Diaz Resources Ltd.
TSX : DZR

Diaz Resources Ltd.

January 18, 2011 14:28 ET

Diaz Announces Intention to Amend Convertible Debentures

CALGARY, ALBERTA--(Marketwire - Jan. 18, 2011) - Diaz Resources Ltd. (TSX:DZR) ("Diaz" or the "Corporation") announces that it is seeking approval from the Toronto Stock Exchange and the holders ("Debentureholders") of its $7.085 million aggregate principal amount of 8.75% convertible unsecured subordinated debentures ("Debentures") to amend the terms of the Debentures to:

  1. increase the interest payable on the Debentures from 8.75% per annum to 10.5% per annum effective January 17, 2011;
  2. reduce the conversion price of the Debentures from $0.90 per share to $0.33333 per share, such that 3,000 common shares of the Corporation shall be issuable for each $1,000 principal amount of Debentures converted; and
  3. extend the maturity date of the Debentures from March 27, 2012 to March 27, 2014

(collectively, the "Amendments")

In accordance with the terms of the trust indenture governing the Debentures, the Amendments require the approval of Debentureholders holding not less than 66 2/3% of the aggregate principal amount of Debentures outstanding. The Corporation is seeking such approval by way of written resolution. 

Mr. Lamond, the Chairman of Diaz Resources Ltd, stated that, "the successful amendment to the debenture maturity date to March 27, 2014, will give the Company a longer period and greater flexibility in developing its portfolio of heavy oil assets. Furthermore, I am pleased that discussions with representatives of approximately two-thirds of the debenture holders have been very positive and have resulted in their intention to sign the written resolution.

Diaz now plans to focus on raising additional capital with which to proceed with an accelerated development drilling program of its Lloydminster heavy oil pool, which over the past six months has exhibited stable oil production rates (see website, www.diazresources.com). In addition, Diaz plans to drill development wells on three low risk heavy oil projects in the Lloydminster area, in the next six months."

Diaz also announces that Mr. Raj Agrawal has resigned his position as a Director of the Corporation, effective December 31, 2010, as he is retiring. Mr. Agrawal had been a director for almost ten years and the Corporation thanks him for his years of valuable service and wishes him well in the future.

Diaz is an oil and gas exploration and production company based in Calgary, Alberta. Diaz's current focus is on oil development and exploration in Alberta and Saskatchewan.

ADVISORY: This press release contains forward looking statements. More particularly, this press release contains statements concerning the anticipated Amendments to the Debentures. Although Diaz believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because Diaz 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. The Amendments could be delayed if Diaz is not able to obtain the necessary Debentureholder and stock exchange approvals on the timelines it has planned. The Amendments to the Debentures will not be made at all if these approvals are not obtained or some other condition to the making of the Amendments is not satisfied. Accordingly, there is a risk that the Amendments will not be made within the anticipated time or at all.

The forward looking statements contained in this press release are made as of the date hereof and Diaz undertakes no obligations 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 TORONTO STOCK EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TORONTO STOCK EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Diaz Resources Ltd.
    Robert W. Lamond
    Chairman
    (403) 269-9889
    (403) 269-9890 (FAX)
    or
    Diaz Resources Ltd.
    Donald K. Clark
    Chief Operating Officer
    (403) 269-9889
    (403) 269-9890 (FAX)
    info@diazresources.com
    www.diazresources.com