FairWest Energy Corporation reports that its principal lender has formalized its previous verbal notice that the Company is required to pay back all amounts outstanding on its demand loan facility.

Effective immediately, the Facility is reduced to $6.15 million and the Company has until February 15, 2012, to repay the full amount due.

The Facility is secured by a debenture over the Company's assets and a letter of guarantee in the amount of $5 million from a significant shareholder.

FairWest has received a preliminary indication that the Shareholder is prepared to provide a letter of guarantee to another lender that is expected to assist the Company in discharging its obligations to the Bank and obtaining a new credit facility.

Tags: FairWest Energy