DALLAS, Aug. 18, 2014 /CNW/ - Gale Force Petroleum Inc. (TSXV: GFP) (OTCQX: GFPMF) ("Gale Force" or the "Company") today announced that it has entered into an agreement to sell its 50% working interest in the Thunder Properties in South Texas, to the other owner of the properties (the "Buyer"), for $550,000 cash and the restructuring of debts owed to Gale Force by Buyer.
Recently, the Company also announced its intention to sell a majority stake in its Texas Reef properties, which was announced on July 8, 2014. Both the Texas Reef Properties sale and Thunder Properties sale are now scheduled to close on or about August 27, 2014.
"By selling the Thunder Properties and Texas Reef Properties, the Company will pay down debt and free up additional capital, with which it can make investments in its core properties," said Michael McLellan, Chief Executive Officer. "Also, with a stronger balance sheet and cash available, the Company will be a more attractive counterpart for a strategic transaction."
The Company will retain a 3.5% overriding royalty interest in the Thunder Properties, which may also be purchased by the Buyer for $75,000 on or before March 1, 2015, subject to the Buyer also fully reimbursing the amounts owing to Gale Force under the secured Note Receivable (described below).
According to the terms of the agreement, the Company will also agree to a reduced amount of $500,000 owing to it under the Note Receivable that is secured by the Thunder Properties. The Note Receivable will have an interest rate of 12% per annum and a maturity date of March 21, 2016.
The Company also announced that it will issue common shares of the Company to settle amounts owing in finder's fees, director fees and consulting fees totaling $105,184, subject to TSX Venture Exchange approval. In the aggregate, 1,964,083 common shares of the Company will be issued. Pursuant to the agreements with each recipient, the issuance price per share varied between $0.0505 and $0.0736 per share, which is the 20-day volume-weighted average price or higher.
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.