Quetzal Energy Ltd.
TSX VENTURE : QEI

Quetzal Energy Ltd.

July 23, 2009 09:38 ET

Quetzal Energy Ltd. Reports Delays in Drilling Operations at Atzam #3 Well

TORONTO, ONTARIO--(Marketwire - July 23, 2009) - Quetzal Energy Ltd. (TSX VENTURE:QEI) ("Quetzal" or the "Company") announced today that drilling progress on the Atzam #3 has been slower than expected due to lost circulation at or near the surface of the well bore, as well as mechanical issues with the drilling rig. As of the date of this release, the Company is correcting the circulation problem by skidding the rig back and adding additional concrete footings for the rig plus squeezing cement downhole to stop and or minimize mud losses while drilling. Drilling is expected to resume in five to seven days. At present the drilling program is currently running behind schedule by 18 days.

It should be noted that In 1987, Basic Resources (Bahamas Ltd) was forced to abandon the Atzam #1 well (approximately 500 meters north east of the Quetzal Energy Ltd. Atzam #3) due to similar drilling issues, causing Basic to skid their rig and drill the Atzam #1A well (currently utilized as a water disposal well for Quetzal Energy Ltd's operations).

Once drilling resumes, it is expected to take up to four days to reach the required depth needed to set intermediate casing (approximately 1100 to 1400 feet). Once intermediate casing is set in the upper section of the Coban "C" limestone, leaving the worst of the lost circulation zones up hole, the Company expects the penetration rate to increase. Projected total depth for the Atzam #3 well is approximately 4200 feet.

Quetzal will be reviewing its drilling procedures and options in anticipation of avoiding this and other drilling issues on future wells.

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 Quetzal, including, but not limited to, the ability to complete the Atzam #3 well on target and on budget ,risks and uncertainties involved in drilling operations, environmental risk, the timely cost of drilling, the impact of general economic conditions, industry conditions, dependence upon regulatory and shareholder approvals, the execution of definitive documentation and the uncertainty of obtaining additional financing. 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 THE 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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