FairWest Energy Corporation has received a verbal indication from its principal lender that it will be required to pay back all amounts outstanding on its $8 million demand loan facility in early 2012. 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.

The Company announces that its previously announced flow-through share offering is oversubscribed. Subject to regulatory and TSX Venture Exchange approval, the Company intends to increase its previously announced private placement of Flow-Through Common Shares at $0.07 per share from up to 30,000,000 FT Shares for proceeds of $2.1 million to up to 37,142,858 FT Shares for proceeds of up to $2.6 million. The Company may pay finders fees of up to 10% of the offering to eligible dealers. The funds from this private placement will be used for exploratory drilling and seismic surveys on FairWest properties during 2011 and 2012.

Tags: FairWest Energy