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CALGARY, Jan. 21 /CNW/ - Fairmount Energy Inc. ("Fairmount" or the "Company") (TSX-V - FMT) announced today that the Board of Directors has initiated a process to review the Company's business plan and to identify, examine and consider a range of strategic alternatives available to Fairmount for enhancing shareholder value. This may include, among other things, exploring a corporate sale or business combination, potential asset divestments, adoption of a dividend policy, making a substantial issuer bid or other alternatives to increase shareholder value.

In light of the planned evaluation of strategic alternatives for maximizing shareholder value, the Company wishes to provide the following operational and financial update:

-  The Company continues to have a strong balance sheet, with $6,500,000
   of un-drawn capacity available under the Company's operating demand
   loan facility.
-  Current production has increased to approximately 600 boe/day, with an
   additional 300 boe/day of estimated productive capacity currently
   constrained by facility limitations.
-  The Company has recently drilled and cased 2 (0.8 net) wells with 1
   well (0.3 net) in the Gold Creek Area and 1 well (0.5 net) in the
   Thorsby area. Completion operations on both wells are in progress.
-  The Company does not feel the current market price of its shares
   adequately reflects its net asset value and has been actively
   purchasing and cancelling shares under its normal course issuer bid
   with 633,500 shares purchased since September 30, 2008.
-  Fairmount currently has 16,339,889 shares issued and outstanding.

The Board of Directors has engaged Rundle Energy Partners to act as its independent financial adviser to assist in the conduct of this review.

No decision on any particular alternative has been reached at this time and there can be no assurance that the process will result in any change in the Company's current plan to explore and develop its current oil and gas properties or that the Company will pursue any particular transaction or course of action. Fairmount does not intend to make any further announcements regarding the process unless and until its Board of Directors has approved a specific transaction or other course of action or otherwise deems disclosure of developments is appropriate.

Forward Looking Information

This press release contains forward looking information relating to the Company's plans to review strategic alternatives for maximizing shareholder value and estimated productive capacity currently constrained by facility limitation.