VANCOUVER, BC, Oct. 3 /CNW Telbec/ - Exxel Energy Corp. ("Exxel")
(TSX-V Symbol: EXX) and Galaxy Energy Corporation ("Galaxy")(AMEX Symbol: GAX)
have renegotiated their prior non-binding letter of intent dated July 31, 2006
for the purchase of Galaxy's interest in its unconventional natural gas
properties in the Piceance Basin of Colorado.
Under a new non-binding letter of intent signed on September 28, 2006,
Exxel's wholly-owned subsidiary, Exxel Energy USA Inc. ("Exxel USA"), has
stated its intention to pay US $40 million, subject to certain adjustments, to
acquire Galaxy's undivided 25% working interest in the Garfield County,
Colorado, project known as Rifle Creek.
The parties have committed to negotiate a Purchase and Sale Agreement
("PSA") over the next several weeks. The PSA will be subject to Exxel raising
sufficient funds, at its sole discretion, to effect the purchase. Depending
upon the amount of financing raised by Exxel, up to 25% of such purchase price
may be payable in Exxel stock. In addition, the PSA will be subject to
approval by Galaxy's senior lenders, and other terms and conditions. Exxel USA
owns the other 75% working interest in Rifle Creek. The project consists of a
total of approximately 6,300 net acres in the prolific Piceance Basin of
Colorado.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
