Azabache Energy Inc.
TSX VENTURE : AZA

Azabache Energy Inc.

January 06, 2011 18:09 ET

Azabache Announces Brokered Private Placement of Up to $5.5 Million

CALGARY, ALBERTA--(Marketwire - Jan. 6, 2011) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Azabache Energy Inc. ("Azabache" or the "Company") (TSX VENTURE:AZA) announces that it has entered into an engagement letter with Toll Cross Securities Inc. (the "Agent") with respect to a best efforts brokered private placement (the "Offering"). The Offering will consist of up to a maximum of $5,500,000 of units ("Units") to be issued at a price of $0.28 per Unit, each Unit consisting of one common share of the Company ("Common Share") and one-half of one share purchase warrant ("Warrant"). Each whole Warrant shall entitle the holder to acquire one Common Share at a price of $0.40 per share for a period of 24 months from the date of issuance.

The Company has agreed to pay the Agent a 6% cash commission and to issue such number of broker options as is equal to 6% of the number of Units sold under the Offering (the "Broker Options"), to a maximum of 1,071,429 Broker Options. Each Broker Option will entitle the holder to acquire one Unit at a price equal to the issue price of the Offering for a period of 24 months from the closing of the Offering.

Closing of the Offering is expected to occur on January 31, 2011, or such earlier or later date as the Agent and the Company may determine. Closing of the Offering is subject to receipt of all necessary regulatory approval.

The net proceeds of the Offering will be used for exploration activities, as well as for general working capital.

For further information on Azabache please visit the Company's website at www.azaenergy.com.

This press release contains forward-looking statements. More particularly, this press release contains statements concerning the anticipated timing for the closing of the Offering. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Azabache, including with respect to the anticipated timing for closing the Offering. Although Azabache believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Azabache can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations. The forward-looking statements contained in this document are made as of the date hereof and Azabache undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

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.

Contact Information