Galaxy Energy and PetroHunter Energy Corporation Extend Closing Date on Sale of Galaxy's Powder River Basin Oil and Gas Assets
May 01 2007 - 9:00AM
PR Newswire (US)
DENVER, May 1 /PRNewswire-FirstCall/ -- Galaxy Energy Corporation
(AMEX:GAX) and its wholly owned subsidiary, Dolphin Energy
Corporation, have agreed to an amendment to the Purchase and Sale
Agreement (PSA) with PetroHunter Energy Corporation. The amendment
extends the closing date to on or before May 31, 2007, in
connection with PetroHunter's efforts to obtain financing. Marc A.
Bruner, a 14.1% beneficial shareholder of Galaxy, is the 75% owner
of MAB Resources LLC (MAB Resources) which is PetroHunter's largest
shareholder. In addition, Marc A. Bruner is the father of Marc E.
Bruner, Galaxy's President and Chief Executive Officer and a
director. Under the terms of the PSA, which was originally signed
on December 29, 2006, PetroHunter agreed to pay a total
consideration of $45 million to acquire all of Galaxy/Dolphin's oil
and gas working interests in Sheridan, Johnson, Converse and
Campbell Counties in Wyoming, and Big Horn, Custer, Powder River
and Rosebud Counties in Montana. The PSA calls for $20 million to
be paid in cash and the remainder to be paid in PetroHunter common
stock. On March 21, 2007, in consideration of the agreement of MAB
Resources to acquire an undivided working interest in the
properties by assuming the obligation under the PSA to pay
Galaxy/Dolphin the PetroHunter common stock, PetroHunter assigned
to MAB Resources its right to purchase an undivided 45% interest in
all of the oil and gas assets being sold by Galaxy. Closing of the
transaction will be subject to PetroHunter obtaining financing on
terms acceptable to PetroHunter and approval of the PSA by Galaxy's
senior lenders. As required under the PSA, PetroHunter made an
initial earnest money deposit to Galaxy in the amount of $2
million. 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 May 31, 2007, the total amount
of the deposit and operating expenses incurred by PetroHunter will
convert to a subordinated, unsecured promissory note. Either party
may terminate the agreement if the closing has not occurred by May
31, 2007. Galaxy has filed a Form 8-K concerning the amendment to
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 600,000 cubic feet per 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, focuses its operations in the Powder River
Basin of Wyoming and the Piceance Basin of Colorado, in addition to
exploration activities in Germany and Romania. Galaxy 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 Galaxy 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. Galaxy 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 Galaxy'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.
DATASOURCE: Galaxy Energy Corporation CONTACT: Brad Long, Investor
Relations of Galaxy Energy, +1-360-332-9821, or +1-800-574-4294; or
Bevo Beaven, Sr. Vice President/GM, or Warren Laird, Vice
President, both of CTA Integrated Communications, +1-303-665-4200,
for Galaxy Energy Corporation Web site:
http://www.galaxyenergy.com/
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