Azabache Energy Inc.

Azabache Energy Inc.

April 26, 2011 19:31 ET

Azabache Announces Brokered Private Placement of Up to $15.0 Million and Appointment of New Director

CALGARY, ALBERTA--(Marketwire - April 26, 2011) - Azabache Energy Inc. ("Azabache" or the "Company") (TSX VENTURE:AZA) announces that it has entered into an agreement for a private placement financing (the "Offering") on a "commercially reasonable efforts" basis with a syndicate of agents co-led by Toll Cross Securities Inc., Canaccord Genuity Corp., and FirstEnergy Capital Corp. and including Fraser MacKenzie Limited (collectively, the "Agents"). The Offering will consist of up to 27,275,455 common shares ("Common Shares") in the capital of the Company for gross proceeds of approximately $15,001,500 to be issued at a price of $0.55 per Common Share. The Agents will also have the option of increasing the size of the Offering by an additional 15% (the "Over-Allotment Option").

The Company has agreed to pay the Agents a 6% cash commission upon the closing of the Offering, as well as to reimburse the Agents for their expenses.

Closing of the Offering is expected to occur on May 12, 2011, or such earlier or later date as the Agents and the Company may determine. Closing of the Offering is subject to receipt of all necessary regulatory approval. The Common Shares issued pursuant to the Offering will be subject to a hold period of four months from the closing of the Offering.

The net proceeds of the Offering (as well as any proceeds from the Over-Allotment Option, if exercised by the Agents) will be used for exploration activities in Colombia and Argentina, as well as for general working capital.

The Company is also pleased to announce that Mr. Vincent Chahley has agreed to join the board of directors of the Company. Mr. Chahley brings extensive capital markets expertise to Azabache with over 25 years Investment Banking experience in the oil and gas sector with FirstEnergy Capital Corp., Tristone Capital Inc., RBC Capital Markets and Burns Fry. Mr Chahley has also served on several boards of both public and private oil and gas companies.

For further information on Azabache please visit the Company's website at

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.

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