Explanatory Note: This Amendment No. 2 to Form 8-K is being filed to disclose an extension to the Purchase and Sale Agreement with Galaxy Energy Corporation. The disclosure set forth in Item 1.01 replaces the previous disclosure.

On December 29, 2006, PetroHunter Energy Corporation and its wholly owned subsidiary, PetroHunter Operating Company (jointly referred to as “PetroHunter”), entered into a Purchase and Sale Agreement (the “PSA”) with Galaxy Energy Corporation (“Galaxy”) and its wholly owned subsidiary Dolphin Energy Corporation (“Dolphin”). Pursuant to the PSA, PetroHunter agreed to purchase all Galaxy’s and Dolphin’s oil and gas interests in the Powder River Basin of Wyoming and Montana (the “Powder River Basin Assets”). A copy of the PSA is attached hereto as Exhibit 2.1 and is incorporated by reference herein.

Marc A. Bruner, who is the controlling owner of MAB Resources LLC (“MAB Resources”), which is the largest shareholder in PetroHunter, also is a 14.1% beneficial shareholder of Galaxy. Marc A. Bruner is the father of Marc E. Bruner, the President, Chief Executive Officer and director of Galaxy. Marc E. Bruner is the stepson of Carmen J. Lotito, the Chief Financial Officer and a director of PetroHunter.

The purchase price for Powder River Basin Assets is $45 million, with $20 million to be paid in cash and $25 million to be paid in PetroHunter common stock at the rate of $1.50 per share. On March 21, 2007, PetroHunter assigned to MAB Resources its right to purchase an undivided 45% interest in the Powder River Basin Assets in consideration for the agreement of MAB Resources to supply the PetroHunter common stock portion of the purchase price under the PSA.

Closing of the transaction is subject to approval by Galaxy’s secured noteholders, approval of all matters in its discretion by PetroHunter’s Board of Directors, including PetroHunter obtaining outside financing on terms acceptable to its Board of Directors, and various other terms and conditions. Originally, either party could terminate the PSA if closing had not occurred by February 28, 2007. This date was extended to March 31, 2007 under an amendment dated February 28, 2007, and later extended to April 30, 2007 under an amendment dated March 30, 2007.

As required under the PSA, PetroHunter made an initial earnest money payment of $2 million. In the event the closing does not occur for any reason other than a material breach by PetroHunter , the deposit shall convert into a promissory note (the "Note"), payable to PetroHunter , and shall be an unsecured subordinated debt of both Galaxy and Dolphin, which is payable only after repayment of Galaxy’s and Dolphin’s senior indebtedness.

PetroHunter Operating Company became the contract operator of the Powder River Basin Assets beginning January 1, 2007. At closing, the operating expenses incurred by PetroHunter Operating Company as the contract operator, will be credited toward the purchase price, or if closing does not occur, will be added to the principal amount of the Note.

As part of the March 21, 2007 agreement under which PetroHunter assigned to MAB Resources the right to acquire an undivided 45% working interest in the Powder River Basin Assets, MAB Resources has guaranteed the performance of Galaxy and Dolphin under the PSA (including but not limited to all their obligations under the Note), and has agreed to reimburse PetroHunter for certain losses and damages which might be incurred as a result of PetroHunter entering into the PSA.

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