Galaxy Energy and PetroHunter Energy Corporation Agree to Extend Closing Date on Sale of Galaxy's Powder River Basin Oil and Gas Assets



    DENVER, CO, March 1 /CNW Telbec/ - Galaxy Energy Corporation (Amex:   GAX)
and its wholly owned subsidiary, Dolphin Energy Corporation, have agreed to an
amendment to the Purchase and Sale Agreement (PSA) with PetroHunter Energy
Corporation, which extends the closing date to March 31, 2007, in connection
with PetroHunter's efforts to obtain financing. Marc A. Bruner, a 14.1%
beneficial shareholder of Galaxy, is the 75% owner of MAB Resources, LLC which
is PetroHunter's largest shareholder. In addition, Marc A. Bruner is the
father of Marc E. Bruner, Galaxy's President and Chief Executive Officer and a
director.
    Under the terms of the PSA, which was originally signed on December 29,
2006, PetroHunter agrees to pay a total consideration of $45 million to
acquire all of Galaxy/Dolphin's oil and gas working interests in Sheridan,
Johnson, Converse and Campbell Counties in Wyoming, and Big Horn, Custer,
Powder River and Rosebud Counties in Montana. The agreement calls for
$20 million to be paid in cash and the remainder to be paid in PetroHunter
common stock. Closing of the transaction will be subject to PetroHunter
obtaining financing on terms acceptable to PetroHunter and approval of the
extension by Galaxy's senior lenders.
    As required under the PSA, PetroHunter made an initial earnest money
deposit to Galaxy in the amount of $2 million. On closing of the transaction,
PetroHunter will receive a credit against the purchase price for the deposit
and expenses incurred by it as contract operator of Galaxy/Dolphin's
properties. If the transaction does not close by March 31, 2007, the total
amount of the deposit and operating expenses incurred by PetroHunter will
convert to a subordinated, unsecured promissory note.
    Either party may terminate the agreement if the closing has not occurred
by March 31, 2007. Galaxy has filed a Form 8-K concerning the amendment to the
PSA with the Securities and Exchange Commission.
    Dolphin owns an average 86% working interest in 197 oil and gas wells in
the Powder River Basin. Twenty-two wells are currently selling gas at an
average rate of 600,000 cubic feet per day. The remaining wells are in various
stages of dewatering, shut-in waiting on pipeline, or waiting to be completed.

    About Galaxy Energy

    Galaxy Energy Corporation, a development stage oil and gas exploration
and production company, focuses its operations in the Powder River Basin of
Wyoming and the Piceance Basin of Colorado, in addition to exploration
activities in Germany and Romania. Galaxy conducts its exploration activities
through two wholly owned subsidiaries, Dolphin Energy Corporation and
Pannonian International, Ltd.

    Forward Looking Statement

    This press release consists of forward looking statements regarding the
intent, belief or current expectations of Galaxy and its management.
Prospective investors are cautioned that any such forward looking statements
are not guarantees of future performance and involve a number of risks and
uncertainties, and actual results could differ materially from those indicated
by such forward looking statements. Galaxy assumes no obligation to update the
information contained in this press release, whether as a result of new
information, future events or otherwise. Please refer to Galaxy's filings with
the United States Securities and Exchange Commission for discussions of risks
and uncertainties found in Forms 10-K (annual report), 10-Q (quarterly report)
and other filings.

    Additional information may be found at the Galaxy Energy Corporation Web
site, www.galaxyenergy.com or by calling Brad Long, Investor Relations/Galaxy
Energy at (800) 574-4294, Bevo Beaven or Warren Laird of CTA Integrated
Communications at (303) 665-4200.




For further information:

For further information: Renmark Financial Communications Inc.: Neil
Murray-Lyon: nmurraylyon@renmarkfinancial.com; Christopher Wells:
cwells@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717,
www.renmarkfinancial.com

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GALAXY ENERGY CORPORATION

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