Gale Force Petroleum announces results of shareholder's meeting, plans for
restructuring, refinancing and acquisitions

MONTREAL, Jan. 20 /CNW Telbec/ - Gale Force Petroleum Inc. (TSX Venture: GFP, the "Corporation") today provided an update on the current status of its restructuring and the status of transactions that were previously announced on September 25, 2009.


The Corporation's shares will remain suspended from trading until the TSX Venture Exchange approves the Corporation's application for Reinstatement to Trading. The suspension from trading was due to a delay in the publication of the Corporation's annual report and associated filings for the year ended June 30, 2009 and for the interim period ended September 30, 2009. The delays in the publication of these reports were the result of the ongoing restructuring of the Corporation. These filings have now been made and are available on or on the Corporation's website at


On January 15, 2010, the Corporation held an annual and special meeting of its shareholders. All motions proposed by the Corporation were approved by significant majorities of the Shareholders.


The Shareholders elected five members to the Board of Directors, including a new Director, Mr. Roman Boyko, who will also serve as the Chairman of the Corporation's Audit Committee. Mr. Boyko was a member of L'Ordre des Comptables Agréés du Québec from 1962 until 2008. Mr. Boyko was previously a partner of Coopers & Lybrand from 1983 to 1989 and a partner of Boyko, Joly Chartered Accountants from 1989 until 2005, where he specialized in Business Interruptions Claims and Litigation, an area in which he continues to work as an independent consultant.

    The following table summarizes the Corporation's current directors and

    Board of Directors                         Officers
    Michael McLellan -                         Michael McLellan -
    Chairman of the Board                      President and CEO
    Roman Boyko -                              Antoinette Lizzi -
    Chairman of the Audit Committee            Vice-President and CFO
    Guillaume Dumas
    Mazen Haddad
    Antoinette Lizzi


The Shareholders approved a consolidation of the Corporation's common shares on the basis of one (1) new share for fifty (50) old shares. There are currently 62,677,178 common shares of the Corporation issued and outstanding. Following the consolidation there will be 1,253,544 common shares issued and outstanding. The effective date of the consolidation will be prior to the resumption in trading of Corporation's shares. The consolidation is subject to the approval of the TSX Venture Exchange.


The Shareholders approved the creation of a new class of preferred shares of the Corporation issuable in series. The Corporation currently has only one class of share capital, being common shares. The purpose of the preferred shares is to aid in the restructuring of the Corporation's debts and to provide the Corporation with the flexibility it needs to complete the Proposed Transactions,


The Corporation intends to complete several transactions (the "Proposed Transactions") to complete the restructuring of its debts and acquire new assets, which could permit the Corporation to stave off insolvency and provide a viable future for the Corporation.

The Proposed Transactions are summarized in point-form here. Greater details will be provided in a subsequent news release prior to the resumption in trading of the Corporation's shares.

    - A new conditional agreement has been reached with the holder 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 (post share
          consolidation); 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;

    - Three property asset purchase agreements have been signed to purchase
      oil and gas properties and assets in Texas, Oklahoma and Tennessee;

    - To finance the property acquisitions and to complete its restructuring,
      the Corporation intends to close an equity financing of between CA
      $1,000,000 and 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) (post share consolidation) and a term of one year.

The Proposed Transactions are subject to the approval of the TSX Venture Exchange and other customary regulatory approvals.


On November 16, 2009, an agreement to settle a litigation brought by the Corporation has been reached by the Corporation and the defendant, and the Corporation was paid gross $700,000 or $500,000 net of trial costs on December 16, 2009 under the terms of the agreement. Of the $500,000 net proceeds, the Corporation disbursed $200,000 to repay advances that had been made to it by its secured creditor over and above the secured loan amount and a further $200,000 was used to pay down the Corporation's $2,030,000 secured loan, reducing the balance of the loan to $1,830,000. The remainder of the funds were dispersed to discharge some of the Corporation's accumulated short-term liabilities, to pay for the administrative costs of bringing the Corporation into compliance with its reporting obligations, and to pay some of the costs of obtaining the necessary regulatory and shareholder approvals of the transactions discussed herein.

Under the terms of the Proposal to Creditors filed by the Corporation on February 4, 2009, the Corporation has issued 43,208,876 common shares to settle claims. The Corporation also issued 1,270,000 common shares on September 22, 2008 and 400,000 common shares on November, 2008 to creditors in shares for debt transactions, which also were part of the Corporation's restructuring. There are now currently 62,677,178 common shares of the Corporation issued and outstanding.


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, 2008 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.

"The TSX Venture Exchange has not reviewed this release and therefore does not accept responsibility for its adequacy or accuracy."

SOURCE Gale Force Petroleum Inc.

For further information: For further information: Michael McLellan, Chairman and CEO, (514) 333-9292

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