/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES OF AMERICA./
CALGARY, June 27 /CNW/ - Fairmount Energy Inc. ("Fairmount" or the
"Company") (TSX-V - FMT) is pleased to present a summary of its operating and
financial results for the year ended March 31, 2008. For a complete copy of
Fairmount's annual financial statements and management's discussion and
analysis ("MD & A") and 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 news release, including reserves and present
value of future net revenues, development plans, drilling locations, and
anticipated production from Gold Creek and Harmattan, constitute forward
looking information which are subject to risks and uncertainties. See "Forward
- Looking Information".
Highlights:
- Cash flow from operations of $1,443,059 or $0.10 per share for the
year.
- Production has increased 53% over last year from an average of
251 boe/day in 2007 to 383 boe/day in 2008.
- Substantially all of the increase in reserves was achieved through
the drill bit.
- Before tax present value of Gross Proved plus Probable reserves
discounted at 10% and using forecast prices and costs increased 43%
from $29,658,000 at March 31, 2007 to $42,373,000 at March 31, 2008.
- Gross Proved plus Probable reserves increased 25% from 2,052,000 boe
at March 31, 2007 to 2,562,000 boe at March 31, 2008.
- Before tax present value of Gross Proved reserves discounted at 10%
and using forecast prices and costs increased 22% from $21,931,000 at
March 31, 2007 to $26,707,000 at March 31, 2008.
- Gross Proved reserves increased 16% from 1,293,000 boe at
March 31, 2007 to 1,495,000 boe at March 31, 2008.
Operations
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Three Months Ended
Year Ended
March March December September June
31, 31, 31, 30, 30,
2008 2008 2007 2007 2007
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Wells drilled
- gross 6 2 3 0 1
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Wells drilled
- net 2.9 1.0 1.8 0.0 0.1
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Natural gas
production
- mcf/day 1,370 1,439 1,307 1,333 1,402
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Oil production
bbl/day 15 12 13 19 17
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NGL production
bbl/day 139 162 138 116 140
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Average daily
production
- boe/day 383 414 369 357 390
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Average selling
price - natural
gas $/mcf $6.59 $7.94 $6.07 $5.17 $7.06
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Average
selling price
- oil $/bbl $81.85 $97.84 $86.70 $78.61 $69.99
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Average
selling price
- NGL's $/bbl $46.29 $52.91 $48.01 $40.26 $41.99
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Average
selling price
- $/boe $43.67 $51.16 $42.55 $36.51 $43.41
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Three Months Ended
Year Ended
March March December September June
31, 31, 31, 30, 30,
2007 2007 2006 2006 2006
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Wells drilled
- gross 27 3 6 5 13
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Wells drilled
- net 9.9 1.6 1.9 0.8 5.6
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Natural gas
production
- mcf/day 824 1,000 865 857 574
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Oil production
bbl/day 21 15 25 23 19
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NGL production
bbl/day 93 107 114 84 67
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Average daily
production
- boe/day 251 289 284 250 182
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Average selling
price - natural
gas $/mcf $6.53 $7.32 $6.85 $5.73 $5.90
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Average selling
price - oil
$/bbl $73.37 $66.68 $67.06 $78.64 $80.73
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Average selling
price - NGL's
$/bbl $35.31 $37.93 $32.86 $36.46 $33.96
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Average selling
price - $/boe $40.55 $42.89 $40.09 $39.13 $39.58
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Gold Creek
The Gold Creek area is located on the southern flank of the Peace River
Arch, near Grande Prairie, Alberta. Fairmount has working interests ranging
from 30% to 84% in 13.75 contiguous sections of land in the Gold Creek area.
Fairmount is the operator of all of its existing Gold Creek wells.
Gold Creek contributed an average of 132 boe/day of production for the
year ended March 31, 2008, up from 4 boe/day during fiscal 2007 and accounting
for most of the corporate increase in production. Subsequent to year end,
May 2008 production from Gold Creek was approximately 300 boe/day. The Gold
Creek plant has been shut down for scheduled annual maintenance and plant
turn-around for about two weeks during June 2008. Once the plant re-starts, in
early July 2008 we expect production from the area to be approximately
600 boe/day. Fairmount and partners own gathering and compression facilities
sufficient to process 12.5 mmcf/day of raw gas allowing capacity for future
wells in the Gold Creek area.
Fairmount drilled 2 wells (0.8 net) at Gold Creek during the year. One
well (0.50 net) was dry and abandoned and one well (0.30 net) was successfully
completed in three different zones and placed on production during March.
Subsequent to year end, Fairmount commenced drilling 1 (0.5 net) of 2 wells
(1.0 net) planned at Gold Creek as part of our summer drilling program.
Based on the results of the seven wells drilled to date on this property,
geologic mapping, and/or 3D seismic Fairmount has identified an additional 6
to 10 drilling locations on existing Company lands.
Harmattan
Fairmount's Harmattan property is located approximately 105 kilometres
north west of the city of Calgary. Fairmount has an interest in approximately
20 sections of land at Harmattan, with an average working interest of
approximately 8%. Most wells at Harmattan are oil wells with associated gas
and natural gas liquids production. Fairmount owns 10% of the gathering and
field compression facilities at Harmattan.
The Harmattan property has exceeded initial expectations with economic
hydrocarbons being found in multiple formations over our lands. The initial
target was the Lower Cardium formation, however, 20 wells have been
successfully completed and are producing from the Upper Cardium.
