Galaxy Energy and PetroHunter Energy Corporation Extend Closing Date on Sale of Galaxy's Powder River Basin Oil and Gas Assets
June 01 2007 - 10:15AM
PR Newswire (US)
DENVER, June 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 June 30, 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 June 30, 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 June 30, 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 about 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. CONTACT: Brad Long / Investor Relations Bevo
Beaven, Sr. Vice President/GM Galaxy Energy Warren Laird, Vice
President (360) 332-9821 CTA Integrated Communications (800)
574-4294 (303) 665-4200 DATASOURCE: Galaxy Energy Corporation
CONTACT: Brad Long, Investor Relations of Galaxy Energy,
+1-360-332-9821, 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.ctapr.com/
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