Gale Force Petroleum on track to triple production year over year, signs agreements to buy Texas Reef Properties and Great Gulfcan assets

Tuesday, Feb 14, 2012

DALLAS, TX, Feb. 13, 2012 /CNW Telbec/ - Gale Force Petroleum Inc. (TSXV: GFP) (OTCQX: GFPMF) ("Gale Force" or the "Company") announced today that it has entered into agreements to purchase oil and gas properties and assets in East Texas (the "Texas Reef Properties") on or before March 23, 2012.  Gale Force also announced today that it has signed a memorandum of understanding (the "MOU") to acquire certain assets from privately held Great GulfCan Energy Inc. "GGC"), including approximately $3.2 million cash, an option on a Texas oil and gas lease and other rights (the "GGC Assets").

"The Texas Reef Properties will add to the Company's growing inventory of development prospects, providing a clear pathway for continued growth in production and cash generation", said Michael McLellan, Chairman and CEO. "We believe that the Texas Reef Properties will help increase total oil and gas production by September, 2012 to over 600 BOE per day net to the Company"

The Company existed 2011 producing 275 BOE per day, is currently producing 300 BOE per day (90% oil) and should it achieve production of 600 BOE per day in September, 2012, it will have more than tripled production since September, 2011. The Company expects further increases before year-end 2012, and all increases in production would be largely from increases in production of light crude oil and liquids-rich natural gas.

The Texas Reef Properties

The Texas Reef Properties consist of 7,500 gross acres/2,400 net acres under lease in East Texas, with three wells currently producing 35 barrels of light crude oil and 200 MCFs of high-BTU gas per day.  The Texas Reef Properties have complex geology with proved reserves from multiple zones, and numerous potential proved undeveloped locations for low-risk development drilling.  The agreements entered into by the Company give it the rights to purchase approximately 75% working interests in each the three existing wells on the properties and an 80% working interest in the remainder of the acreage.

The purchase price for the Texas Reef Properties is US$4.25 million, comprised of US$3.5 million cash and CA$750,000 in units of the Company (the "Units"), payable to several arms-length sellers.  Each Unit issued shall be comprised of one common share with an issuance price of 25 cents and one warrant with an exercise price of 28 cents and an expiry 2 years from closing, exercisable on the condition that the common shares issued by such exercise, in conjunction with any common shares owned by the holder, not result in the holder owning greater than 9.99% of the common shares of the Corporation issued and outstanding.  The common shares and warrants shall be subject to resale restrictions that expire four months plus one day following their issuance.   To
hold the property until March 23, 2012, the Company has paid a US$150,000 non-refundable deposit, which will count towards the cash component of the purchase price.  There are no finder's fee payable in conjunction with the transaction.

To finance the purchase of the Texas Reef Properties, the Company intends to primarily use funds drawn from its $15 million bank facility, which bears interest of 5%.

The purchase of the Texas Reef Properties is subject to due diligence and financing, and the acquisition and securities issuances are subject to the approval of the TSX Venture Exchange.

SOURCE GALE FORCE PETROLEUM INC.

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