Forest Gate Energy Inc.
Symbol & Exchange: FGE-V
Forest Gate Updates Notice of Default
Montreal, QC - July 29, 2008 - Forest Gate Resources Inc. ("Forest Gate") reports that it has received a second Notice of Default concerning its Celtic Sea project for its failure to pay a second cash call within a specified period of time in accordance with the Celtic Sea Joint Operating Agreement ("JOA") dated June 29, 2007. This follows a previous news release dated July 4, 2008 whereby Forest Gate reported the receipt of its first Notice of Default for its failure to pay its June 3, 2008 cash call in accordance with the JOA.
Under the terms of the JOA, Forest Gate has sixty days from the notice date of July 3, 2008 to remedy the first default by paying the full amount of its June 3, 2008 cash call to the Operator. As Forest Gate has now received a second cash call and expects to receive additional cash calls for a total amount estimated at approximately $13 million in order for Forest Gate to fulfill its 7.5% commitment to this summer's drill program, Forest Gate will only be in a position to remedy its default status if it is able to raise the full amount before the end of the default period. In the event that the default continues for more than sixty days, Forest Gate will forfeit its interest in the Celtic Sea project.
"Forest Gate will continue its efforts to fund its interest in the Celtic Sea project until the last day of the default period, September 3, 2008. However, provided we are unable to raise the full amount required to fund our commitment to this summer's drill program, we think it would be imprudent to make the initial smaller cash calls knowing that much larger cash calls are imminent," said Michael Judson, President and CEO of Forest Gate. "Notwithstanding the Celtic Sea project, Forest Gate is in a strong financial position with approximately $1.5 million in the bank allowing Forest Gate to fund its Alberta drilling projects and producing assets. Whatever the outcome may be, I see a strong and positive future for Forest Gate in the oil & gas industry."
Forest Gate continues to produce oil and natural gas in Alberta with partner Emerald Bay Energy, which now generates cash flow for Forest Gate. Forest Gate has recently raised flow through funds which will be used to fund its 38% interest in the drilling of the Kelsey exploration well, which will be drilled in the coming weeks. There is also the possibility that additional wells will be drilled in Alberta with partner Emerald Bay Energy in the coming months. These possibilities are currently being reviewed.
About the Company
Forest Gate Resources Inc. is an international oil & gas exploration company. The company is seeking to
increase shareholder value through participation and development of oil & gas exploration and production
projects in Ireland and Canada. The Company's shares trade under the symbol FGT on the TSX Venture
Exchange.
For more information please contact:
Robert Kramberger,
V-P, Investor Relations
1-866-666-3040
rkramberger@forestgate.ca
www.forestgate.ca
About Forward-Looking Information and Statements
This news release contains forward-looking statements, within the meaning of applicable securities laws, that address goals, expectations or projections about the future. The use of any of the words "expect," "anticipate," "continue," "estimate," "objective," "ongoing," "may," "will," "project," "should," "believe," "plans," "intends," "might," and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this news release contains forward-looking statements with regard to cash flow, capital spending, debt and debt repayment, strategic alternatives, drilling opportunities and business plans. The forwardlooking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon.
The forward-looking statements contained in this news release are based on Forest Gate's current goals, expectations, estimates, assumptions and projections and involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated and described in the forward-looking statements. Such risks and uncertainties include, without limitation: volatility in market prices for oil and natural gas; volatility or fluctuation in oil and natural gas production levels; volatility in currency exchange rates; liabilities and risks inherent in oil and natural gas operations, including geological, technical, drilling and processing problems; uncertainties associated with estimating reserves; competition for, among other things, capital, acquisitions, reserves, undeveloped land and skilled personnel; incorrect assessments of the value of acquisitions; Forest Gate's success at the acquisition, exploration and development of reserves; changes in market, economic and business conditions; and actions by governmental or regulatory authorities including changes in tax laws or incentive programs. The foregoing list of assumptions, risks and uncertainties is not exhaustive. Additional information on these and other factors which could affect operations or financial results are included under the heading "Risk Factors" in Forest Gate's Annual Information Form as filed under Forest Gate's profile on www.sedar.com. Additional information may also be found in Forest Gate's other reports on file with Canadian securities regulatory authorities.
The forward-looking statements included in this news release speak only as of the date of this news release, and Forest Gate assumes no obligation to publicly update or revise them to reflect news events or circumstances, except as may be required pursuant to applicable laws.
