DALLAS, July 3, 2013 /CNW/ - Gale Force Petroleum Inc. (TSXV: GFP) (OTCQX: GFPMF) (the "Company" or "Gale Force") acknowledges receipt of a request from Iroquois Capital Opportunity
Fund LP ("Iroquois") and certain other shareholders for a meeting of the shareholders of
Gale Force to be called in order to reconstitute the Board of Directors
of Gale Force, as previously publicly announced by Iroquois.
Gale Force will be creating a special committee of independent directors
to study such request and to consider an appropriate response thereto,
which response shall be provided by Gale Force in due course.
In the interim, the Company wishes to respond to certain allegations put
forward by Iroquois.
As can be seen in the following chart, Gale Force's stock has
outperformed the market and its peer group since the dissident
shareholder Iroquois made its initial investment in May, 2011. The
period showing the largest decline in the price of the Company's shares
coincides with what the Company believes to be Iroquois' selling off of
a significant portion of its position. Recently, the share price and
daily trading volumes for the Company's shares have improved
significantly, responding favourably to the announcement by the Company
of its plans for a strategic transaction.
Recent Stock Options Issuance
The recent issuance of stock options to management and employees of the
Company was approved by the Board of Directors based on a
recommendation by a Committee of independent directors of the Company
formed to address the issue, and was the result of a process of
evaluating and deliberating on comprehensive management compensation
that was initiated over one year prior to the issuance of the
aforementioned stock options. The Committee was guided by an
independent analysis of compensation revealing that the management of
Gale Force are significantly underpaid when compared with their peers,
and this despite the Company's superior fundamental performance
(management of Gale Force receives lower cash salaries than peers,
receives no benefits, and until the options issuance received
significantly less equity-based compensation). Notwithstanding the
correspondence received from Iroquois, it was the conclusion of the
Board of Directors that the Company should act in the normal course of
business and treat its employees in good faith, and it therefore
decided that the stock option issuance was appropriate and would ensure
the proper alignment of management's and shareholders' interests as the
Company seeks a strategic alternative.
Strategic Alternative Review
Gale Force owns an attractive portfolio of cash flow positive oil & gas
assets with significant upside potential that are not being properly
valued by the public markets.
Management of the Company remains of the belief that a merger or sale of
Gale Force is the best means by which to maximize shareholder value and
is continuing with its efforts to seek a strategic transaction in a
serious and methodical manner.
The proposal being put forth by Iroquois is, in management's view, much
less compelling. It is nothing more than an attempt by Iroquois to
gain control of Gale Force without paying a control premium to
shareholders. Iroquois' proposal serves only to cause Gale Force to
incur significant additional costs and delays as a result of the
About Gale Force Petroleum Inc. − www.GaleForcePetroleum.com
Gale Force Petroleum is a public corporation focused on acquiring and
exploiting underdeveloped 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, Tennessee and West Virginia.
Cautionary Statement Regarding Forward-Looking Statements:
Certain statements in this press release contain forward-looking
statements. All forward-looking statements are based on the Company's
current expectations, estimates, projections, beliefs and assumptions
based on information available at the time the statement was made and
in light of the Company's experience and its perception of historical
trends. Some of the forward-looking statements may be identified by
words like "expected", "subject to", "will be" and similar expressions.
In addition, all other statements that address expectations or
projections about the future, including statements about potential
future transactions, are forward-looking statements. Forward-looking
statements are not guarantees of future performance and involve a
number of risks and uncertainties, some that are similar to other oil
and gas companies and some that are unique to the Company, and the
other risks described in the Company's continuous disclosure filings
with securities regulators available under the Company's profile at
www.sedar.com. The Company's actual results may differ materially from
those expressed or implied by the Company's forward-looking statements
and you are cautioned not to place undue reliance on them. The Company
does not assume any obligation to update any forward-looking statements
contained in this press release, except as required by applicable law.
Neither the 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.
Image with caption: "See above or go to http://galeforcepetroleum.com/gale-force-responds-to-dissident-shareholder/ to see chart (CNW Group/GALE FORCE PETROLEUM INC.)". Image available at: http://photos.newswire.ca/images/download/20130703_C5144_PHOTO_EN_28744.jpg
SOURCE: GALE FORCE PETROLEUM INC.
For further information:
Michael McLellan, CFA, Co-Chairman & CEO, +1.888.440.3411, or MMcLellan@GaleForcePetroleum.com