Amex Accepts Galaxy Energy's Amended Plan to Meet Amex's Continued Listing Standards

    DENVER, CO, Oct. 18 /CNW Telbec/ - Galaxy Energy Corporation (Amex:   GAX)
has received a notice from the American Stock Exchange (Amex) indicating that
Amex has accepted Galaxy's amended plan to regain compliance with the
exchange's continued listing standards.
    On October 15, 2007, Amex notified Galaxy that the company had made a
reasonable demonstration of its ability to regain compliance with the
exchange's continued listing standards based on the plan submitted to Amex on
August 30, 2007. Amex has accepted Galaxy's plan based on the expectation that
Galaxy will complete a sale of certain of its assets and utilize the proceeds
to pay down a significant portion of its outstanding debt. Amex has continued
Galaxy's listing pursuant to an extension until December 31, 2007, by which
time Galaxy must regain compliance with the continued listing standards.
Galaxy will be subject to periodic review by Amex staff during the extension
period. Failure to make progress consistent with the plan or to regain
compliance with the continued listing standards by the end of the extension
period could result in Galaxy being delisted from Amex.
    The notice from Amex reiterates Galaxy's failure to satisfy Section
1003(a)(i), Section 1003(a)(ii), and Section 1003(a)(iii) of the Amex Company
Guide for continued listing. Specifically, Galaxy has reported stockholders'
equity of less than $2 million and losses from continuing operations and/or
net losses in two out of its three most recent fiscal years; has reported
stockholders' equity of less than $4 million and losses from continuing
operations and/or net losses in three out of its four most recent fiscal
years; and has reported stockholders' equity of less than $6 million with
losses from continuing operations and/or net losses in its five most recent
fiscal years, respectively.
    On September 4, 2007, Galaxy announced that the company and its wholly
owned subsidiary Dolphin Energy Corporation have begun discussions with
unrelated companies regarding the potential sale of a portion of its
leaseholds in the Powder River Basin in Wyoming. Galaxy intends to sell a
portion of the Powder River Basin assets with sufficient market value to allow
Galaxy to either fully repay or substantially repay its senior debt.
    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 about 365,000 cubic feet per day. The remaining wells are in
various stages of dewatering, shut-in waiting on pipeline, or waiting to be

    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, 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:; Eric St-Pierre:, (514) 939-3989, Fax: (514) 939-3717,

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