/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, June 18 /CNW/ - Fairmount Energy Inc. ("Fairmount" or the "Company") (TSX-V - FMT) is pleased to announce a 116% increase in proved plus probable oil and natural gas reserves and present a summary of its oil and gas reserves reported under NI 51-101. Fairmount has filed its Statement of Reserves Data, which includes reserves data and other oil and gas information for the period ended March 31, 2007 and the reports as mandated by National Instrument 51-101 with Canadian securities regulatory authorities. For a complete copy of Fairmount's Statement of Reserves Data in accordance with NI 51-101 with the related reports, please visit www.sedar.com. Certain information contained in this press release, including development plans, drilling locations, and capital expenditures, constitute forward looking statements which are subject to risks and uncertainties. See "Forward - Looking Statements".
Highlights
- Proved Reserves increased 111% from 614,000 boe at March 31, 2006 to
1,293,000 boe at March 31, 2007.
- Proved plus Probable Reserves increased 116% from 951,000 boe at
March 31, 2006 to 2,052,000 boe at March 31, 2007.
- Before tax present value of Proved Reserves discounted at 10%
increased 104% from $10,729,000 at March 31, 2006 to $21,931,000 at
March 31, 2007.
- Before tax present value of Proved plus Probable Reserves discounted
at 10% increased 90% from $15,613,000 at March 31, 2006 to
$29,658,000 at March 31, 2007.
RESERVES
The following information is extracted from the reserve report prepared for the Company by its independent reservoir evaluators, GLJ Petroleum Consultants as at March 31, 2007.
Reserves Summary as at March 31, 2007
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Light/ Light/
Medium Medium Natural Natural
Oil Oil Gas Gas NGLs NGLs Total Total
Gross Net Gross Net Gross Net Gross Net
(mbbls) (mbbls) (mmcf) (mmcf) (mbbls) (mbbls) (mboe) (mboe)
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Proved
Producing 41 36 2,924 2,153 288 196 817 591
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Proved
Non
Producing 11 9 1,850 1,350 147 103 466 337
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Proved
Un-
developed 0 0 44 35 2 1 9 7
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Total
Proved 52 46 4,819 3,537 437 300 1,293 935
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Total
Probable 59 47 2,756 2,111 241 175 759 574
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Total
Proved &
Probable 111 93 7,575 5,648 678 475 2,052 1,510
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Gross reserves are the total of the Company's working interest. Net
reserves are gross reserves net of royalty interests owned by others.
Net Present Value of Reserves (Before Tax) as at March 31, 2007(1)
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($ thousands) Undiscounted PV 5% PV 8% PV 10%
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Proved Producing 21,131 16,656 14,851 13,881
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Proved Non Producing 12,439 9,615 8,437 7,794
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Proved Undeveloped 403 318 279 256
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Total Proved 33,973 26,588 23,567 21,931
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Total Probable 18,330 11,417 8,967 7,727
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Total Proved & Probable 52,303 38,005 32,534 29,658
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Net Present Value of Reserves After Tax as at March 31, 2007(1)
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($ thousands) Undiscounted PV 5% PV 8% PV 10%
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Total Proved 33,973 26,588 23,567 21,931
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Total Probable 13,650 8,813 7,063 6,162
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Total Proved & Probable 47,623 35,401 30,630 28,093
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Per barrel of oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil (6:1). Barrel of oil equivalents ("boe") 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.
(1) Estimated values disclosed do not represent fair market value. The
reserve values are based on the table of prices below. Prices at each
property were adjusted for quality, heating content and
transportation. Oil prices are the equivalent price of sweet light
crude landed in Edmonton to that of West Texas Intermediate crude
(WTI) in Cushing, Oklahoma after adjustments for transportation and
the prevailing Canadian dollar exchange rate. A Canadian dollar
exchange rate of $0.85 US to $1.00 Canadian was used. Gas prices are
based on the type of contract applicable. The NGL price was
established for each property based on the gas stream recovered at
the plant and wellhead for that property.
Price Forecast
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Oil Gas (AECO-C) Pentanes + Propane Butane
($Cdn/bbl) ($Cdn/mmbtu) ($Cdn/bbl) ($Cdn/bbl) ($Cdn/bbl)
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2007 70.25 7.30 71.75 45.00 56.25
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2008 68.00 7.65 69.25 43.50 50.25
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2009 65.75 7.75 67.00 42.00 48.75
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2010 64.50 7.80 65.75 41.25 47.75
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2011 64.50 7.85 65.75 41.25 47.75
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2012 65.00 8.15 66.25 41.50 48.00
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2013 66.25 8.30 67.50 42.50 49.00
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2014 67.75 8.50 69.00 43.25 50.25
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2015 69.00 8.70 70.50 44.25 51.00
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2016 70.50 8.90 72.00 45.00 52.25
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2017 71.75 9.10 73.25 46.00 53.00
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2018+ +2.0%/yr +2.0%/yr Escalate at 2.0% per year
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Forward-Looking Statements
This press release contains forward-looking statements, including but not limited to estimated reserves and future net revenues. Statements relating to reserves and related future net revenue are forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future. Additionally, estimates of future net value involve assumptions relating to production rates, commodity prices and exchange rates, operating costs, capital expenditures and well abandonment costs. These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology. Forward looking statements relating to reserves and future net revenue are estimates only. Actual reserves and future net revenues will differ from those estimated by GLJ Petroleum Consultants and such differences may be material. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. Forward-looking statements are based on assumptions, including, among other things, the Company's ability to benefit from the combination of growth opportunities and the ability to grow through the capital markets; the Company's acquisition strategy, the criteria to be considered in connection therewith and the benefits to be derived therefrom; sustainability and growth of production and reserves through prudent management and acquisitions; the emergence of accretive growth opportunities; the impact of Canadian governmental regulation on the Company; the strategy of the Company regarding commodity price risk management, changes in oil and natural gas prices and the impact of such changes on financial performance; the level of capital expenditures devoted to development activity rather than exploration; the use of development activity and/or acquisitions to replace and add to reserves; the quantity of oil and natural gas reserves and oil and natural gas production levels; and currency, exchange and interest rates.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Company can not guarantee future results, levels of activity, performance, or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Some of the risks and other factors, some of which are beyond the Company's control, which could cause results to differ materially from those expressed in the forward-looking statements contained in this press release include, but are not limited to, general economic conditions in Canada, the United States and globally; industry conditions, including fluctuations in the price of crude oil, natural gas and natural gas liquids and services used by the Company; uncertainties associated with estimating reserves; royalties payable in respect of oil and gas production; governmental regulation of the oil and gas industry, including income tax and environmental regulation; fluctuation in foreign exchange or interest rates; stock market volatility and market valuations; the impact of environmental events; the need to obtain required approvals from regulatory authorities; unanticipated operating events which can reduce production or cause production to be shut-in or delayed; failure to obtain industry partner and other third party consents and approvals, when required; and third party performance of obligations under contractual arrangements. Subject to the company's obligations under applicable securities laws, the Company is not under any duty to update any of the forward-looking statements after the date of this press release to conform such statements to actual results or to changes in the Company's expectations.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.