Estrella Completes the Acquisition of Zigma Petroleum Services

BUENOS AIRES, ARGENTINA--(Marketwire - Feb. 23, 2012) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

Estrella International Energy Services Ltd. (the "Company" or "Estrella") (TSX VENTURE:EEN), is pleased to announce that further to its press release of September 6, 2011, all closing conditions have been satisfied in connection with the acquisition of a 100% interest in Zigma Colombia Petroleum Services S.A. ("Zigma"). Estrella also announces that it has elected not to close on the acquisition of the remaining 51% of Petroland S.A.S. ("Petroland") at this time.

Estrella initially acquired 49% of the issued and outstanding shares of Zigma and Petroland on March 14, 2011. Concurrently with these acquisitions, Estrella also acquired an option to purchase the remaining 51% of the shares of each company. The terms of the options were amended by the parties on September 6, 2011.

On February 23, 2012, Estrella completed the acquisition of the remaining 51% interest in Zigma, and now holds 100% of the issued and outstanding shares of Zigma. The purchase price was satisfied by Estrella as follows:

• payment of US$500,000 in cash;
  
  
• the assignment of US$2,450,000 in net receivables of Zigma to the sellers; and
  
  
• the assumption of approximately US$4 million in debt.
  
  

Estrella has also reserved up to 3,125,000 common shares and up to 750,000 Class B Preference Shares for issuance to the sellers. These shares are being reserved by Estrella as security for outstanding contingencies of Zigma. The exact number of shares to be issued to the sellers has not yet been determined.

The common shares will have a deemed issue deemed issue price of US$0.48, and the Class B Preference Shares will have a deemed issue price of US$1.00. Holders of the Class B Preference Shares will be entitled to a 6% cumulative dividend, if and when declared by the board, payable semi annually. Estrella may, at its sole option, elect to convert the preference shares into common shares, in the event that the 20 consecutive trading day closing price of the common shares of Estrella, is greater than or equal to US$1.00. The conversion rate shall be 1 common share of the Company for each preference share. The preference shares will be automatically convertible into common shares on the fifth anniversary of the date of issuance.

On February 17, 2012, Estrella notified the sellers of the remaining 51% of the shares of Petroland, that it was not going to proceed with the closing of the transaction as originally contemplated, at this time. Estrella elected not to proceed due to the inability of the sellers to satisfy certain key conditions precedent to closing.

Estrella continues to hold 49% of the shares of Petroland, and remains its single largest shareholder. Estrella remains in discussions with the other shareholders of Petroland with respect to the future direction of Petroland.

Warren Levy, Chairman & CEO of Estrella commented: "We are pleased to have closed on the acquisition of 100% of Zigma. We have also completed planned upgrades to the key drilling rigs which were formerly owned by Zigma. While we are disappointed at the inability of the sellers of Petroland to comply with certain key conditions precedent, we felt it was important to move forward, and give a very clear indication to the market in Colombia that Estrella as a standalone company will offer our high standard of service and commitment to the market. We continue to be in discussions with the owners of Petroland to determine the best course of action to continue with respect to our 49% ownership in Petroland SAS."

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects" and similar expressions. Forward-looking statements in this press release include, but are not limited to, statements with respect to the future business plans and services.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Estrella. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and Estrella does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.