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Msg  19 of 24  at  10/19/2011 12:53:12 PM  by

com.manager


NR - Gale Force Petroleum buys Thunder Properties

Gale Force Petroleum buys Thunder Properties

DALLAS, TX, Oct. 19, 2011, 2011 -- Gale Force Petroleum Inc. (TSXV: GFP) ("Gale Force" or the "Company") announced today that it has purchased properties in South Texas (the "Thunder Properties").

"The Thunder Properties have profitable current oil and liquids-rich gas production, very long-life reserves, and up to 7 untapped horizons," said Michael McLellan, Chairman and CEO. "This will be another accretive acquisition for Gale Force Petroleum, increasing the value of its proved reserves by at least 10 cents per share, measurably increasing the company's daily production and profits, and growing the Company's operations in Texas."

The Thunder Properties include interests in 795 acres with 4 producing wells and 1 salt water disposal well, which are currently producing, in the aggregate, approximately 32 BOE per day (25 bbls of oil and 70 mcfs per day of liquids-rich gas). There are also several potential proved undeveloped drilling locations, and 7 additional potentially productive zones on the properties. The Company estimates that there are minimum proved reserves to its interests of 55,000 barrels of oil and 200,000 mcfs of liquids-rich gas, with a present value of at least $5.1 million assuming an $85 oil price and a 10% discount rate.

The purchase price for the Thunder Properties is US$1,600,000. Upon closing of the purchase, the Company would own a 100% interest in the production from the Thunder Properties before payout of net profits of $1,663,000, after which the Company's interests reduce to a 50% working interest ownership in the properties. The Company anticipates spending $500,000 in capital development expenses on the Thunder Properties over the next 7 to 10 months, which it expects to increase total production to between 70 and 120 BOE per day, with likely production of approximately 90 BOE per day (60 bbls per day oil and 180 mcfs of liquids-rich gas).

To finance the purchase, the Company used $900,000 drawn from its $15 million credit facility with an interest rate of 5% per annum, while pledging only 50% of the property as collateral. The credit facility is now drawn to $5.1 million. The remaining $700,000 of the purchase price was financed by the Seller with a $700,000 note maturing April 22, 2012, with $50,000 per month principal payments and an interest rate of 7% per annum.

ABOUT GALE FORCE PETROLEUM INC. − www.GaleForcePetroleum.com Gale Force Petroleum is a public corporation focused on acquiring and exploiting undervalued oil and gas reserves in mature basins, bringing operational expertise and capital to lower-risk, development-type projects. The Company currently owns producing oil and gas properties in Texas, Oklahoma and Tennessee.

Forward looking statements: Statements included herein, including those that express management's expectations or estimates of our future performance, constitute "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements are based on assumptions and estimates that are subject to various risks and uncertainties, including the risks disclosed under the heading "Risks and Uncertainties" in the Company's periodic filings on SEDAR, for example, in its Management Discussion and Analysis for the year ended June 30, 2010. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statements, except as required under applicable law.

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

www.galeforcepetroleum.com


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