DALLAS, July 3, 2013 /CNW/ - Gale Force Petroleum Inc. (TSXV: GFP) (OTCQX: GFPMF) (the "Company" or "Gale Force") acknowledges receipt of a request from Iroquois Capital Opportunity Fund LP ("Iroquois") and certain other shareholders for a meeting of the shareholders of Gale Force to be called in order to reconstitute the Board of Directors of Gale Force, as previously publicly announced by Iroquois.
Gale Force will be creating a special committee of independent directors to study such request and to consider an appropriate response thereto, which response shall be provided by Gale Force in due course.
In the interim, the Company wishes to respond to certain allegations put forward by Iroquois.
As can be seen in the following chart, Gale Force's stock has outperformed the market and its peer group since the dissident shareholder Iroquois made its initial investment in May, 2011. The period showing the largest decline in the price of the Company's shares coincides with what the Company believes to be Iroquois' selling off of a significant portion of its position. Recently, the share price and daily trading volumes for the Company's shares have improved significantly, responding favourably to the announcement by the Company of its plans for a strategic transaction.
Recent Stock Options Issuance
The recent issuance of stock options to management and employees of the Company was approved by the Board of Directors based on a recommendation by a Committee of independent directors of the Company formed to address the issue, and was the result of a process of evaluating and deliberating on comprehensive management compensation that was initiated over one year prior to the issuance of the aforementioned stock options. The Committee was guided by an independent analysis of compensation revealing that the management of Gale Force are significantly underpaid when compared with their peers, and this despite the Company's superior fundamental performance (management of Gale Force receives lower cash salaries than peers, receives no benefits, and until the options issuance received significantly less equity-based compensation). Notwithstanding the correspondence received from Iroquois, it was the conclusion of the Board of Directors that the Company should act in the normal course of business and treat its employees in good faith, and it therefore decided that the stock option issuance was appropriate and would ensure the proper alignment of management's and shareholders' interests as the Company seeks a strategic alternative.
Strategic Alternative Review
Gale Force owns an attractive portfolio of cash flow positive oil & gas assets with significant upside potential that are not being properly valued by the public markets.
Management of the Company remains of the belief that a merger or sale of Gale Force is the best means by which to maximize shareholder value and is continuing with its efforts to seek a strategic transaction in a serious and methodical manner.
The proposal being put forth by Iroquois is, in management's view, much less compelling. It is nothing more than an attempt by Iroquois to gain control of Gale Force without paying a control premium to shareholders. Iroquois' proposal serves only to cause Gale Force to incur significant additional costs and delays as a result of the distraction.
About Gale Force Petroleum Inc. − www.GaleForcePetroleum.com
Gale Force Petroleum is a public corporation focused on acquiring and exploiting underdeveloped oil and gas reserves in mature basins, bringing operational expertise and capital to lower-risk, development-type projects. The Company currently owns producing oil and gas properties in Texas, Tennessee and West Virginia.
Cautionary Statement Regarding Forward-Looking Statements:
Certain statements in this press release contain forward-looking statements. All forward-looking statements are based on the Company's current expectations, estimates, projections, beliefs and assumptions based on information available at the time the statement was made and in light of the Company's experience and its perception of historical trends. Some of the forward-looking statements may be identified by words like "expected", "subject to", "will be" and similar expressions. In addition, all other statements that address expectations or projections about the future, including statements about potential future transactions, are forward-looking statements. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, some that are similar to other oil and gas companies and some that are unique to the Company, and the other risks described in the Company's continuous disclosure filings with securities regulators available under the Company's profile at www.sedar.com. The Company's actual results may differ materially from those expressed or implied by the Company's forward-looking statements and you are cautioned not to place undue reliance on them. The Company does not assume any obligation to update any forward-looking statements contained in this press release, except as required by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE GALE FORCE PETROLEUM INC.
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