Gale Force Updates on Debt Restructuring, Refinancing

Gale Force Petroleum Inc.

Gale Force Petroleum announced a status update to shareholders regarding the progress of its debt restructuring and equity refinancing efforts.

The Corporation remains under bankruptcy protection as part of the Proposal to Creditors filed on February 4, 2009, under the Bankruptcy and Insolvency Act (Canada). Since the Proposal to Creditors was approved by the creditors and sanctioned by the Superior Court of Quebec, the Trustee is now soliciting unsecured creditors to provide their Proof of Claim until June 12, 2009, after which the unsecured creditors will be issued up to 45 million new common shares of the Corporation as a final dividend to settle their debts. Barring any unforeseen complications, this can be expected to occur prior to the end of June, 2009.

The Corporation is currently insolvent, but has sufficient resources to continue operations for a limited period of time while under the protection of the Proposal to Creditors. The Corporation is focusing its efforts on obtaining new equity financing, which is needed for working capital and to maintain the value of its assets.

Following the completion of the Proposal to Creditors, the Corporation will still hold a $2 million secured loan. This secured loan remains a major barrier for the Corporation in its efforts to obtain any new equity or other alternative financing. Therefore, the Corporation is currently negotiating with its secured lender, Primatlantis Capital L.P., to restructure the loan and convert a portion of the loan into equity, which would be subject to concurrently raising sufficient additional equity financing to provide a viable future for the Corporation.

The debt conversion and new equity financing transactions would be highly dilutive to all existing shareholders, including the new shareholders who are receiving payment in shares as part of the Proposal to Creditors. If the Corporation is able to convert part of its secured loan and obtain sufficient new equity financing, it would be expected to issue approximately 400 million new shares as part of these transactions. However, given the current financial situation of the Corporation and capital market conditions, such transactions appear to be the Corporation's sole viable alternative.

If the Corporation is unable to negotiate a conversion of its secured loan into equity and obtain new equity financing, it will not be able to continue as a going concern and will possibly be required to file for bankruptcy in the coming months. Further details will be announced in such circumstances.