgary, Alberta. The Formation Fluids Mobile Water Treatment Unit exceeded all performance requirements and surpassed Alberta Environmental Standards.

In accordance with the contract, Formation Fluids cleaned and returned the water to its natural source with minimal impact to the environment. Prior to treatment, the water was tested by an independent laboratory and found to have total dissolved solids ("TDS") of 6,970 mg/L and a contaminant level of 3,520 mg/L. Per the contract, the Company's Partner required that the contaminant level be reduced to below 230 mg/L. The final results were again tested by an independent laboratory and the TDS level was reduced to an average of 40 mg/L over nine samples and the contaminant level was reduced to below 10 mg/L. This was achieved while operating under adverse weather conditions and in temperatures substantially below the designed temperature range for the Mobile Water Treatment Unit.

This project has provided an excellent field demonstration of Formation Fluids technology and capabilities while generating revenue for the Company. We have included a photo of the two trailers comprising the Mobile Treatment Unit on site along with the storage tanks used for this project so everyone can see the mobile nature of our system.

To view the photo associated with this press release, please visit the following link: http://media3.marketwire.com/docs/FFMstoragetank.jpg.

About Formation Fluids

Formation Fluid Technology has developed a waste water treatment plant that uses a proprietary process to clean waste water. The system is mobile and can be scaled to process required volumes. This system treats water to meet or exceed CCME Guidelines (Canadian Environmental Quality Guidelines), resulting in reusable water that can be used for: Boilers, Frac Water, Water Floods, and Drilling Operations. Formation Fluids is seeking to service a significantly underdeveloped segment within the oil and gas industry; its waste water treatment system is intended to cost effectively deal with produced water while satisfying the need to reuse and recycle an increasing valuable resource. For more information, please visit: www.formationfluid.com or contact Investor Relations Toll Free.

On behalf of the Board of Directors

Chance Radford, Chief Operating Officer

FORWARD LOOKING INFORMATION

Certain information in this news release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions. This forward-looking information includes, among other things, information with respect to the Company's beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "could", "should", "would", "suspect", "outlook", "believe", "anticipate", "estimate", "expect", "intend", "plan", "target" and similar words and expressions are used to identify forward-looking information. The forward-looking information in this news release describes the Company's expectations as of the date of this news release.

The results or events anticipated or predicted in such forward-looking information may differ materially from actual results or events. Material factors which could cause actual results or events to differ materially from such forward- looking information include, among others, risks arising from general economic conditions and adverse industry events, risks arising from operations generally, reliance on contractual rights such as licenses and leases in the conduct of its business, reliance on key personnel, market acceptance of the Company's products and services, the need to protect intellectual property and other proprietary rights, possible failure of the business model or business plan or the inability to implement the business model or business plan as planned, fluctuations in the cost of materials, competition, environmental matters, and insurance or lack thereof.

The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company's forward-looking information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME.

"Neither 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 release."

Contacts: Formation Fluid Management Inc. Toll Free Investor Inquiries 1 (888) [e-mail]