Galleon Energy Inc.
TSX : GO

Galleon Energy Inc.

September 16, 2011 16:35 ET

Galleon Energy Inc. Announces Closing of Private Placement and Proposed Name Change of Corporation

CALGARY, ALBERTA--(Marketwire - Sept. 16, 2011) - Galleon Energy Inc. (TSX:GO) ("Galleon" or the "Corporation") is pleased to announce the closing of the previously announced private placement of an aggregate of 2.3 million units ("Units") at $2.81per Unit. Each Unit consisted of one Class A Share for the Corporation and one share purchase warrant ("Warrant"). Each Warrant will entitle the holder to acquire one Class A Share of the Corporation at an exercise price of $3.10 for a period of three years. The Warrants are not exercisable until the 20 day volume weighted average trading price of the Class A Shares exceeds $5.00 per share.

A special meeting of shareholders has been scheduled for November 1, 2011. Shareholders will be asked to consider and, if thought appropriate, pass a special resolution to approve the change of the name of the Corporation from Galleon Energy Inc. to Guide Exploration Ltd.

Galleon has reviewed previous guidance and has updated guidance as follows: 2011 funds flow from operations of between $100 - $105 million, 2011 average daily production of between 11,500 – 12,000 BOE/d (approximately 33% oil and NGLs) and 2011 exit volumes of approximately 12,000 BOE/d. We confirm that our capital program for 2011 will be approximately $130 to $140 million excluding acquisitions and dispositions. This updated guidance is as a result of minor non-core asset sales and purchases and delays in drilling and completion operations.

Galleon has approximately 86.28 million Class A shares issued and outstanding which trade on the Toronto Stock Exchange under the symbol "GO".

ADVISORIES

Forward Looking Statements: Certain information regarding Galleon Energy Inc. in this news release including proposed name change, 2011 forecast funds flow from operations and 2011 average and exit daily production may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, wells not performing as expected, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive.

Projected levels of 2011 funds flow from operations may constitute future oriented financial information or a financial outlook under applicable securities laws. This update from previous guidance was approved by management of the Corporation as at September 15, 2011 and is being provided as a forecast of funds available to fund capital and other expenditures based on the various assumptions including 2011 hedged volumes and average 2011 commodity prices of $3.95/Mcf for natural gas and $90/Bbl CAD. Readers are cautioned that the information may not be appropriate for other purposes.

Additional information on these and other factors that could affect Galleon's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), at Galleon's website (www.galleonenergy.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Galleon does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Non-GAAP Measurements: This news release contains terms commonly used in the oil and gas industry, such as funds flow from operations. These terms are not defined by GAAP and should not be considered an alternative to, or more meaningful than, cash provided by operating activities or net earnings as determined in accordance with Canadian GAAP as an indicator of Galleon's performance. Management believes that in addition to net earnings, funds flow from operations is a useful financial measurement which assists in demonstrating the Corporation's ability to fund capital expenditures necessary for future growth or to repay debt. Galleon's determination of funds flow from operations may not be comparable to that reported by other companies. All references to funds flow from operations throughout this news release are based on cash flow from operating activities before changes in non-cash working capital and abandonment expenditures.

Contact Information

  • Galleon Energy Inc.
    William E. Andrew
    Executive Chairman
    (403) 261-6012

    Galleon Energy Inc.
    Shivon Crabtree
    VP Finance and Chief Financial Officer
    (403) 261-6012
    www.galleonenergy.com