CALGARY, ALBERTA, Aug. 4, 2010 (Marketwire) -- FairWest Energy Corporation (TSX VENTURE:FEC) ("FairWest" or the "Company") announces that the Company has repaid the amount due to its principal lender (the "Bank"). The Company has been operating under the terms of a Forbearance Agreement with its Bank which allowed the Company a period of time to comply with the terms of its credit facility. The repayment of the amount due to the Bank has ended the forbearance period and returned the Company to a normalized banking relationship. In order to repay the Bank, the Company accepted a loan commitment from Canadian Western Bank for $3.75 million and a loan commitment from a related party for $1.65 million.
The Company has received conditional approval of its private placement of up to 11,000,000 Units at $0.27 per Unit for proceeds of $2.97 million from TSX Venture Exchange. Each Unit is comprised of two (2) flow-through common shares at a price of $0.10 per share, one (1) common share at a price of $0.07 per share and one (1) flow-through share purchase warrant exercisable at $0.12 until December 31, 2011.
The Company has identified incremental production associated with a number of optimization and workover projects on its existing wells that vary in cost and scope from low cost maintenance work to more costly recompletions, equipping and tie-ins. Current production is approximately 400 boe/d. Net capital of $1.9 million is expected to add approximately 500 boe/d of incremental production later in 2010. The Company has also budgeted a drilling program in the third and fourth quarters. The 2010 capital budget is to be funded from the Company's $2.97 million Unit Offering, working capital and the sale of non-core assets.
About FairWest Energy
FairWest (TSX VENTURE:FEC) is a Calgary, Alberta based junior oil and gas company engaged in the acquisition, exploration, development and production of crude oil, natural gas and natural gas liquids in the provinces of Alberta and Saskatchewan.
This news release may contain certain forward-looking statements, including management's assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
The terms bbls, bbls/d, boe or boe/d may be misleading, particularly if used in isolation. A boe (barrel of oil equivalent) conversion ratio of 6 mcf per one (1) boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
149,279,936 Common Shares Issued
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