Azabache Energy Inc.
TSX VENTURE : AZA

Azabache Energy Inc.

January 27, 2010 15:52 ET

Azabache Announces Commercialization of Covunco Block, Argentina

TORONTO, ONTARIO--(Marketwire - Jan. 27, 2010) -

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

Azabache Energy Inc. ("Azabache") (TSX VENTURE:AZA) announces that it has entered into an arrangement with Gas Meridional to purchase up to 1.8 MMcf of gas per day at $2.80 per MMBTU, pending finalization of a definitive agreement.

The Company will initially supply the gas from recently re-perforated intervals in the Tordillo Formation (1905-1930 and 1940-1952.5 m) of the OAx-2 well in the Covunco Block of the Neuquen Basin. Gas flowed at a stabilized rate of 883 Mcf and 5 bbls of condensate per day through a 5/16" choke at a wellhead pressure of 300 psi.

In addition, the Company has signed a letter of intent for a strategic alliance with GNC Galileo S.A. and Galileo Rental S.A. to install facilities for compressed natural gas transportation. GNC Galileo S.A. will provide and maintain the operation of the facilities for the transportation.

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

This press release was prepared by Azabache Energy Inc. which accepts the responsibility as to its accuracy. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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