DALLAS,
July 24, 2014 /CNW/ - Gale Force
Petroleum Inc. (TSXV: GFP) (OTCQX: GFPMF) (the
"Company") today announced that it has entered into an
agreement to sell an 81% working interest in its properties in
Henderson and Anderson Counties, Texas (the "Texas Reef Properties") as
well as its 90% interest in a 4-mile natural gas gathering system
on the properties, for an aggregate selling price of US$5,850,000. The transaction is expected
to close on or before August 22,
2014.
The Company will retain an average 12% working
interest plus a 3% overriding royalty interest in its existing four
producing wells on the Texas Reef Properties, and an average 9%
working interest plus a 5% overriding royalty interest throughout
its remaining 3,500 undeveloped net acres.
The purchaser is an experienced, well-capitalized
private E&P operator with operations in several states in the
Southern USA (the
"Purchaser"). The Purchaser has recently drilled six
vertical wells and two horizontal wells immediately adjacent to the
Company's Texas Reef Properties (the Company and the Purchaser have
overlapping and integrated land positions). Upon closing, the
Purchaser will become the operator of the existing and future wells
throughout the Texas Reef Properties. Horizontal drilling of
several wells is planned.
"The Company will benefit from the new operator's
experience drilling and operating in the area, while participating
in the upside with its retained interests," said Michael McLellan, Chief Executive Officer.
"Also, this property divestiture will allow Gale Force to make significant debt repayments
and free up capital to make investments in other core
properties."
With the proceeds from the sale of the
properties, the Company expects to make an approximate $2.5 million reduction in its senior bank
facility, fully pay off any outstanding subordinate notes, and have
approximately $2.5 million remaining
for its capital development programs.
ABOUT GALE FORCE PETROLEUM INC. −
www.GaleForcePetroleum.com
Gale Force Petroleum is a public corporation focused on acquiring
and exploiting underdeveloped oil and gas reserves in mature
basins, bringing operational expertise and capital to lower-risk,
development-type projects. The Company currently owns producing oil
and gas properties in Texas,
Tennessee and West Virginia.
Neither the 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.