Brownstone Ventures Inc.
TSX VENTURE : BWN

Brownstone Ventures Inc.

January 26, 2010 10:46 ET

Brownstone Welcomes New Partner in Israel

TORONTO, ONTARIO--(Marketwire - Jan. 26, 2010) - Brownstone Ventures Inc. (TSX VENTURE:BWN)("Brownstone") is pleased to announce that Adira Energy Inc. (OTCBB:ADENF)("Adira"), Brownstone's joint venture partner in offshore Israel, has announced their farmout and funding arrangement with Modiin Energy Limited Partnership and Modiin Energy General Partners (collectively, "Modiin"), aimed at facilitating for Adira their full initial funding of Adira's Gabriella offshore license, subject Brownstone's existing earn-in rights and funding obligations on the Gabriella License.

Adira has advised Brownstone that its agreement with Modiin allows Modiin to earn into 70% (of 100%) (the "Modiin Earn-In Rights") of certain rights of participation in License #378 / "Gabriella" (the "Gabriella License"). This is in addition to Brownstone Ventures Inc's right, subject to certain conditions, to earn a 15% (of 100%) participating interest in the Gabriella License. (See Press Release September 14, 2009). The Gabriella License consists of an area of approximately 390 sq km, in the Mediterranean, at a distance of approximately 10 km from the Israel coast, between the city of Netanya in the North to the City of Ashdod in the South and is located in shallow waters. The Gabriella License was granted to Adira Israel on the 15th July 2009 for an initial period of 3 years. The Gabriella License provides that Adira Israel perform a specific minimum work plan that includes, inter alia, conducting a 3D seismic survey and the drilling commencement on one well to a total depth of approximately 5000m.

General terms of Adira's agreement with Modiin include the following:

1. An agreed and approved work plan on the Gabriella License, together with a budget of US$8 million (the "Approved Work Budget") as well as an expected implementation timeline.

2. In addition to financing its part of the Approved Work Budget, Modiin will finance Adira's share of the Approved Work Budget up to US$ 1.2 million. The agreement provides that in the event that Modiin does not meet its funding commitments, as stated above, it will return the Modiin Earn-In Rights without any compensation or any other claim against Adira.

3. Modiin will pay Adira a combined royalty of 4.5% on the total wellhead revenue of the rights in oil and / or gas and / or other valuable materials produced up until such time as costs are recovered. Once costs are recovered this combined royalty will increase to 10.5%.

4. Commencing on the 1st of February 2010, and for a period of two years thereafter, Modiin will pay Adira a monthly fee in respect of advisory services provided by Adira in connection with the license and Modiin will pay Adira certain management and operator fees.

5. Adira have been granted an option to reacquire 15% of the Modiin Earn-In Rights (the "Back-In Option") back from Modiin at cost. Cost is defined as cumulative expenditure on the exploration program as at date of exercise of the Back-In Option. The Back-In Option can be exercised during the period commencing on the date hereof and ending on the date which is 6 months from the earlier to occur of a discovery (as defined in the Israel Petroleum law of 1952) or until the license period ends.

6. The parties have committed to negotiate in good faith a joint operating agreement within 60 days of signing the agreement, with Adira being designated as the Operator and being entitled to a 7.5% fee based on gross expenditures.

7. The agreement includes provisions regarding the right of refusal and tag along clauses.

8. As part of the agreement, Modiin has committed to invest a total of US$ 300,000 for the purchase by way of a private placement of 600,000 Subscription Receipts to purchase shares of Adira Energy Ltd (the "Subscription Receipts"). The Subscription Receipts will be exchanged automatically without any further consideration for 600,000 common shares in the capital of Adira ("Common Shares") on the date upon which the Common Shares will be listed for trading on a recognized stock exchange in Canada.

9. The transfer of the Modiin Earn-In Rights is subject to approval of the Petroleum Commissioner responsible for oil affairs in the Ministry of National Infrastructures in Israel.

10. The agreement is conditional upon approval by the boards of Adira and Modiin, as well as the holders of certain participation rights of Modiin to the extent required, shareholders to the extent required, as well as any other applicable regulatory approvals.

Brownstone welcomes Modiin as the new partner to the Gabriella License and looks forward to working with this reputable and stable Israeli conglomerate in developing the oil and gas industry in Israel.

About Modiin Energy

MELP is an Israeli listed limited partnership managed by MEGP which is controlled in equal shares by Tzahi Sultan and I.D.B Investments through a company called Noya Investments. Tzahi Sultan is the executive Chairman of Clal Finance Underwriting ("CFU"). CFU is the leading underwriter and investment banker in Israel with 50% of the total market. In 2009 CFU raised over 30 Billion Shekels (84bn $US).

About Tzahi Sultan

Tzahi has over 15 years experience in the field of underwriting. During his career, he's served as managing director at HSBC, was the chief executive of Gmul Sahar Underwriting, and headed the underwriting division of Poalim Capital Markets, a subsidiary of Bank Hapoalim. In the past 5 years, Tzahi serves as the CEO of Clal Finance Underwriting. Under his management, Clal has executed hundreds of issuings, public and private, including some of the high-profile IPOs and privatization processes in the Israeli market and M&A transactions. On March 2009 Tzahi had completed the acquisition of control of Clal Finance Underwriting.

About Clal Finance Underwriting

Clal Finance Underwriting Ltd., ("CFU") the investment-banking division of Clal Insurance Enterprises Holdings, is a leading player in the local financial markets. During 2007 the company managed deals in excess of 43 NIS Billion (over $13B); during 2008 it managed over NIS 12 billion (approximately $3B) in public offerings and private placements for leading players in Israel's corporate sector; and in 2009, CFU raised over NIS 30 Billion (approximately $8B) in over 75 transactions for its clients. Bloomberg and "Themarker.com" economical web site and magazine declared CFU the leading underwriting and investment banker in Israel for 2008. In 2009 Clal Finance Underwriting issued 18 public companies in the life science sector in Israel, and raised about NIS 370M. Clal finance Underwriting acted as Lead manager in 16 issued companies, in 9 of them Clal acted as sole underwriter.

About IDB

The IDB Group is Israel's largest, top-tier, leading, diversified business group with total assets of over US$ 30 billion. IDB was recently ranked by leading international institutions as the leading diversified Group in Israel. The IDB Group was acquired in 2003 by Mr. Nochi Dankner and the Manor and Livnat families. The Group has a presence of our subsidiaries in over 100 countries worldwide, and a total workforce of 40,000 employees. IDB's prudent, ongoing capital market activity is demonstrated by 25 portfolio companies, which are traded on the Tel Aviv Stock Exchange (TASE), as well as on the American and European stock exchanges (NASDAQ, NYSE, AMEX and AIM London).

About Adira Energy Ltd.

Adira Energy Ltd. explores for oil and gas in and offshore Israel. It has three petroleum exploration licenses; the Eitan, Gabriella and Yitzhak Licenses, collectively covering an aggregate total of approximately 160,500 acres. These licenses are located respectively on-shore in the Hula Valley of Northern Israel, 10 km offshore between Netanya and Ashdod and 17 km offshore between Hadera and Netanya.

About Brownstone

Brownstone Ventures Inc. is a Canadian-based, energy focused investment company with equity interests and direct interests in oil and gas exploration projects, including working interests in almost 300,000 acres in the Piceance/Uinta Basins of Colorado and Utah; 295km2 in the Assam/Arakan Basin, Northeast India; 253,000 acres in Rio Negro, Argentina; interests in several projects in Brazil; a 50% interest in approximately 160,000 hectares in the Quebec Lowlands; a 15% participating interest in two off-shore Israel oil and gas blocks; and is earning interests (14-35%) in 4 Colombian blocks in the Llanos basin. For additional information, please see Brownstone's website: www.brownstoneventures.com

Forward Looking Statements - Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Brownstone, including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with oil and gas activities, currency fluctuations, dependence upon regulatory approvals, the availability of future financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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