VANCOUVER, BC, Aug. 1 /CNW Telbec/ - Exxel Energy Corp. (TSX-V: EXX)
("Exxel") and Galaxy Energy Corporation (AMEX: GAX) ("Galaxy") have entered
into a non-binding letter of intent setting forth the terms of an agreement to
be negotiated (the "Agreement"). The Agreement would provide for Exxel's
wholly-owned subsidiary, Exxel Energy (USA) Inc. ("Exxel USA"), to pay
$50 million (US), subject to certain adjustments, to acquire all of the
undivided 25% working interest which Galaxy's wholly-owned subsidiary, Dolphin
Energy Corporation, owns in the parties' project in Garfield County, Colorado,
known as "Rifle Creek". Exxel USA owns the other 75% working interest in Rifle
Creek.
Exxel and Dolphin first acquired an interest in undeveloped leases in the
Rifle Creek project in February 2005, and have continued to acquire acreage
and interests in producing properties since that time. The project currently
consists of a total of approximately 6,000 net acres in the prolific Piceance
Basin. The parties have committed to attempt to negotiate the Agreement over
the next several weeks, which Agreement would be subject to several conditions
including Exxel obtaining financing in an amount and on terms satisfactory to
Exxel in its sole discretion, as well as obtaining various regulatory
approvals including that of the TSX Venture Exchange. There can be no
assurance that the Agreement can be successfully negotiated.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
