MONTREAL, Aug. 5 /CNW Telbec/ - Gale Force Petroleum Inc. (TSX Venture: GFP, the "Corporation") today announced that it has reached agreements with two of its directors to provide their personal guarantees of the Corporation's "Line of Credit" with Park Cities Bank. Future withdrawals from the Line of Credit will be used for the purchase and development of new properties, including the Kilgore Properties that were announced on June 2, 2010.
The Corporation had already obtained an increase in the borrowing base on its "Line of Credit" with Park Cities Bank of Dallas, Texas, to US$2.2 million, announced on June 10, 2010. The Line of Credit has a maturity date of October 1, 2011 and bears interest equal to the WSJ Prime Rate plus 1.5%, but no less than 6.5% per annum. To induce Park Cities Bank to provide the Line of Credit, the Corporation's CEO, Chip Langston, and a director, Steve Hood, have agreed to provide personal guarantees on the loan (the "Guarantee"), underscoring their commitment to the growth and success of the Corporation.
In consideration of the Guarantee, Messrs. Hood and Langston shall each be paid 2% of the potential borrowing base of the US$2.2 million Line of Credit, for the period from July 1, 2010 to July 1, 2011. Withdrawals from the Line of Credit are at the sole discretion of the Corporation during this period. The Guarantee agreement with Messrs. Hood and Langston is a non-arm's length transaction, and is subject to TSX Venture Exchange approval.
ABOUT GALE FORCE PETROLEUM INC. - www.GaleForcePetroleum.com
Gale Force Petroleum is a public corporation with a focus on the development and exploitation of oil and gas resources in mature basins, building shareholder value by making accretive acquisitions and developing its properties. It owns oil and natural gas properties in Texas, Oklahoma, Tennessee and Kentucky.
"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, Executive Chairman, +1.514.221.2030