Montana Exploration Corp. (TSXV:MTZ) made a draft non-binding expression of interest to acquire Gale Force Petroleum Inc. (TSXV:GFP) on January 26, 2015. Montana Exploration Corp. (TSXV:MTZ) agreed to acquire Gale Force Petroleum Inc. (TSXV:GFP) for CAD 5.6 million on June 24, 2015. Montana Exploration (MTZ) will issue 0.465 common shares for each Gale Force Petroleum (GFP) common stock, 0.555 common shares for each Gale Force Petroleum preferred share and Montana Exploration options for Gale Force Petroleum options on equal terms. Montana and Gale Force are entitled to receive a termination fee of CAD 0.5 million in case of termination.

Upon closing, approximately CAD 0.36 million of Gale Force's short-term debts (including directors' fees, trade accounts payable and severance pay) shall be paid by the issuance of MTZ common shares. If the requisite GFP preferred shareholder approval is not obtained, the GFP preferred shares will be excluded from the arrangement and will remain outstanding following completion of the arrangement, and the holders of GFP preferred shares will ultimately receive MTZ common shares upon conversion of their GFP preferred shares.

MTZ will continue to be led by its existing management team of Charles Selby as Executive Chairman and Chief Executive Officer, Don Foulkes as President, and Don Jackson as Executive Vice President and Chief Operating Officer. The current Chief Executive Officer of Gale Force, Michael McLellan, will work on a consulting basis for MTZ (and will act as the interim Chief Financial Officer of MTZ). At the Montana Exploration shareholder meeting the shareholders of Montana Exploration will be asked to elect the Board of Directors of Montana Exploration for the ensuing year, which will include Charles Selby, Don Foulkes, James Collins, Julian McIntyre, and Michael Hibberd, along with Allan Bezanson as the board nominee of Gale Force. The directors, officers and controlling shareholders of Montana Exploration, representing in aggregate approximately 70% of the issued and outstanding Montana Exploration common stock has agreed to vote their Montana Exploration shares in favor of the transaction.

The transaction is subject to Montana Exploration entering into lock-up agreements with Montana Exploration shareholders to convert debt of approximately CAD 8.9 million into Montana Exploration common stock on closing of the transaction, court approvals, applicable regulatory and TSXV approvals, the approval of the holders of at least 66 2/3% of the Gale Force common shares and option holders and approval of Montana Exploration stockholders. The transaction is also subject to resignation of Gale Directors, dissenters rights limited to 10%, listing of shares to be issued in the deal and execution of employment and consulting agreements. The Board of Directors of Gale Force and Montana Exploration have unanimously approved the transaction and recommends securityholders vote in favor of the transaction. The respective shareholder meetings of Gale Force and Montana Exploration shall take place in August, 2015 and transaction is also expected to close in August, 2015. As of July 31, 2015, Court of Justice has approved the transaction. The special meeting of securityholders of Gale Force is scheduled to be held on September 8, 2015 for their approval. As of September 8, 2015, Gale Force Petroleum shareholders approved the deal.

Francis Roche of Roche Securities Ltd. acted as financial advisor and Howard Levine of Blake, Cassels & Graydon LLP acted as legal advisor to Gale Force Petroleum Inc. Brad Markel of Bennett Jones LLP acted as legal advisor for Montana. Computershare Trust Company of Canada acted as registrar to Gale Force. McDermott Will & Emery LLP and Berns & Berns acted as legal advisors to Gale Force.

Montana Exploration Corp. (TSXV:MTZ) completed the acquisition of Gale Force Petroleum Inc. (TSXV:GFP) on September 18, 2015.