Gale Force Petroleum has closed the purchase of the "Gulftex Property," previously announced by the Corporation on June 2, 2010, and was referred to as the "Wood County Property."
The Gulftex Property consists of mainly 100% working interests in Wood County adjacent to the Corporation's existing properties in the area. The property includes 8 wells, of which 4 are on production currently producing approximately 15 barrels of oil per day. The effective date of the purchase of the property is May 1, 2010, and the price paid for the property is US$190,000 plus the assumption of any abandonment retirement obligations associated with the property, estimated to have a net present value of US$88,083 assuming annual cost inflation of 3% and using a discount rate of 10% per annum to discount back to present value.
In a report entitled "Evaluation of Reserves Attributable to Gale Force Petroleum In Gulftex Field, Wood County, Texas, prepared as at May 1, 2010, the reserves of the Gulftex Property were estimated by an independent qualified reserves evaluator, Waterson Calhoun, P.Eng., of Crest Engineering Services, using a 10% discount rate, to have proved reserves of 19,820 net barrels of oil with a net present value of US$180,000, possible reserves of 45,160 net barrels of oil with a net present value of US$707,000 for total reserves of 64,990 barrels of oil with a net present value of US$888,000. The Corporation also believes there may be additional, unevaluated reserves on some of the leases.
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