GALE FORCE PETROLEUM ANNOUNCES LETTER OF INTENT TO PURCHASE COLGATE PROPERTY
MONTREAL, Nov. 29 /CNW Telbec/ - Gale Force Petroleum Inc. (TSX Venture: GFP, the "Company") today announced that it has signed a letter of intent to purchase interests in properties in East Texas (the "Colgate Properties").
The Colgate Properties are located within 5 miles of the Company's existing properties in East Texas and consist of mainly 100% working interests in oil and gas properties that are currently producing, in the aggregate, 105 barrels per day.
"This acquisition will significantly increase the Company's overall production, revenues and cash generation", said Michael McLellan, Chairman and CEO. "Due to its proximity and size, the acquisition will build scale and integrate well into our existing operations in East Texas".
The purchase price for the Colgate Properties is US$2.75 million in cash and CA$1 million in Units of the Company issued at a price of $0.30 per Unit. Each Unit consists of one common share of the Company and one common share purchase warrant of the Company. Each warrant entitles the holder thereof to purchase one common share for $0.50 for a period of 18 months following the Closing Date.
The purchase of the working interests in the Colgate Properties is subject to due diligence and financing, and it is a condition of the agreement that the purchase be concluded prior to the end of 2010. To finance the purchase, the Company expects to obtain bank debt financing for a significant portion of the cash purchase price, with the balance of funds required being raised in a private placement of Units.
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 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."
For further information:
Michael McLellan, CFA, Chairman & CEO, +1.514.221.2030
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