Gale Force Petroleum to be reinstated to trading, closes debt restructuring,
$1.5 million refinancing and three acquisitions in trust

MONTREAL, Feb. 10 /CNW Telbec/ - Gale Force Petroleum Inc. (TSX Venture: GFP, the "Corporation") today announced that it has closed in trust a series of transactions to conclude the restructuring of its debts, re-finance the Corporation and acquire new properties. These transactions were previously announced on September 25, 2009 and on January 20, 2010.

SHARE CONSOLIDATION & REINSTATEMENT TO TRADING

The shares of the Corporation were consolidated on a basis of one (1) new share for each fifty (50) old shares. There are now an aggregate 1,243,187 common shares of the Corporation issued and outstanding. The Corporation has been advised that trading in the post-consolidated shares of the Corporation are scheduled to be reinstated effective the opening Friday, February 12, 2010 on the TSX Venture Exchange.

SERIES OF TRANSACTIONS

The Corporation today announced that it has closed several transactions in trust (the "Transactions") which, in the aggregate, should permit the Corporation to stave off insolvency and provide a viable future for the Corporation.

The Transactions are summarized in point form as follows (greater details are provided below):

    
    - Three purchase agreements have been closed in trust to purchase oil and
      gas properties in Texas, Oklahoma and Tennessee with estimated future
      cash flows from proved reserves estimated at $12.4 million;

    - To finance the property acquisitions and to complete its restructuring,
      the Corporation has closed in trust a first tranche of CA$1,507,500 out
      of a maximum CA$3,500,000 in a private placement of shares issued at a
      price of twenty-five cents (CA$0.25) per share and one half-warrant per
      share with an exercise price of thirty-seven and one half cents
      (CA $0.375) and a term of one year.

    - A new agreement was closed in trust with the holders of the
      Corporation's CA$1,830,000 secured loan to:

        - Write-down CA$980,000;
        - Convert CA$400,000 into 1,600,000 common shares of the Corporation
          at a price of twenty-five cents (CA$0.25) per share; and
        - Convert the balance of CA$450,000 into Series I Preferred Shares,
          convertible into up to 1,800,000 common shares of the Corporation;
    

The Corporation has received the conditional approval from the TSX Venture Exchange for the closing of the Transactions, which requires the Corporation to meet various conditions, including the filing on SEDAR of a full disclosure document providing all pertinent details about the purchase of the target assets (the "Filing Statement"). The Corporation anticipates filing such Filing Statement on or about the end of February, 2010, at which time the Transactions will be released from escrow. The Transactions will therefore be held in trust until these requirements are met.

TRANSACTION DETAILS

    
    Revised New Conditional Agreement for the Discharge of the Corporation's
    Secured Loan
    

The Corporation's new agreement with the holders of its CA$1,830,000 secured loan (the "Lenders") is to write-down CA$980,000 of the loan, convert CA$400,000 of the loan into 1,600,000 common shares of the Corporation issued at a price of twenty-five cents (CA$0.25) per share and convert the balance of CA$450,000 into Series I Preferred Shares, such preferred shares being convertible into up to 1,800,000 common shares of the Corporation provided that the number of common shares acquired by the principal Lender, Primatlantis Capital, L.P. ("Primatlantis"), upon any such conversion, when combined with the number of Common Shares owned or controlled, directly or indirectly, by Primatlantis prior to the conversion, does not exceed ten percent (10%) of the shares issued and outstanding of the Corporation (collectively, the "Revised New Conditional Agreement").

The Revised New Conditional Agreement is conditional upon the Corporation closing the other Transactions. Of the total 3,400,000 common shares of the Corporation that may be issued to the Lenders, under separate agreements, directors and officers of the Corporation will have the right to purchase 560,000 common shares from the Lenders until February 28, 2011 at a price of twenty-five cents (CA$0.25) per share.

Until the release from escrow of the Transactions, one of the secured Lenders, Primatlantis shall provide interim financing to the Corporation of approximately $200,000 over and above the value of the secured loan, which the Corporation shall use mainly to make advance payments towards the purchase of the acquisitions described below, and which shall be repaid to the Lenders in priority to any other disbursements upon closing of the private placement.

Private Placement

To finance the acquisitions (described in greater detail below), and to complete its restructuring, the Corporation has closed in trust a tranche of $1,507,500 out of a maximum $3,500,000 in a private placement of units (the "Units") issued at a price of twenty-five cents (CA$0.25) per Unit, comprised of one common share of the Corporation (the "Common Shares") and one-half (1/2) warrant per Common Share (the "Warrants").

Of the $1,507,500 raised in this tranche, insiders of the Corporation or entities under their control subscribed for a total $140,000.

Between 6,030,000 Units and 14,000,000 Units in total will be issued as part of the private placement. Each whole Warrant shall entitle its holder to purchase one (1) common share of the Corporation for twelve (12) months from the closing date at a purchase price of thirty-seven and one half cents (CA$0.375) per common share (the "Warrant Shares").

In connection to the closing of the $1,507,500 tranche of the private placement, the Corporation shall pay finder's fees comprised of $106,500 in cash and $19,250 via the issuance 79,000 Units, to several finders at arms-length to the Corporation and all parties involved in the related transactions.

The Corporation may also pay further finder's fees equal to up to 10% of any additional gross proceeds of the financing, a portion of which may be paid through the issuance of Units.

Property Purchases

The Corporation has entered into agreements to purchase three property assets.

Please note that the definitions of "proved reserves", "proved developed reserves", "proved developed non-producing reserves", "proved undeveloped", "probable reserves" and "possible reserves" used herein are consistent with the Canadian Oil and Gas Evaluator's Handbook in compliance with Canadian National Instrument 51-101. Please also note that the estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation, and the estimated values disclosed herein do not represent fair market value.

The three property asset acquisitions the Corporation purchased are as follows:

    
    (1) Acquisition #1. The Corporation has closed in trust the
        purchase of a 100% working interest with an 80% net revenue interest
        in an oil property in East Texas with 6 non-producing wells on 1,200
        gross acres (1,200 net acres) (the "Wells Ranch Property").

        In a report titled "Evaluation of Reserves Attributable to Gale Force
        Petroleum in J.C. Wells Field, Wood County, Texas" prepared as at
        December 1, 2009, the reserves of the Wells Ranch Property were
        estimated by an independent qualified reserves evaluator, Waterson
        Calhoun, P. Eng., at Crest Engineering Services(xxx), as described in
        the following table:

    -------------------------------------------------------------------------
                  Oil Reserves for the Wells Ranch Property
    -------------------------------------------------------------------------
                    Light & Medium Oil       Heavy Oil      Net Present Value
                    ---------------------------------------   of Future Net
    Reserve Category                                         Revenues Before
                     Gross      Net       Gross       Net      Income Taxes
                     (bbls)    (bbls)     (bbls)     (bbls)    (10% Discount
                                                                  Rate)(xx)
    -------------------------------------------------------------------------
    Undeveloped      68,900    51,700          0          0      $2,491,000
    -------------------------------------------------------------------------
    Total Proved     68,900    51,700          0          0      $2,491,000
    -------------------------------------------------------------------------
    Probable         20,900    15,700      5,800      4,400        $330,000
    -------------------------------------------------------------------------
    Total Proved
     Plus Probable   89,800    67,400      5,800      4,400      $2,821,000
    -------------------------------------------------------------------------
    Possible         23,000    17,300      6,700      5,000        $375,000
    -------------------------------------------------------------------------
    Total Proved
     Plus Probable
     Plus Possible  112,800    84,700     12,500      9,400      $3,196,000
    -------------------------------------------------------------------------

    *The reserves were estimated using NYMEX (WTI) prices of $76,72 for
    2009, $81,08 for 2010 and $85,71 for 2011, held constant thereafter, with
    a price differential of -$15 per barrel for Sub Clarksville production
    and -$3.50 for Paluxy production, such differentials being held constant
    for the life of the reserves.
    (xx)All reserves quantities are undiscounted estimates; only the Net
    Present Value of Future Net Revenues in the last column of the table are
    discounted estimates.
    (xxx)Waterson Calhoun, P.Eng, is a consultant to the Corporation who
    works regular with the Corporation to evaluate reserves and operations on
    its properties.


        The consideration for the Wells Ranch Property purchase is US$100,000
        in cash and CA$100,000 via the issuance of 400,000 common shares of
        the Corporation issued at a price of twenty-five cents (CA$0.25) per
        share.

        The Vendor of the Wells Ranch Property is at arms-length to the
        Corporation.

    (2) Acquisition #2. The Corporation has closed in trust the
        purchase of a 75.5% working interest with an 80% net revenue interest
        in a second oil property in East Texas with 27 non-producing well
        bores on 900 gross acres (680 net acres) (the "Pine Mills Property").

        In a report titled "Evaluation of Reserves Attributable to Gale Force
        Petroleum in Pine Mills Field, Wood County, Texas" prepared as at
        December 1, 2009, the reserves of the Pine Mills Property were
        estimated by an independent qualified reserves evaluator, Waterson
        Calhoun, P.Eng at Crest Engineering Services(xxx), as described in
        the following table:


    -------------------------------------------------------------------------
                   Oil Reserves for the Pine Mills Property
    -------------------------------------------------------------------------
                              Heavy Oil
                                              Net Present Value of Future Net
    Reserve Category    ---------------------   Revenues Before Income Taxes
                          Gross       Net          (10% Discount Rate)(xx)
                          (bbls)     (bbls)
    -------------------------------------------------------------------------
    Developed
     Non-Producing        26,400      16,700                       $379,000
    -------------------------------------------------------------------------
    Total Proved          26,400      16,700                       $379,000
    -------------------------------------------------------------------------
    Probable              57,100      35,800                       $688,000
    -------------------------------------------------------------------------
    Total Proved Plus
     Probable             83,500      52,500                     $1,067,000
    -------------------------------------------------------------------------
    Possible             440,700     275,300                     $5,044,000
    -------------------------------------------------------------------------
    Total Proved Plus
     Probable Plus
     Possible            524,200     327,800                     $6,111,000
    -------------------------------------------------------------------------

    *The reserves were estimated using a discount rate of 10%, using NYMEX
    prices of $76,72 for 2009, $81,08 for 2010 and $85,71 for 2011, held
    constant thereafter, with a price differential of -$18.39 per barrel,
    such differentials being held constant for the life of the reserves.
    (xx)All reserves quantities are undiscounted estimates; only the Net
    Present Value of Future Net Revenues in the last column of the table are
    discounted estimates.
    (xxx)Waterson Calhoun, P.Eng, is a consultant to the Corporation who
    works regular with the Corporation to evaluate reserves and operations on
    its properties.

        The consideration for the Pine Mills Property is the assumption of
        approximately US$500,000 in short-term, unsecured trade payables.

        The Vendor of the Pine Mills Property is at arms-length to the
        Corporation.

    (3) Acquisition #3. The Corporation has closed in trust the
        purchase of 100% of the shares of Buccaneer Energy Corporation, LLC,
        a private oil and gas company based in Dallas, Texas ("Buccaneer"),
        which has oil and gas properties located in Texas, Oklahoma and
        Tennessee.

        Buccaneer's oil and gas assets are mainly 100% working interest
        holdings, and one 20% working interest in a non-operated property,
        with 10 producing wells and 15 non-producing wells on a total of
        5,970 gross acres (2,620 net acres), and such assets also include
        operating equipment, including one workover rig, as well as two
        operating subsidiaries that hold no assets but are the registered
        entities that operate Buccaneer's properties in Texas and Oklahoma.

        In a report titled "Appraisal of Certain Oil and Gas Properties Owned
        by Buccaneer Energy Corporation Located in Oklahoma, Tennessee, and
        Texas" as at October 1, 2009, Buccaneer's oil and gas reserves were
        estimated by an independent qualified reserves evaluator, Michele K.
        Mudrone, P.Eng, at MKM Engineering, using a discount rate of 10%, and
        using NYMEX prices until 2019 held constant thereafter* as
        described in the following table:

    -------------------------------------------------------------------------
             Oil and Gas Reserves of Buccaneer Energy Corporation
    -------------------------------------------------------------------------
                    Light & Medium Oil      Natural Gas     Net Present Value
                    ---------------------------------------   of Future Net
    Reserve Category                                         Revenues Before
                     Gross      Net       Gross       Net      Income Taxes
                     (bbls)    (bbls)     (bbls)     (bbls)    (10% Discount
                                                                  Rate)(xx)
    -------------------------------------------------------------------------
    Developed
     Producing       45,000    36,000    302,000    237,000       1,751,000
    -------------------------------------------------------------------------
    Developed
     Non-producing  145,000   113,000    617,000    481,000       5,436,000
    -------------------------------------------------------------------------
    Undeveloped      74,000    58,000    417,000    328,000       2,292,000
    -------------------------------------------------------------------------
    Total Proved    264,000   207,000  1,336,000  1,046,000       9,479,000
    -------------------------------------------------------------------------

    *The reserves were estimated using NYMEX (WTI) prices of $70. 27 for
    2009, $70.94 for 2010 and $75.76 for 2011, etc., with a price adjustment
    to the NYMEX prices that is indexed to the monthly average of the daily
    closing prices received on the properties at the Cushing, Oklahoma
    delivery point.
    (xx)All reserves quantities are undiscounted estimates; only the Net
    Present Value of Future Net Revenues in the last column are discounted
    estimates.

    The consideration for the purchase of Buccaneer is:

    (i)    The issuance 6,543,421 common shares of the Corporation issued at
           twenty-five cents (CA$0.25) per share with a total issuance value
           of CA$1,635,855, out of which 1,164,680 common shares are applied
           to discharge CA$291,170 (US$276,612) in liabilities of Buccaneer
           simultaneous with the closing;

    (ii)   The issuance of CA$256,073 in preferred shares of the Corporation,
           such preferred shares being convertible into up to 1,024,291
           common shares of the Corporation, out of which CA$234,474
           (US$222,750) of the preferred shall issued be paid to discharge
           liabilities of Buccaneer simultaneous with the closing;

    (iii)  The issuance of 672,340 warrants to purchase common shares of the
           Corporation for a term of one year and an exercise price of
           thirty-seven and one half cents (CA$0.375) per common share; and

    (iv)   The assumption of approximately US$1,294,844 in gross liabilities,
           which is calculated as US$1,794,206 total liabilities as at
           December 31, 2009 less the US$499,362 that shall be repaid and
           discharged by the issuance of common shares and preferred shares
           at closing (see sub-paragraphs (i) and (ii) above). The net
           working liabilities assumed is US$833,034, which can be calculated
           as US$301,560 current assets less US$161,328 in current
           liabilities, less US$808,796 in long-term bank debt, less
           US$164,520 in shareholder advances; this can otherwise be
           calculated as US$1,275,061 in gross liabilities, less US$160,200
           in deferred income taxes, less US$301,560 in current assets.
    

The total "deemed consideration" for Buccaneer and all its assets, including its current assets, is therefore CA$3,254,922 (CA$1,635,855 in common shares, CA$256,073 in preferred shares and CA$1,362,993 in total liabilities using an exchange rate of CAD/USA=0.95) .

The largest shareholder of Buccaneer, Mr. Chip Langston, who will become an officer of the Corporation upon the closing of the transaction, will be the sole recipient of the preferred shares, and these preferred shares shall only be convertible into common shares of the Corporation provided that the number of common shares acquired by Mr. Langston upon any such conversion, when combined with the number of Common Shares owned or controlled, directly or indirectly, by Mr. Langston prior to the conversion, does not exceed five percent (5%) of the shares issued and outstanding of the Corporation.

The following table shows historical summary financial information for Buccaneer:

    
    -------------------------------------------------------------------------
        Balance Sheets        As at June 30, 2009    As at December 31, 2009
                                    (audited)               (unaudited)
    -------------------------------------------------------------------------
    Current Assets                      $624,206                   $301,560
    -------------------------------------------------------------------------
    Capitalized Exploration
     and Development                  $3,599,630                 $4,158,690
    -------------------------------------------------------------------------
    Oil and Gas Services Equipment      $250,000                   $195,833
    -------------------------------------------------------------------------
    TOTAL Assets                      $4,473,836                 $4,656,083
    -------------------------------------------------------------------------
    Current Liabilities                  106,922                    161,328
    -------------------------------------------------------------------------
    Liabilities to be Paid
     in Shares at Closing*             499,362                    499,362
    -------------------------------------------------------------------------
    Shareholder Advances(xx)              87,840                    164,520
    -------------------------------------------------------------------------
    Bank Note at 6% (variable interest)  752,000                    808,796
    -------------------------------------------------------------------------
    Deferred Income Taxes                160,200                    160,200
    -------------------------------------------------------------------------
    TOTAL Liabilities                 $1,606,324                 $1,794,206
    -------------------------------------------------------------------------
    TOTAL Shareholder's Equity        $2,867,512                 $2,861,877
    -------------------------------------------------------------------------
                                For the Year Ended   For the Six Months Ended
    Income Statements for the      June 30, 2009          December 31, 2009
           Year ended                (unaudited)              (unaudited)
    -------------------------------------------------------------------------
    Oil and Gas Revenues                $514,123                   $164,253
    -------------------------------------------------------------------------
    Other Revenues                         4,754                     27,200
    -------------------------------------------------------------------------
    TOTAL Revenues                       518,877                   $191,453
    -------------------------------------------------------------------------
    Severance Taxes                       36,463                      9,978
    -------------------------------------------------------------------------
    Lease Operating Expenses             315,439                     19,417
    -------------------------------------------------------------------------
    General & Administrative             195,808                     91,014
    -------------------------------------------------------------------------
    Depreciation, Depletion and
     Amortization                        304,013                     50,450
    -------------------------------------------------------------------------
    Interest Expense                      55,419                     16,170
    -------------------------------------------------------------------------
    NET Income                         ($388,265)                    $4,425
    -------------------------------------------------------------------------

    *These liabilities are composed of US$339,145 in shareholder advances
    of Buccaneer and a US$180,000 payable, which shall be repaid at closing
    via the issuance of 1,164,680 common shares of the Corporation to
    discharge CA$291,170 (US$276,612) of liabilities and CA$255,298
    (US$242,533) in preferred shares convertible into up to 1,021,192 shares
    of the Corporation out of the total consideration paid by the Corporation
    for Buccaneer.
    (xx)Of the Shareholder Advances debt assumed, US$107,145 shall be repaid
    in the short-term after closing; the balance of US$57,375 is a long-term
    unsecured note bearing 6% interest.
    

More thorough financial disclosure about Buccaneer shall be provided prior to closing the Transactions when the Corporation publishes the Filing Statement on or about the end of February, 2010, at which time the Transactions will be released from escrow.

Upon the release from escrow of the Transactions, three new persons will join the Corporation:

    
    (1) Mr. Chip Langston, will become the President and CEO and a director
        of the Corporation. Mr. Langston has over 30 years experience in
        executive and operational management in the public and private oil
        and gas companies. In 1979, Mr. Langston was a key principal of
        TransWestern, a TSX listed oil and gas company, which was sold in
        1983 at a profit. In 1989, Mr. Langston was a also key principal of
        Search Exploration, a NASDAQ listed company, which was sold at a
        profit in 1993 to a junior major. Mr. Langston's has since built
        private oil companies, including Buccaneer.

    (2) Mr. Steve Hood, will become a director of the Corporation. Mr. Hood
        is a professional director, having throughout his career helped grow
        small private and public companies in to large companies, mainly in
        the insurance, healthcare and investments industries.

    (3) Mr. Eddie Loudon, P. Geol, will become a director of the Corporation.
        Mr. Loudon has 30 years of experience managing oil and gas companies
        and performing geological research, with a focus in Texas.
    

Upon the addition of Messrs. Langston, Hood and Loudon, the Board of Directors and Officers of the Corporation will be as follows:

    
    -------------------------------------------------------------------------
          Board of Directors                      Officers
    -------------------------------------------------------------------------
    Michael McLellan - Executive    Chip Langston - President and CEO
     Chairman
    -------------------------------------------------------------------------
    Roman Boyko - Chairman of       Michael McLellan - Executive Chairman
     Audit Committee
    -------------------------------------------------------------------------
    Guillaume Dumas                 Antoinette Lizzi - Vice-President and CFO
    -------------------------------------------------------------------------
    Mazen Haddad                    Michael McLellan - Corporate Secretary
    -------------------------------------------------------------------------
    Steve Hood
    ------------------------------
    Chip Langston
    ------------------------------
    Antoinette Lizzi
    ------------------------------
    Eddie Loudon
    ------------------------------
    

STOCK OPTION PLAN

The Corporation has amended its stock option plan and issued stock options under the new plan. The Amended Stock Option Plan permits the Corporation to issue up to 125,000 options (post-share-consolidation), which is less than 10% of shares of the Corporation issued and outstanding. The Corporation issued options to purchase an aggregate 125,000 shares of the Corporation at a price of $0.25 (post-share-consolidation), which expire at latest on February 11, 2015; 25,000 option to each of the Corporation's directors. The Amended Stock Option Plan and the issuance of options are subject to the approval of the TSX Venture Exchange.

TRANSACTIONS SUMMARY

The table below displays an example of the capital structure of the Corporation following the closing of the Transactions:

    
    -------------------------------------------------------------------------
                                                                      Issue /
                                                        Quantity   Exercise /
                                                       (Issued or  Conversion
      Shareholder Group            Securities          Underlying)    Price
    -------------------------------------------------------------------------
    Existing Shareholders    Common Shares               1,243,187        -
    -------------------------------------------------------------------------
    Secured Lender           Common Shares               1,600,000    $0.25
    -------------------------------------------------------------------------
    Acquisitions             Common Shares               6,943,421    $0.25
    -------------------------------------------------------------------------
    Private Placement
     ($1,507,500)            Common Shares               6,030,000    $0.25
    -------------------------------------------------------------------------
    TOTAL Common Shares I&O                             15,816,608
    -------------------------------------------------------------------------
    Warrants                 Warrants                    3,687,340   $0.375
    -------------------------------------------------------------------------
    Employee Options         Options                     1,186,246      TBD
    -------------------------------------------------------------------------
    Secured Lenders          Series I Preferred Shares   1,800,000    $0.25
    -------------------------------------------------------------------------
    Mr. Chip Langston        Series I Preferred Shares   1,024,291    $0.25
    -------------------------------------------------------------------------
    TOTAL Fully Diluted                                 23,514,485
    -------------------------------------------------------------------------
    

Following the closing of the Transactions, management of the Corporation considers that the restructuring of the Corporation completed. The restructuring has resulted in the elimination of the Corporation's secured loan, a substantial increase in the size and potential of the Corporation's oil and gas reserves, and sufficient working capital and cash flow from operations to continue as a going concern.

ABOUT GALE FORCE PETROLEUM INC.(TM) - www.GaleForcePetroleum.com

Gale Force Petroleum is a public corporation focused on acquiring and exploiting unconventional and conventional gas resources in mature basins, building shareholder value through accretive opportunistic acquisitions and development of its properties. It owns producing natural gas properties in Kentucky, USA.

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 - especially but not limited to any geological or reservoir information not supported by a NI 51-101 report - are based on assumptions and estimates that are subject to various risks and uncertainties including but not limited to geological risk, engineering risks, market risk and the risks disclosed under the heading "Business Risks" in the Corporation's periodic filings with Canadian securities regulators, including most recently in its Management Discussion and Analysis for the annual exercise ended June 30, 2009 available on SEDAR. 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 forward-looking statements.

"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, Chairman and CEO, (514) 333-9292

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