Drako Capital Corp. Announces Conditional Acceptance of Qualifying Transaction and Filing of Filing Statement

CALGARY, ALBERTA--(Marketwire - Feb. 16, 2012) -

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Drako Capital Corp. (the "Corporation" or "Drako") (TSX VENTURE:DKC.P) is pleased to announce that the TSX Venture Exchange (the "Exchange") has conditionally accepted the previously announced proposed "Qualifying Transaction" of the Corporation within the meaning of Policy 2.4 of the Exchange, whereby pursuant to a farmout and participation agreement (the "Farmout and Participation Agreement") between Drako and Manitok Energy Inc. (the "Farmor"), Drako has agreed to participate in a three (3) well drilling program with the Farmor, as described below (the "Qualifying Transaction").

The Proposed Qualifying Transaction

Pursuant to the Farmout and Participation Agreement the Corporation will participate with the Farmor in the drilling of three (3) test wells; one (1) well in the Stolberg area of Alberta and two (2) wells in the Ricinus area of Alberta, as follows:

(a) Drako will participate as to 12% of the costs of drilling and completing, or abandoning, of a horizontal well with a surface location in legal subdivision 06-29-042-15W5M and bottomhole location in legal subdivision 01-29-042-15W5M, resulting upon earning thereunder in Drako holding an undivided 8.0% working interest in and to all petroleum and natural gas in the Cardium formation, unencumbered other than for Crown lessor royalties, in the production spacing unit for the 01-29 test well, comprising that portion of the SW1/4 and the SE1/4 of Section 29-042-15W5M;

(b) Drako will participate as to 12% of the costs of drilling and completing, or abandoning, of a test well on legal subdivision 15-34-031-08W5M, resulting upon earning thereunder in Drako holding an undivided 8.0% working interest in and to all petroleum and natural gas from the surface to the base of the Viking formation, unencumbered other than for Crown lessor royalties, in Section 34-031-08W5M; and

(c) Drako will participate as to 12% of the costs of drilling and completing, or abandoning, of a test well on legal subdivision 07-21-032-08W5M, resulting upon earning thereunder in Drako holding an undivided 8.0% working interest in and to all petroleum and natural gas from the surface to the base of the Viking formation, unencumbered other than for Crown lessor royalties, in Section 21-032-08W5M.

The estimated share of Drako's costs for the operations provided for under the Farmout and Participation Agreement are anticipated to be as follows:

Test Well		D & A Cost			Completion Cost			Total Drilling & Completion Cost
01-29 Test Well	$	450,000		$	190,000		$	640,000
15-34 Test Well	$	450,000		$	190,000		$	640,000
07-21 Test Well	$	470,000		$	100,000		$	570,000
TOTAL:	$	1,370,000		$	480,000		$	1,850,000

Notwithstanding that Robert J. Dales is a director of the Farmor and holds 1,021,513 common shares of the Farmor (approximately 1.65% of the issued and outstanding common shares of the Farmor) as well as an officer and director of Drako and holds 850,000 common shares of Drako (approximately 7.9% of the issued and outstanding common shares of Drako) the Proposed Transaction is not a Non-Arm's Length Qualifying Transaction under Exchange Policy 2.4 as Drako and the Farmor are not under common control.

The filing statement of the Corporation dated February 16, 2012 (the "Filing Statement"), which describes the proposed Qualifying Transaction including reserves estimates for the interests to be earned by Drako under the Farmout and Participation Agreement, has been filed with the Exchange and applicable securities commissions and is available under the Corporation's SEDAR profile at www.sedar.com.

Management, Directors and Insiders

Upon completion of the Qualifying Transaction, Omar L. Quiroz, a director of the Corporation, will resign from the board of directors of the Corporation (the "Board of Directors") and a corporation controlled by Mr. Quiroz will sell and transfer to a nominee of Drako (including by way of a transfer in escrow as required) 1,333,333 common shares in the capital of Drako ("Common Shares") at the cost amount thereof, being $0.05 per share. At such time, the Board of Directors propose to appoint Robin Day as a director of the Corporation. Mr. Day has over 30 years of experience in the natural resource sector. Mr. Day received a Bachelor of Science from the University of Alberta in 1976, and was active in oil field services and mineral exploration until 1983. From 1983 to 1988, Mr. Day served as founding director of public junior resource companies, Elite Resource Corp and Goldcap Minerals. From 1988 to the present, Mr. Day has been president of an active private resource company engaged in prospect generation in minerals and oil and gas, tenure acquisition and farm outs. All other current directors and officers of the Corporation shall remain in place following the completion of the Qualifying Transaction.

Private Placement

In connection with the Qualifying Transaction, the Exchange has conditionally approved the Corporation's previously announced non-brokered private placement of Common Shares to finance the drilling and related expenditures associated with the Qualifying Transaction (the "Private Placement"). The Private Placement will be for a minimum of 6,250,000 Common Shares at a price of $0.20 per share and a maximum of 8,250,000 Common Shares at a price of $0.20 per share for gross proceeds of between $1,250,000 and $1,650,000. Drako has entered into arrangements whereby a cash payment in the amount of 7% of the aggregate gross proceeds of Common Shares sold by a finder will be paid as a finders fee in connection with the Private Placement. The closing of the Private Placement is to be conditional upon and concurrent to the closing of the Qualifying Transaction.

Closing of the Qualifying Transaction

Completion of the Qualifying Transaction is subject to a number of conditions including, but not limited to, the terms and conditions of the Farmout and Participation Agreement and obtaining all required corporate, regulatory and other third party approvals.

In accordance with Exchange Policy 2.4, the Filing Statement must be filed on SEDAR at least seven business days prior to the closing of the Qualifying Transaction. Drako expects to close the Qualifying Transaction as soon as practicable thereafter. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all. Approval for the Qualifying Transaction by the Corporation's shareholders is not required under the policies of the Exchange and will not be sought.

The Common Shares are currently halted from trading and shall remain so until completion of the Qualifying Transaction, or until satisfactory documentation to allow a resumption of trading is filed with and reviewed by the Exchange.

Forward-Looking Information Cautionary Statement

Certain statements contained in this release constitute forward-looking information. These statements relate to future events or the Corporation's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Corporation's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, the Corporation's stated expectation as to the drilling and other operations contemplated under the Farmout and Participation Agreement and the anticipated costs of the three (3) well drilling program provided for thereunder are statements containing forward-looking information. Actual results and developments may differ materially from those contemplated by this forward-looking information depending on, among other things, the risks that the parties will not proceed with the Qualifying Transaction, including the Private Placement, and that the Qualifying Transaction will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities) as contemplated. The Corporation disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events, or otherwise, except as may be expressly required by applicable securities laws.

Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all and investors are cautioned that, except as disclosed in the Filing Statement prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The Exchange has in no way passed upon the merits of the Qualifying Transaction and has neither approved nor disapproved the contents of this press release.