2009-05-13-2009-05-12

Canceled plans to acquire companies, gaining interests onshore & offshore LA, TX.

Forest Gate Resources Inc., Montreal, (Toronto Venture: FGT) has canceled plans to acquire 90% each of privately held Houston-based companies Atlantis Deepwater Production Inc. and Impact Exploration & Production LLC for an undisclosed price in stock. Pro forma, Atlantis and Impact shareholders would have held a combined 50% stake in Forest Gate. The assets included interests offshore and onshore Louisiana and Texas. Atlantis had signed an agreement Feb. 26 to acquire interests ranging from 57.3% to 100% in the High Island 98-L (HI-98L) project in Gulf of Mexico off the coast of Texas. According to Atlantis, HI-98L produced 600 barrels of oil per day before being shut-in in September 2008. HI-98L currently consists of five well bores and a single processing platform with multiple primary separation and measurement components, secondary processing facilities, and sales measurement readings. Five wells were drilled and completed with two wells capable of immediate production. According to Atlantis, production could re-commence at HI-98L as early as August with optimization and acceleration possible. The HI-98L field is located in 40 feet of water and encompasses multiple state leases on High Island 98L and a federal lease on the opposite side of the 3 league line in the same block. Atlantis will acquire HI-98L for US$500,000 plus the assumption of a the seller's share of plug and abandonment liability. Impact Exploration is currently finalizing lease agreements for 7,100 net mineral acres in southeast and South Texas onshore with current production potential of 48 barrels of oil per day. Forest Gate expected to close a nonbrokered private placement financing concurrent with closing to raise between $500,000 and $2.5 million and consolidate its shares on a 10 for 1 basis. Atlantis and Impact were established by Jonathan Tidswell, president of Edinburgh, Scotland-based Angus Energy LLP.