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Press release from Marketwire

Fairborne Energy Ltd: Wilrich Success Continues at Marlboro

Tuesday, January 18, 2011

Fairborne Energy Ltd: Wilrich Success Continues at Marlboro07:00 EST Tuesday, January 18, 2011CALGARY, ALBERTA--(Marketwire - Jan. 18, 2011) - Fairborne Energy Ltd. (TSX:FEL) ("Fairborne" or the "Company") is pleased to provide the following update.ProductionDuring the month of December Fairborne achieved its previously announced exit target with production in excess of 17,000 boe per day (4,000 bbls per day of light oil and natural gas liquids and 78 mmcf per day natural gas). This is a significant milestone for the Company as 2009 exit production was approximately 13,000 boe per day, equating to year over year exit production growth of 30 percent and a new record high production level for the Company. Based on field estimates, 2010 fourth quarter production is expected to average approximately 16,000 boe/d, an increase of 20 percent over 2009 fourth quarter levels. Full year production is estimated to average approximately 15,200 boe per day, an increase of five percent over 2009.Fairborne's 2011 production guidance is for annual average production of 17,500 to 18,000 boe per day and 2011 exit production of 19,000 to 19,500 boe per day based on the previously disclosed 2011 capital budget of $140 million.OperationsFairborne is currently operating three drilling rigs in the Alberta Deep Basin and one at Sinclair, Manitoba. The Company expects to maintain this level of activity through to spring breakup. Marlboro/Pine Creek WilrichProduction operations returned to normal following the previously announced third party compressor outage at Marlboro in early December. Through the end of the year Fairborne drilled the first Wilrich well of the four well ( 2.4 net) winter program bringing the total Marlboro Wilrich wells drilled to eleven with a 100 percent success rate. This well will be stimulated over 12 intervals and completion operations are currently underway.The continued success of the Wilrich program, along with the third party outage in December, has further emphasized the economic benefits of constructing the Marlboro Gas Plant. Facility construction has commenced and is on track for startup in April, 2011. The Marlboro Gas plant will add an additional 40 to 50 mmcf per day of processing capacity.SinclairAt current oil prices, the Sinclair light oil property represents a significant value upside for Fairborne as the Company receives exceptional netbacks of approximately $85 per barrel at current prices.The winter drilling program includes nine (8.1 net) horizontal wells that will follow up the initial success obtained on the three most recent wells drilled where the number of fracture stimulations was increased from the previous standard of 10 to 12 per well to a range of 14 to 28 per well. This increase in fracture number is designed to investigate the level of increased production performance with increased stimulation. Two wells in the winter program have already been drilled and completion operations are currently underway.WesteroseThe Company is currently drilling the first of two horizontal Glauconite wells (2.0 net) scheduled for the winter program. The Westerose area is on the northeast portion of the Hoadley Glauconite trend and provides compelling economics resulting from condensate and natural gas liquids yields of 65 barrels per mmcf.HarlechThree (2.2 net) vertical, multizone wells are planned for the winter program at Harlech, with the first well having spud in early January. These wells are targeting Viking, Notikewin, Falher and Gething sands in the Deep Basin and are following up on successful development drilling from the fourth quarter of 2010.The Company also plans to recomplete an existing vertical well for the Cardium sand on the western side of the Harlech property during the first quarter. Fairborne has 92 net sections of prospective Cardium rights in the Harlech area and with condensate and natural gas liquid yields of 50 bbls per mmcf in nearby wells the successful recompletion could lead to a large development area of low risk liquids rich gas development.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, estimated 2011 average production and exit production rates, number of drilling rigs planned to be utilized until spring breakup and the timing of the construction of the Marlboro gas plant and the effect thereof. 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.NetbacksNetbacks referred to herein are calculated by deducting royalties, operating expenses and transportation costs from revenue derived from petroleum and natural gas sales.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