Azabache Energy Inc.

Azabache Energy Inc.

May 15, 2013 12:54 ET

Azabache Announces Closing of Non-Brokered Offering and Convertible Loan

CALGARY, ALBERTA--(Marketwired - May 15, 2013) -


Azabache Energy Inc. ("Azabache" or the "Company") (TSX VENTURE:AZA) is pleased to announce that it has closed its previously announced non-brokered financing (the "Offering"). Pursuant to the Offering, Azabache sold an aggregate of 10,292,250 common shares in the capital of the Company (the "Common Shares") at a price of $0.16 per Common Share for gross proceeds of $1,646,760. The Common Shares issued pursuant to the Offering will be subject to a four month hold period expiring on September 15, 2013.

In connection with the Offering, the Company paid eligible persons finder's fees in the aggregate amount of $56,206.

The Company is also pleased to announce that it has entered into an agreement to complete a non-brokered financing of a $350,000 convertible, unsecured, interest-bearing loan (the "Debt Offering").

The Debt Offering will consist of convertible debentures in the aggregate amount of $350,000. The interest rate will be 5% per annum, calculated and payable together with the principal of the loan upon the maturity date. The term of the loan shall be one (1) year, with the Company having a right to prepayment at any time. Subject to certain conditions, the loan will be convertible into Common Shares of the Company at a conversion price of $0.17 per share.

The Debt Offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange Inc.

The Company intends to use the proceeds from the Offering and the Debt Offering to help fund the completion of fracture stimulation and work over of the Company's COVx-2 well in the Vaca Muerta formation as well as for general working capital and general corporate purposes.

This press release contains forward-looking statements. More particularly, this press release contains statements concerning the Debt Offering and the expected use of proceeds of the Offering and the Debt Offering. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Azabache. 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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