- Closes Great Gulfcan Assets Purchase -
- Begins Development Expected To Triple Production Year-Over-Year -
DALLAS, TX, June 4, 2012 /CNW Telbec/ - Gale Force Petroleum Inc. (TSXV: GFP) (OTCQX: GFPMF) (the "Company" or "Gale Force") announced today that it has concluded the purchase of assets from
Great Gulfcan Energy Inc. ("GGC"), including $3.1 million in cash, an option on an oil and gas lease in
South Texas with one currently non-producing well, and a right of first
refusal to purchase GGC's tax losses.
G. Scott Paterson, GGC's Chairman, was appointed to Gale Force's Board
of Directors as the Company's Co-Chairman. GGC is at arm's length from
the Company and there were no finder's fees payable in conjunction with
"The GGC Asset purchase provides Gale Force with additional cash that
will assist us in accelerating our growth, and we look forward to Mr.
Paterson's contribution to the Board", said Michael McLellan,
Co-Chairman & CEO. "With the proceeds of the transaction, Gale Force
now has sufficient capital to pursue its planned development and
drilling programs that are expected to triple production
GGC Asset Purchase Terms
The purchase price for the GGC Assets was CA$4.2 million, paid through
the issuance of units of the Company (the "Units") comprised of one preferred share with an issuance price of 25 cents
per share (the "Preferred Shares") and one-half warrant exercisable at 30 cents per share until April
11, 2014 (the "Warrants"). In the aggregate, 16.8 million Preferred Shares and 8.4 million GGC
Warrants were issued in consideration for the purchase, distributed to
the shareholders of GGC.
The Warrants issued shall be listed for trading on the TSX Venture
Exchange, with the listing expected to be initiated in June 2012.
The Preferred Shares (and their underlying common shares) are subject to
resale restrictions, such that 50% of them are not transferable until
June 1, 2013 and the remaining 50% are not transferable until December
1, 2013. The Preferred Shares earn no dividend, but are convertible 1:1
into common shares of the Company by the holder at any time or by the
Company if the 20-day average trading price of the Company's common
shares is over 30 cents provided there is average trading volume over
200,000 shares per day, using the combined trading volumes on the TSX
Venture Exchange and the OTCQX market.
Mr. Paterson was appointed to Gale Force's Board of Directors as the
Company's Co-Chairman. Mr. Paterson is also a Director of Lions Gate
Entertainment Corp. (NYSE: LGF), Chairman of Automated Benefits (TSXV:
AUT), Vice-Chairman of Neulion Inc. (TSX: NLN) and Chairman of Apogee
Silver Ltd. (TSXV: APE) as well as Chairman of GGC. Mr. Paterson spent
16 years in the investment industry last serving as Chairman & CEO of
Yorkton Securities from October 1998 to December 2001 during which time
Yorkton raised over $9 billion as lead and/or co-managing underwriter.
Mr. Paterson has served the securities industry as Chairman of the
Canadian Venture Exchange, Vice-Chairman of the Toronto Stock Exchange,
Governor of the Investment Dealers Association of Canada and as a
Director of each of the Canadian Investor Protection Fund, Canadian
Securities Institute and the Canadian Securities Advisory Council. Mr.
Paterson is also involved in many charitable and community
Interim Financial Statements
The Company announced today that it published its interim financial
statements for the period ended March 31, 2012. Some of the key
Production grew during the quarter again for the eighth straight
According to IFRS rules, the Company recorded significant non-cash
expenses for fluctuations in the estimated value of outstanding
warrants (embedded derivative liabilities) and crude oil hedges. These
non-cash charges caused the Company to report a net loss. Without these
charges, the Company earned a slight operating profit.
At the property level, the Company generated $1,526,197 cash for the 9
months or $572,224 cash during the three months.
After deducting all cash expenses, including G&A and financial expenses,
the Company generated $693,005 cash for the 9 months and $308,699 cash
during the three months.
The Company also announced that it has published its restated interim
financial statements in compliance with IFRS rules, for the periods
ended September 30, 2011 and December 31, 2011, which are available on
The Company also announced that 950,000 stock options were issued to
directors and consultants under the terms of the Rolling Stock Option
Plan approved by the shareholders on January 12, 2012, with each new
option issued having an exercise price of 28 cents, and all new options
vesting in six equal quarterly instalments. The options issuance is
subject to the approval of the TSX Venture Exchange.
ABOUT GALE FORCE PETROLEUM INC. − www.GaleForcePetroleum.com
Gale Force Petroleum is a public corporation focused on acquiring and
exploiting underdeveloped and undervalued oil and gas reserves in
mature basins, bringing operational expertise and capital to
lower-risk, development-type projects. The Company currently owns
producing oil and gas properties in Texas, Oklahoma, Tennessee and West
"Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release."
SOURCE GALE FORCE PETROLEUM INC.
For further information:
Michael McLellan, CFA, Chairman & CEO, +1.514.221.2030