Diaz Resources Ltd.
TSX : DZR

Diaz Resources Ltd.

April 29, 2011 14:21 ET

Diaz Announces Reduced Credit Facility

CALGARY, ALBERTA--(Marketwire - April 29, 2011) -

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

Diaz Resources Ltd. (TSX:DZR) ("Diaz" or the "Company") announced today that as a result of an annual review with its primary lender, the Company's credit facility will be reduced to $3.5 million from $6.5 million effective May 26, 2011. The reduction is primarily due to the reduced values attributed to Diaz's remaining natural gas properties, based on prevailing weak gas prices. The Company today repaid $500,000 to the lender and the remaining $2.5 million reduction is due by May 26, 2011.

Diaz has commenced discussions regarding its financial situation with its present stakeholders to develop a financing plan which will permit the Company to continue to develop its heavy oil projects in the Lloydminster area. Humboldt Capital Corporation ("Humboldt"), a principal shareholder of Diaz, has indicated a willingness to support this effort and as an initial step has advanced $1.0 million to Diaz to cover the immediate loan repayment and provide Diaz necessary working capital. The loan is a secured demand loan, subordinated only to the Bank's security position, which bears interest at 10.5% per annum.

It is contemplated, as part of the Diaz refinancing and subject to regulatory approvals, that the demand loan will be converted into a secured convertible debenture, with the conversion price established using market prevailing prices.

Robert W. Lamond, Chairman of Humboldt, commented that, "Humboldt has participated in a number of prior Diaz financings to enable Diaz to acquire and commence development of its heavy oil properties. With three of the properties currently on production, Humboldt plans to be proactive in assisting Diaz with a portion of its financing requirements."

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 Company's primary loan, a $1.0 million demand loan from Humboldt Capital Corporation, and the future conversion of the demand loan into a secured convertible debenture. 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 conversion of the demand loan into a secured convertible debenture could be delayed if Diaz is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The primary loan shortfall may not be fulfilled during the Company's discussions with its stakeholder's or perfected at all if all regulatory approvals are not obtained or some other condition to the closing is not satisfied.

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.

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