Brownstone Ventures Inc.

Brownstone Ventures Inc.

October 06, 2010 08:00 ET

Brownstone Provides Colombia and General Update: Completion and Testing of Canaguay-1, Colombia, Begins

TORONTO, ONTARIO--(Marketwire - Oct. 6, 2010) - Brownstone Ventures Inc. (TSX VENTURE:BWN) ("Brownstone") is pleased to provide the following update:

Colombia – Canaguaro Block, Llanos Basin

Brownstone has been advised by the operator of the Canaguay-1 well on the Canaguaro Block in the Llanos Basin of Colombia, Quetzal Energy Ltd. (TSX VENTURE:QEI) ("Quetzal"), that the Saxon #132 rig has been erected on the Canaguay-1 well and is expected to begin completion and testing operations shortly. Drilling operations commenced on June 3, 2010 and the well was successfully drilled to a final total depth of 15,850 feet on August 4, 2010. Well logs indicate in excess of 100 feet of potential net oil pay in several oil zones including the Mirador, Barco, Gacheta and Une – with the Mirador zone containing the majority of the indicated oil pay. Completion and testing operations will begin with the Une / Lower Sandstone and testing of all potential zones is expected to take approximately 4 to 6 weeks. Brownstone has a 25% working interest in the Canaguaro Block.

Colombia – Block 27, Llanos Basin

Brownstone has also been advised by the operator, Quetzal, that the processing of 220 square kilometers of 3-D seismic data on Block LLA-27 in the Llanos Basin of Colombia has been completed. It is expected that the interpretation and mapping of the LLA-27 3-D seismic will be completed in the fourth quarter of 2010. Brownstone has a 50% paying interest before payout, a 45.5% revenue interest before payout, and a 35% working interest after payout.

Term Loan

Brownstone also announces that it has entered into a non-binding agreement with 2256629 Ontario Ltd., a private company, to provide Brownstone with a proposed $3,000,000 in financing in the form of a secured loan. The loan would be for a one-year term (subject to prepayment), bear interest at a rate of 12% p.a. and be secured by a charge over the company's personal property. As consideration for the loan, the company would also pay to the lender a cash bonus equal to 10% of the principal amount of the loan and a facility fee equal to 1% of the principal amount of the loan.

Closing of the transaction is subject to the satisfaction of certain conditions, including the execution of a definitive loan agreement and ancillary documents. Proceeds from the loan would be used for working capital purposes.

About Brownstone

Brownstone Ventures Inc. is a Canadian-based, energy focused investment company with equity interests and direct interests in oil and gas exploration projects, including working interests in almost 300,000 acres in the Piceance/Uinta Basins of Colorado and Utah; 253,000 acres in Rio Negro, Argentina; interests in several projects in Brazil; a 50% interest in approximately 300,000 hectares in the Quėbec Lowlands; a 15% participating interest in several off-shore Israel oil and gas blocks; and is earning interests (14-35%) in 4 Colombian blocks in the Llanos basin. For additional information, please see Brownstone's website:

This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws (together, "forward-looking information"). The use of any of the words "expect", "anticipate", "continue", "estimate", "believe", "plans", "intends", "confident", "may", "objective", "ongoing", "will", "should", "project", "should" and similar expressions are intended to identify forward-looking information.

The forward-looking information is based on certain key expectations and assumptions made by Brownstone, including expectations and assumptions concerning the operational results in Colombia. Although Brownstone believes that the expectations and assumptions on which the forward-looking information are based are reasonable, undue reliance should not be placed on the forward-looking information because Brownstone can give no assurance that they will prove to be correct.

Since forward-looking information addresses future events and conditions, by its very nature it involves 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 inherent risks involved in the exploration and development of oil and gas properties, the uncertainties involved in interpreting drilling results and other geological data, uncertainties relating to fluctuating oil and gas prices, the possibility of cost overruns or unanticipated costs and expenses and other factors including unforeseen delays. Anticipated exploration and development plans relating to Brownstone's properties are subject to change.

The foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking information contained in this press release is made as of the date hereof and Brownstone 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 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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