Forent Energy Ltd. Announces $4.0 Million Crude Oil Acquisition

CALGARY, ALBERTA–(Marketwired – Nov. 12, 2015) – Forent Energy Ltd. (TSX VENTURE:FEN) (“Forent”) is pleased to announce an acquisition (the “Acquisition”) of oil weighted production in the Company’s core area of Twining near Three Hills, Alberta. The purchase price is $4.0 million less adjustments, subject to a 10% royalty with a put/call arrangement. The effective date of the Acquisition is August 1, 2015, with the closing expected in early December 2015.

The Acquisition

Forent will acquire over 70 gross (20 net) sections of land including producing oil and natural gas assets surrounding our core area of Twining. Current production from the Acquisition is approximately 250 barrels of oil equivalent per day (“boe/d”) which is produced from the Pekisko formation. The oil is a high netback, medium gravity (29 degree API) crude.

The Acquisition is summarized as follows:

• Average production 250 boe/d (68% oil and liquids)
• Purchase price of $16,000 per flowing boe

1. Acquisition gross reserves (before royalties) by Sproule based on a July 31, 2015, mechanical update of the Sproule December 31, 2014 reserve report, prepared in accordance with NI 51-101.
2. Based on $4.0 million closing purchase price

Forent benefits from the Acquisition as follows:

• An increase of 100% to Forent’s current production level
• An increase of 62% to Forent’s proved developed producing reserves
• An increase of 108% to Forent’s total proved plus probable producing reserves
• An increase of 2,000% to Forent’s net land holdings in the Twining area
• The Acquisition is expected to lower Forent’s general and administration per boe by 50%

Forent’s team has identified significant upside including:

• 34 gross development drilling locations
• Stimulation of existing wells to enhance production
• Operational and facility synergies to improve efficiencies

The vendor reserved a 10% royalty on the lands and production. At the vendor’s option, the royalty can be “put” (sold) to Forent in 1% increments for $150,000 per 1% in December 2015. Forent has a “call” (purchase right) until December 31, 2018, on any royalty not tendered by the vendor for $350,000 per 1% increment, minus any royalty payments paid. This structure provides additional flexibility to facilitate the transaction and allows both Forent and the vendor to realize future upside in the current low price environment.

This all cash acquisition is from an arm’s length private company. No finder’s fees are payable with respect to the Acquisition. Forent may use existing and acquisition bank lines, an acquisition facility, and/or a possible private placement financing to provide the required cash to close of approximately $3,300,000 after deposit and closing adjustments.

Robyn Lore, CEO stated, “At the end of Q2 2015 I joined Forent, a company with a very experienced, supportive board and a strong technical team. The innovative structure of this transaction demonstrates Forent’s ability to make an acquisition attractive for both the vendor and Forent in the current low price environment. Our business plan is to continue assembling assets with solid production and large reserves in place. Production enhancements and low risk development opportunities will grow the company and position Forent to benefit significantly from an oil price recovery.”