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Press release from Marketwire

Fairborne Energy Ltd.: Wilrich Success Continues at Marlboro

Tuesday, December 07, 2010

Fairborne Energy Ltd.: Wilrich Success Continues at Marlboro18:10 EST Tuesday, December 07, 2010CALGARY, ALBERTA--(Marketwire - Dec. 7, 2010) - Fairborne Energy Ltd. ("Fairborne" or the "Company") (TSX:FEL) is pleased to provide the following update.Subsequent to the release of Fairborne's third quarter results the Company commenced completion operations on two (1.57 net) new horizontal Wilrich wells. Both wells were successfully completed using multistage fracture stimulations and the first well (0.82 net) was placed on production at a rate of 4.5 mmcf per day. The second well (0.75 net) was inline tested at a rate of 8.3 mmcf per day and was planned to commence full production on Friday December 3rd. This brings the total successful Wilrich wells at Marlboro to ten gross wells.On Friday December 3rd, the Company was informed by its third party processor that a significant mechanical failure had occurred at a booster compressor that moved gas from Fairborne's Marlboro property to the K3 gas plant. This compressor failure has resulted in nearly all of Fairborne's production from the Marlboro property being temporarily shut in (approximately 4,500 boe per day net) until the unit is repaired and brought back on line. It is currently estimated that this will take approximately two weeks and the third party operator has informed Fairborne that production is scheduled to recommence on or about December 18th. The impact of this compressor failure on 2010 average annual production is estimated at 200 boe per day.Prior to the outage, weekly corporate production had reached approximately 16,400 boe per day with 1,500 boe per day net tested behind pipe volumes (including the latest Wilrich well, a successful Belly River oil well at Harlech and a successful Gluaconite well at Westerose) that are awaiting startup or being tied into production facilities.On November 4th the Company's Board approved the expansion and construction of a new gas processing facility at Marlboro. The new facility will be capable of processing and delivering 40 to 50 mmcf per day of sale gas through a new sales gas pipeline directly to the TCPL mainline located approximately six miles from the new facility. The facility is also designed to maintain the current Wilrich liquids yield of 15 bbls per million cubic feet of natural gas liquids. The facility will provide a significant reduction in operating costs to the Company's Marlboro area production as well as materially increasing reliability and run time. Fairborne estimates that the new Fairborne owned and operated facility will decrease operating costs for its Wilrich wells, such that, on a NPV 10% basis, each successful Wilrich well will have an increased value of approximately $1.2 million assuming well performance in accordance with Fairborne's type well for the play. Fairborne has identified 65 Wilrich development locations at Marlboro. Further value will be realized through the processing of non-owner third party volumes and additional drilling that will target Notikewin and Bluesky formations. The facility is expected to be completed and operational in April 2011.Fairborne's winter drilling operations are set to commence with activity at Marlboro/Pine Creek, Harlech, Sinclair and Westerose. The first well in the program is planned to spud this week at Marlboro and will be followed by an active first quarter program which will include 25 (20 net) wells.Fairborne is a crude oil and natural gas exploration, development and production company headquartered in Calgary, Alberta, Canada. Fairborne's common shares trade on the Toronto Stock Exchange under the symbol "FEL".Forward-Looking StatementsCertain information set forth in this press release, contain forward-looking statements including management's assessment of future plans and operations, drilling plans, timing of recommencement of production from Marlboro, impact of compressor failure on 2010 annual average production, plans for expansion and construction of a new gas facility at Marlboro and its capacity and effect (including on operating costs and resulting value of wells) and timing of completion of new facility. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Fairborne's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, delays resulting from or the inability to obtain required regulatory approvals, inability to retain and delays in retaining drilling rigs and other services, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions and ability to access sufficient capital from internal and external sources. The foregoing list is not exhaustive.Additional information on these and other risks that could affect Fairborne's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), or at Fairborne's website (www.fairborne-energy.com). Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The actual results, performance or achievement of Fairborne could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Fairborne will derive therefrom. Fairborne disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.Barrels of Oil EquivalencyNatural gas volumes are converted to barrels of oil equivalent (boe) on the basis of 6,000 cubic feet (mcf) of gas for 1 barrel (bbl) of oil. The term "barrels of oil equivalent" may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.FOR FURTHER INFORMATION PLEASE CONTACT: Steven R. VanSickleFairborne Energy Ltd.President and Chief Executive Officer403-290-7759403-290-3216 (FAX)svansickle@fairborne-energy.comORAaron G. GrandbergFairborne Energy Ltd.Chief Financial Officer403-290-3217403-290-3216 (FAX)agrandberg@fairborne-energy.comwww.fairborne-energy.com