Galaxy to Sell its Piceance Properties for $50M

Galaxy Energy Corp. has entered into a non-binding letter of intent with Exxel Energy Corp. to purchase Galaxy's interest in its unconventional natural gas properties in the Piceance Basin of Colorado.

The agreement would provide for Exxel's wholly-owned subsidiary, Exxel Energy USA Inc., to pay $50 million to acquire Galaxy's undivided 25% working interest in the Garfield County, Colo., project known as Rifle Creek. Exxel USA owns the other 75% working interest in Rifle Creek. The project currently consists of a total of approximately 6,000 net acres, including three producing wells.

The parties have committed to negotiate the agreement over the next several weeks, and the agreement is subject to Exxel's obtaining financing, approval by Galaxy's senior lenders, and other terms and conditions.

Galaxy has obtained a preliminary agreement from certain related parties to provide bridge financing to support the company's operations during the period required to negotiate and close the agreement with Exxel.

Galaxy Energy Corp., a development-stage oil and gas exploration and production company, is focusing on acquiring and developing coalbed methane in the Powder River Basin of Wyoming and other unconventional natural gas properties in the Piceance Basin of Colorado, in addition to exploration activities in Germany and Romania. The Company conducts its exploration activities through two wholly owned subsidiaries, Dolphin Energy Corp. and Pannonian International, Ltd.

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