Forest Gate Reports on Reserves at High Island Offshore Project in GOM

Forest Gate has received an independent reserve report prepared in accordance with NI51-101 on two of five potential producing wells at the High Island 98-L ("HI-98L") offshore project located in Gulf of Mexico off the coast of Texas.

As previously announced in a news release dated May 12, 2009, Forest Gate has entered into an agreement on April 28, 2008 to acquire, subject to certain conditions, 90% of all of the issued and outstanding shares of Atlantis Deepwater Production, Inc. and 90% of all of the issued and outstanding securities of Impact Exploration & Production, LLC, both privately held Houston, Texas-based oil and gas ventures (the "Transaction").

In consideration for the securities of Atlantis and Impact, Forest Gate would issue 142,322,333 common shares from its share capital, at a deemed issue price of $0.02 per share for a total consideration of $2,846,446 (representing 14,232,233 common shares at a deemed issue price of $0.20 on a post-consolidation basis of 10 for 1) , so that the sellers, as a whole, would own 50% of Forest Gate's outstanding common shares upon completion of the Transaction but before taking into account the concurrent financing which terms are described below.

Reserve Report

Atlantis has signed an agreement with a third party, enabling it to acquire interests ranging from 57.3% to 100% in HI-98L.

The report, effective as at March 31, 2009 and prepared by AJM Petroleum Consultants ("AJM"), analysed two of the five existing well bores of HI-98L. AJM's analysis was confined to estimating currently accessible production values in one reservoir.

AJM reported the HI-98L wells 1 & 10 to contain a total proved reserve of 113.7 Mboe with probable additional of 636 Mboe producing a combined proved plus probable reserve of 749.6 Mboe pre- royalties.

Sidetracks are planned for both HI-98L 1 and HI-98L 10 which AJM reported having net after royalty probable reserves of 88.3 Mstb oil and 1,374 MMcf gas sales with current proved pre-royalty remaining of 34.7 Mstb of oil and 474 MMcf of gas. AJM further reported that HI-98L 1 will be reactivated at a daily rate of 270 BOE per day and that HI-98L 10 would produce 200 bbls of oil per day plus 300 thousand feet of gas per day.

Forest Gate plans to increase HI-98L 10 production to 600 bbls per day of oil once upgrading of topside facilities is completed.

AJM estimated annual operating costs to peak at $1.3 million for the proved reserves and $2.5 million in the proved plus probable case. The capital investment required to reactivate the proved case is $457,000.

"We believe reserves at HI-98L will be substantially expanded with our work," said Michael Judson, President and Chief Executive Officer of Forest Gate. "We have plans for upgrading facilities and for the side-tracking of existing well-bores."


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