Azabache Energy Inc.
TSX VENTURE : AZA

Azabache Energy Inc.

January 20, 2011 14:10 ET

Azabache Announces Closing of Private Placement

CALGARY, ALBERTA--(Marketwire - Jan. 20, 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 closed its previously announced brokered private placement (the "Offering"). Azabache has sold 19,642,856 units of the Company ("Units") at a price of $0.28 per Unit for gross proceeds of $5,499,999.68. Each Unit consists of one common share of the Company ("Common Share") and one-half of one common share purchase warrant ("Warrant"), with each whole Warrant entitling the holder to acquire one Common Share at a price of $0.40 per share for 24 months from the closing date of issuance of the Offering (the "Closing Date"). All securities issued pursuant to the Offering will be subject to a four month hold period expiring on May 21, 2010.

Toll Cross Securities Inc. (the "Agent") acted as agent of the Company pursuant to the Offering. The Agent was paid a cash commission equal to 6% of the gross proceeds and was granted broker options ("Broker Options") to purchase 1,071,429 Units, with each Broker Option entitling the holder to acquire one Unit of the Company at a price of $0.28 per Unit for a period of 24 months from the Closing Date.

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

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

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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