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DENVER, April 5, 2005 /PRNewswire-FirstCall via COMTEX/ --

Galaxy Energy Corporation (OTC Bulletin Board: GAXI) has agreed in principle to terms of a senior secured convertible note in the aggregate principal amount of $10,000,000. The agreement between Galaxy Energy and Promethean Capital Group LLC is subject to completion and execution of definitive documentation. Proceeds of the financing would be used for the development of Galaxy's existing oil and gas properties. Galaxy has filed a Form 8-K with the Securities and Exchange Commission that discloses details of the agreement.

Galaxy Energy Corporation is an oil and gas exploration and production company focusing on acquiring and developing coalbed methane properties in the Powder River Basin of Wyoming and Montana, and other projects within the Rocky Mountain area.

This press release consists of forward-looking statements regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, and actual results could differ materially from those indicated by such forward looking statements. The Company assumes no obligation to update the information contained in this press release, whether as a result of new information, future events or otherwise. Please refer to the company's filings with the United States Securities and Exchange Commission for discussions of risks and uncertainties found in Forms 10-KSB (annual report), 10-QSB (quarterly report) and other filings.

Additional information may be found at the Galaxy Energy Corporation Web site, http://www.galaxyenergy.com/, or by calling Brad Long, Investor Relations/Galaxy Energy at (800) 574-4294, Bevo Beaven or Bill Conboy at CTA Public Relations at (303) 665-4200, or Renmark Financial Communications at (514) 939-3989.

SOURCE Galaxy Energy Corporation

Brad Long, Investor Relations of Galaxy Energy Corporation, +1-360-945-0395 or +1-800-574-4294; or Bevo Beaven, Vice President, or Bill Conboy, Senior Account Executive, both of CTA Public Relations, Inc., +1-303-665-4200, for Galaxy Energy Corporation http://www.prnewswire.com
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