Azabache Energy Inc.
TSX VENTURE : AZA

Azabache Energy Inc.

December 29, 2014 12:07 ET

Azabache Announces the Signing of the Decrees for Continued Access to the Third Exploratory Period in El Corte Block and the Categorization of Covunco Norte-Sur Block as an Area Under Evaluation

CALGARY, ALBERTA--(Marketwired - Dec. 29, 2014) -

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) has concluded an agreement with the Province of Neuquén to extend each of its petroleum and natural gas leases for the Company's Vaca Muerta properties. On December 19, 2014 the Governor of Neuquén signed Executive Order No. 2987/14 and No. 2988/14 pursuant to which a third exploratory period of the El Corte Block and the categorization of the Covunco Norte-Sur block as an "area under evaluation" was approved in accordance with the following terms:

El Corte Block:

  • Term of the Third Exploratory Period: from May 12, 2014 to May 11, of the 2016;
  • A 50 % relinquishment of the area, leaving a remaining total surface of 170 sq-km divided in two blocks (Block I 91-sq-km, Block II 79-sq-km);
  • Annual Lease fee of AR$43,757.28.

Covunco Norte-Sur Block:

  • Term of the Evaluation Period: a five-year period, effective from April 22, 2014, and expiring on April 21, 2019;
  • Investment requirements are divided into three 3 Sub-Periods as follows:
    • (i) The first sub-period of thirty-six (36) months, from April 22, 2014, which comprises: a) the drilling of two vertical wells targeting the Vaca Muerta formation, although one of them shall also be aimed to evaluate the Tordillo formation, b) a 180 sq-km 3D seismic program, c) two unconventional fractures, and d) one hundred and twenty (120) Working Units (equivalent to US$ 600,000) intended for corporate social responsibility and further requirements of the Applicable Authority;
    • (ii) The second sub-period of twelve (12) months, which includes the drilling and completion of three (3) wells; and
    • (iii) The final third sub-period of twelve (12) months, which entails the drilling and completion of six (6) wells.

Claudio Larotonda, CEO of the Company commented as follows:

"The Company has been seeking the El Corte block's and Covunco Norte-Sur blocks's extension approval for several months. The final award obtained through Executive Order No. 2987/14 and No. 2988/14 represents an important achievement for the future of the Company. We look forward to working with the governments of Argentina, partners and industry alliances with the aim of progressing unconventional exploration and evaluation phases of our assets."

This press release contains forward-looking statements. More particularly, this press release contains statements concerning the terms of the access to the third exploratory period of the El Corte Block and the categorization of the Covunco Norte-Sur block as an "area under evaluation". The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Azabache and its expected operations. 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 receive necessary regulatory approvals, the failure to complete the call option transaction in a timely manner or at all, 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.

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.

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.

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