GALE FORCE PETROLEUM ISSUES UPDATE TO SHAREHOLDERS

Tuesday, August 25th, 2009

Montreal, August 25, 2009 – Gale Force Petroleum Inc. (TSX Venture: GFP, the “Corporation”) today released an announcement regarding the status of its restructuring and clarifying its plans for the future.



Due to a lack of resources, the Corporation has very little time to find a solution to continue as a going concern. Shareholders should be aware of the significant and imminent risk of bankruptcy.



The Corporation wants investors to be aware of the following facts:





  • The Corporation has zero remaining sources of cash resources and is insolvent. Operations have been reduced to the minimum and are being funded tentatively by deferred compensation to employees, by shareholder advances and by minimal increases in the secured loan to maintain asset value.





  • The Corporation intends to file for bankruptcy in the coming weeks or months unless it can obtain new financing or sources of cash;





  • The Corporation will not be able to obtain new debt financing because it holds a $2 million first-rank loan secured by all assets of the Corporation;





  • The Corporation will not be able to obtain new equity financing at current market prices. Regulations do not permit the Corporation to issue shares below the price at market.



“The Corporation faces numerous obstacles to remain a going concern”, said Michael McLellan, Chairman and CEO. “Amongst other operational difficulties, at current market prices for the Corporation’s shares, the Corporation will apparently be unable to obtain equity financing, which practically assures the Corporation has no chance of survival”.





Forward looking statements:


Statements included herein, including those that express management's expectations or estimates of our future performance, constitute "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements are based on assumptions and estimates that are subject to various risks and uncertainties including but not limited to the risks disclosed under the heading "Business Risks" in the Corporation's most recent Management Discussion and Analysis for the annual exercise ended June 30, 2008 available on SEDAR.



“The TSX Venture Exchange has not reviewed this release and therefore does not accept responsibility for its adequacy or accuracy.”


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