Galaxy Energy Signs Purchase and Sale Agreement to Sell Its Powder River Basin Oil and Gas Assets to PetroHunter Energy Corporat
04 Gennaio 2007 - 3:00PM
PR Newswire (US)
DENVER, Jan. 4 /PRNewswire-FirstCall/ -- Galaxy Energy Corporation
(AMEX:GAX) and its wholly owned subsidiary Dolphin Energy
Corporation have signed a Purchase and Sale Agreement (PSA) with
PetroHunter Energy Corporation (OTC:PHUN) (BULLETIN BOARD: PHUN) ,
a related party, under which PetroHunter agrees to purchase all of
Galaxy's and Dolphin's oil and gas interests in the Powder River
Basin of Wyoming and Montana. Under the terms of the PSA, which was
signed on December 29, 2006, PetroHunter agrees to pay a total
consideration of $45 million, subject to adjustment, to acquire all
of Galaxy/Dolphin's oil and gas interests in Sheridan, Johnson,
Converse and Campbell Counties in Wyoming, and Big Horn, Custer,
Powder River and Rosebud Counties in Montana. The agreement calls
for not less than $20 million to be paid in cash and the remainder
to be paid in PetroHunter common stock. Closing of the transaction
will be subject to PetroHunter obtaining financing on terms
acceptable to PetroHunter, approval by Galaxy's senior lenders, and
various other terms and conditions. The agreement calls for an
initial earnest money deposit to be made to Galaxy in the amount of
$2 million by January 31, 2007. In addition, effective January 1,
2007, PetroHunter became contract operator of Galaxy/Dolphin's oil
and gas interests in the Powder River Basin. On closing of the
transaction, PetroHunter will receive a credit against the purchase
price for the deposit and expenses incurred by it as contract
operator of Galaxy/Dolphin's properties. If the transaction does
not close by February 28, 2007, the total amount of the deposit and
operating expenses incurred by PetroHunter will convert to a
subordinated, unsecured promissory note. PetroHunter is a related
party because Marc A. Bruner, a 14.3% beneficial shareholder of
Galaxy, is PetroHunter's controlling shareholder. In addition, Marc
A. Bruner is the father of Marc E. Bruner, President and Chief
Executive Officer and a director of Galaxy. Either party may
terminate the agreement if the closing has not occurred by February
28, 2007. Galaxy Energy has filed a Form 8-K concerning the PSA
with the Securities and Exchange Commission. Dolphin owns an
average 86% working interest in 197 oil and gas wells in the Powder
River Basin. Twenty-two wells are currently selling gas at an
average rate of 850,000 cubic feet a day. The remaining wells are
in various stages of dewatering, shut-in waiting on pipeline, or
waiting to be completed. 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 or Warren
Laird, both of CTA Integrated Communications, +1-303-665-4200, for
Galaxy Energy Corporation; or Tina Cameron of Renmark Financial
Communications, +1-514-939-3989, for Galaxy Energy Corporation Web
site: http://www.galaxyenergy.com/
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