MONTREAL, Dec. 16 /CNW Telbec/ - Gale Force Petroleum Inc. (TSX Venture:
GFP, the "Company") today announced that it has obtained a new secured bank facility from
Green Bank, with a $15 million face note and a $2.5 million borrowing
base (the "Bank Loan"), replacing the Company's former bank facility. The borrowing base of
the Bank Loan is determined as a fraction of the proved developed
producing reserves of the Company. The Bank Loan has a maturity date of
May 1, 2012 and bears interest of 5% per annum.
"The new bank facility with Green Bank provides additional capital to
the Company at a low-interest rate allowing the Company to continue to
develop our properties and finance new acquisitions that are currently
in the pipeline", said Michael McLellan, Chairman and CEO. "With a
solid bank lender, Gale Force Petroleum is well positioned to continue
to expand its portfolio of oil and gas properties."
Green Bank is a rapidly-growing commercial and retail bank based in
Texas, USA, which expects a significant portion of its lending growth
to occur in the oil and gas sector.
The Bank Loan has customary financial requirements, which include
maintaining positive working capital, EBITDA interest coverage and
asset ratios, but also the requirement that the Company hedge 70% of
the anticipated oil and gas production of its proved developed
producing reserves. This hedging both mitigates the risks associated
with the debt to both the bank and the Company, and permits a higher
borrowing base on the Bank Loan.
ABOUT GALE FORCE PETROLEUM INC. − www.GaleForcePetroleum.com
Gale Force Petroleum is a public corporation focused on acquiring and
exploiting 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 and Tennessee.
Forward looking statements:
Statements included herein, including those that express management's
expectations or estimates of our future performance, constitute
"forward-looking statements" within the meaning of applicable
securities laws. Forward-looking statements are based on assumptions
and estimates that are subject to various risks and uncertainties
including the risks disclosed under the heading "Business Risks" in the
Corporation's periodic filings on SEDAR, for example, in its Management
Discussion and Analysis for the annual exercise ended June 30, 2010.
Such information contained herein represents management's best judgment
as of the date hereof based on information currently available. The
Corporation does not assume the obligation to update any
"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: For further information:
Michael McLellan, CFA, Chairman & CEO, +1.514.221.2030