“This is a tremendous opportunity with excellent financial terms for Gale Force to participate in one of the most successful plays in North American oil and gas in recent times”, said Michael McLellan, Chairman and CEO.  “The liquids-rich natural gas gives the property very favourable economics at current oil and gas prices”.

The Marcellus Properties consist of approximately 10,000 acres, operated by a multi-billion dollar public oil and gas company with favourable service contracts.  The properties are in the “wet gas” window of the Marcellus shale gas field, with prolific natural gas liquids and condensate in addition to abundant natural gas.  To date over 15 wells have been wells have been drilled on the Marcellus Properties and between 50 and 100 additional new wells are expected to be drilled and completed on similar spacing to the existing 15 wells within the next 3 years.

Of the wells already drilled on the Marcellus Properties several have been completed, flow-testing at rates ranging from 3 to 5 million cubic feet (MMcf) of gas per day.  The wells also had an initial condensate production rate ranging from 70 barrels to in excess of 95 barrels per each MMcf of gas produced, and initial natural gas liquids (NGL) volumes from the wet gas stream estimated to be over 35 barrels per MMcf of gas produced, which should significantly enhance the economics of the field.

The Company has purchased working interests (WIs) in various existing wells and the rights to participate in any of the up to 100 additional wells expected to be drilled on the Marcellus Properties.  As per the terms of the investment, the Company will earn payout of its initial investment plus an internal rate of return (IRR) of 35%, prior to its WIs being reduced by approximately 40%.  Following this initial purchase, the Company owns WIs including a 1.275% WI in numerous existing drilled but not completed wells, a 0.255% WI in several existing drilled and completed wells, and the Company has the rights to participate in the drilling of up to 100 wells throughout the acreage for a minimum of 1.125% WI in each well until it earns payout plus an IRR of 25%, after which its interests in each well decreases by 50%.

The initial investment made by the Company for the interests in the existing wells on the Marcellus Properties will be approximately US$1,500,000 for its share of drilling, completions and tie-in costs over the next 3 months. Additionally, the Company has the option to fund its share of any new wells drilled over the next 2 to 3 years on the property, expected to require between $2.5 million and $10 million, depending on the drilling programs determined by the operator of the project.  A finder’s fee of US$90,000 is payable to IROMAD, a specialized oil and gas consultancy, for its role in sourcing and performing due diligence on the acquisition.

To finance the purchase of the Marcellus Properties the Company borrowed CA$500,000 (the “Short-term Loan”) from Palos Merchant Bank L.P. and will conclude a CA$500,000 equity private placement (the “Private Placement”) with a strategic US oil and gas investor, Young Capital Partners, for a total CA$1,000,000 in new capital raised.

“Even though Gale Force is generating significant cash from operations and has approximately $600,000 currently available on its line of credit, these small financings not only provide liquidity to close the Marcellus Properties…”, said Mr. McLellan, “These financings also assure that the Company continues the development of its existing properties, where it is expected that daily production will grow to between 350 and 400 BOE per day by June, 2012, not including the new production from this acquisition”.

The $500,000 Short-term Loan from Palos Merchant Bank L.P. shall earn interest of 1.25% per month and has a term of between 2 and 6 months.  The Short-term Loan is secured by a first-rank security interest on the 50% of the Company’s Thunder Property and the Company’s interests in the Marcellus Properties.

The $500,000 Private Placement with Young Capital Partners (see below for a description of Young Capital Partners) is in exchange of 2,500,000 units (the “Units”).  Each Unit shall be issued at a price of $0.20 per Unit, and will be comprised of one common share Company and one warrant with a term of 2 years with an exercise price of $0.20. The common shares and warrants are subject to resale restrictions that will expire on April 2, 2012.

The Company also signed a shares-for-debt agreement to settle fees owing to IROMAD to settle accrued consulting fees of $15,000, through the issuance of 75,000 Units. These shares and warrants shall be issued today, along with 585,000 shares and 500,000 warrants issued under previously signed shares-for debt agreements, as previously announced on January 10, 2012.

The issuance of the common shares and the warrants are subject to TSX Venture Exchange approval.

For more information, please contact: Michael McLellan, CFA, Chairman & CEO, +1.514.221.2030

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.

ABOUT YOUNG CAPITALPARTNERS, LP – www.YoungCM.com
Young Capital Partners, LP is a limited partnership advised by Young Capital Management, LLC, a Registered Investment Advisor with the state of California that is based in Los Angeles. Joshua Young is the managing member of Young Capital Partners. He was previously an analyst at Karlin Asset Management, a multi-billion dollar single family office based in Los Angeles. He was recently featured in Oil & Gas Investor Magazine and in The Energy Report.

ABOUT PALOS MERCHANT BANK L.P. – www.PalosManagement.com/Palos-Merchant-Bank.php
Palos Merchant Bank L.P. (“Palos”) engages in merchant banking activities and provides a variety of corporate finance services including: capital-raising, credit syndication, buyout financing, advice on mergers and acquisitions, restructuring and due diligence.  There are two major differences between Palos and traditional investment banks: (1) Palos invests its own own money alongside other investors, typically as the lead investor, and (2) Palos does not engage in underwriting.  Palos Merchant Bank also becomes involved in the governance of the companies in which it invests, usually by taking an active role at the Board of Directors level. The managers of the Palos have extensive experience in corporate finance, private equity, venture capital and seed financing.

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.”

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“The Company has made steady gains in its daily production and cash-flow generation”, said Michael McLellan, Chairman and CEO.  “We intend to build on this success and continue the rapid growth of operations”.

The Company has also signed shares-for-services agreements to settle a total of $124,000 owing to Ruben Alba and Daniel Smith, P.E., for technical oil and gas services rendered during 2011.   Mr. Alba will be issued 80,000 common shares of the Company at a price of 21.4 cents per share, to settle amounts owing of $17,000, and Mr. Smith will be issued 500,000 common shares at a price of 21.25 cents per share, plus 500,000 warrants with an exercise price of 33 cents and a term of 24 months, to settle amounts owing of $107,000.

“It is encouraging that some of the Company’s technical personnel have elected to take payment in equity”, said Mr. McLellan. “We are grateful for their services rendered and the results they have helped us achieve”.

The common shares and warrants are subject to a 4-month hold period, and the issuance is subject to TSX Venture Exchange approval.

For more information, please contact: Michael McLellan, CFA, Chairman & CEO, +1.514.221.2030

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.

Cautionary statement concerning use of BOEs:
Please note that the Company has used the term “BOE” herein, which may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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.”

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“With GFP now trading on the OTC market’s prestigious OTCQX Internal tier, GFP has opened the door to many more potential investors in the United States,” said Michael McLellan, Chairman and CEO. “The OTCQX provides the highest level of transparency and visibility possible for efficient trading of for US investors in the OTC marketplace.”

Berns & Berns, LLP will serve as the Company’s Principal American Liaison on the OTCQX, responsible for providing guidance on OTCQX requirements.

For more information, please contact: Michael McLellan, CFA, Chairman & CEO, +1.514.221.2030

ABOUT GALE FORCE PETROLEUM INC. ? www.GaleForcePetroleum.com
Gale Force Petroleum acquires and exploits undervalued and underdeveloped 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.

ABOUT OTC MARKETS GROUP INC. – www.OTCMarkets.com
OTC Markets Group Inc. (OTCQX: OTCM) operates the world’s largest electronic marketplace for broker-dealers to trade unlisted stocks.  Our OTC Link™ platform supports an open network of competing broker-dealers that provide investors with the best prices in over 10,000 OTC securities.  We categorize the wide spectrum of OTC-traded companies into three tiers – OTCQX (the intelligent marketplace), OTCQB® (the venture marketplace), and OTC Pink™ (the open marketplace) – so investors can identify the level and quality of information companies provide.  To learn more about how OTC Markets Group makes the unlisted markets more transparent, informed, and efficient, visit www.otcmarkets.com.

“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.”

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“Gale Force has now reported strong early financial results from [its] new business plan, for the year ended June 30, 2011. Some of the highlights include:

-Revenues increased by 842% year-over-year to $2.2 million;
- Cash generated from operations was $684,732 and net profits were $486,794 during the year;
- Proved Reserves nearly doubled to 1.2 million bbls of oil and 1.5 million Mcfs of natural gas, with a PV10 value of $44.5 million (i.e. the NPV of future net revenues using a discount rate of 10%);
- Gale Force exited the year with $2.53 million cash on hand, plus availability under its line of  redit to fuel additional growth.”

To read the full comments, please click here: 2011.11.04_Palos Weekly Commentary

“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 $1,600,000, 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 8 to 12 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.

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 line of credit 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.

For more information, please contact: Michael McLellan, CFA, Chairman & CEO, +1.514.221.2030

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.”

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