Galaxy Energy Noteholders Consent to Proposed Sale of Powder River Basin Assets, an Early Maturity of Their Notes and Agree to W
30 Novembre 2006 - 5:08PM
PR Newswire (US)
Galaxy to Retire All of Its Outstanding Senior and Subordinated
Convertible Debt Upon Close of Powder River Basin Asset Sale
DENVER, Nov. 30 /PRNewswire-FirstCall/ -- Galaxy Energy Corporation
(AMEX:GAX) announced that it has entered into a Waiver and
Amendment Agreement with the holders of the senior secured
convertible notes issued by Galaxy on August 19, 2004 (the "2004
Notes") and holders of senior secured convertible notes issued by
Galaxy on May 31, 2005 (the "2005 Notes"). Galaxy has obtained the
required consent of the holders of the 2004 Notes and 2005 Notes to
the proposed sale of Galaxy's Powder River Basin assets to
PetroHunter Energy Corporation, a related party. As a condition to
the noteholders' consent, the sale of the Powder River Basin assets
must be completed by February 28, 2007. In addition, Galaxy must be
in compliance with the Waiver and Amendment Agreement and all of
its obligations under the various agreements with the noteholders.
In return, Galaxy will deliver to the noteholders one million
PetroHunter shares it will receive as part of the Powder River
Basin assets sale, and ten million shares of Galaxy common stock
upon the exercise by the noteholders of all of their outstanding
warrants for Galaxy common stock. In addition, Galaxy will retire
all of its outstanding senior and subordinated convertible debt
using the consideration it receives in the Powder River Basin sale.
If the sale of the Powder River Basin assets is not consummated by
December 31, 2006 and Galaxy still wishes to maintain the
noteholders' consent, Galaxy will issue one million shares of its
common stock to the holders and an additional one million shares if
the sale is not consummated by January 31, 2007. Galaxy has agreed
to register these shares pursuant to the terms of a Registration
Rights Agreement. Primarily as a result of Galaxy fulfilling its
contractual obligations as operator of its Piceance Basin project,
its accounts payable had exceeded the permitted $2,500,000 ceiling
set forth in the 2004 Notes and 2005 Notes, thereby resulting in a
Triggering Event. The holders agreed to waive the Triggering Event
in consideration for an amendment to the 2004 Notes and 2005 Notes
that reset the principal amounts of the Notes to 125% of the
amounts outstanding as of October 31, 2006. Galaxy and the holders
also agreed to waive any future Triggering Event that might result
from Galaxy's accounts payable exceeding $2,500,000 so long as the
accounts payable does not exceed $5,000,000. Galaxy has filed an
8-K with the SEC regarding this agreement, which will be available
at http://www.sec.gov/. About Galaxy Energy Galaxy Energy
Corporation, a development stage oil and gas exploration and
production company, is focusing on acquiring and developing coalbed
methane in the Powder River Basin of Wyoming and other
unconventional natural gas properties in the Piceance Basin of
Colorado, in addition to exploration activities in Germany and
Romania. The Company conducts its exploration activities through
two wholly owned subsidiaries, Dolphin Energy Corporation and
Pannonian International, Ltd. Forward Looking Statement This press
release consists of forward looking statements regarding the
intent, belief or current expectations of the Company and its
management. Prospective investors are cautioned that any such
forward looking statements are not guarantees of future performance
and involve a number of risks and uncertainties, and actual results
could differ materially from those indicated by such forward
looking statements. The Company assumes no obligation to update the
information contained in this press release, whether as a result of
new information, future events or otherwise. Please refer to the
Company's filings with the United States Securities and Exchange
Commission for discussions of risks and uncertainties found in
Forms 10-K (annual report), 10-Q (quarterly report) and other
filings. Additional information may be found at the Galaxy Energy
Corporation Web site, http://www.galaxyenergy.com/ or by calling
Brad Long, Investor Relations/Galaxy Energy at (800) 574-4294, Bevo
Beaven or Warren Laird of CTA Integrated Communications at (303)
665-4200, or Tina Cameron, Renmark Financial Communications at
(514) 939-3989. CONTACT: Brad Long / Investor Relations Bevo
Beaven, Sr. Vice President / GM Galaxy Energy Warren Laird, Senior
Account Executive (360) 945-0395 CTA Integrated Communications
(800) 574-4294 (303) 665-4200 DATASOURCE: Galaxy Energy Corporation
CONTACT: Investor Relations, Brad Long of Galaxy Energy,
+1-360-945-0395, or +1-800-574-4294; or Bevo Beaven, Sr. Vice
President / GM, or Warren Laird, Senior Account Executive, both of
CTA Integrated Communications, +1-303-665-4200, for Galaxy Energy
Corporation Web site: http://www.galaxyenergy.com/
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