Quetzal Energy Ltd.

Quetzal Energy Ltd.

April 30, 2012 22:50 ET

Quetzal Energy Ltd. Announces Its Audited Results for the Year Ended December 31, 2011 and Provides Block 27 Update

CALGARY, ALBERTA--(Marketwire - April 30, 2012) - Quetzal Energy Ltd. (TSX VENTURE:QEI) announces its audited results for the year ended December 31, 2011 and provides Block 27 Update.


  • The Company completed a brokered financing pursuant to a short-form prospectus in which it issued 276,000,000 common shares at $C0.125 per share for proceeds of $31,518,644, net of related costs of $3,215,956.
  • The Company sold its interests in mineral properties located near Horden Lake in the province of Quebec, Canada through the sale of mining claims it owned directly and the sale of its 95% interest in its subsidiary, Nemiscau Mines Ltd. The aggregate selling price $C4,000,000 ($US3,859,000) was comprised of $C2,000,000 ($US1,929,800) in a cash payment, and $C2,000,000 (USD $1,929,800) as 16,666,667 common shares of the purchaser, El Condor Minerals Inc. (TSX VENTURE:LCO), valued at $C $0.12 per share. As Quetzal had written off the costs of these properties, the full value of the consideration, net of selling costs was recorded as a gain in the year.
  • The Company changed management adding Ron MacMicken as President & CEO, John Martin as Chief Financial Officer, and appointed Andrew DeFrancesco as Executive Chairman of the Board. The Company also made two key technical management additions retaining David Birnie and Stephen Balog through Alconsult International Ltd.
  • Quetzal and its partners spudded the Mani-1 exploration well on Block 27. Subsequent to year end the Company announced an oil discovery at the Mani-1 well and commenced an extended test.
  • Quetzal and its partners completed a workover on Canaguay-1 well at the Canaguaro block in October and put well back into production, averaging 900 - 1000 boe/d with 35% water cut.
  • Quetzal and its partners completed 95 square kilometer 3D seismic survey on LL21.
  • Quetzal and its partners completed a 109 square kilometer 3D seismic survey on Block 36. An application has been filed with ANH requesting an extension on Phase 1 program commitments.


Flami-1 Exploration Well

As previously announced on April 23, 2012, NCT Energy Group C.A. Colombia, as official Operator of the LLANOS 27 Block, along Quetzal and its partners, have commenced drilling the Flami #1 well on the Llanos 27 Block in the Llanos Basin of Colombia. The well is being drilled with the Saxon 132 1,500 horsepower rig and has a planned total depth of 10,000 feet and drilling is expected to take approximately 35 days from the date of spud. The well is programmed to test the hydrocarbon potential of the Mirador and Une formations with secondary targets being the Carbonera and Gacheta formations. The gross budget for drilling the well is US$10 million with a testing budget of US$4 million. The Company is paying 50% of the gross amount to earn a private participating interest of 45.275% before payout and 34.25% after payout.

Mani-1 Exploration Well

On January 16, 2012, Quetzal announced an oil discovery in the Mani-1 exploration well. On March 7, Quetzal and its partners placed the well on extended test following receipt of regulatory approvals. Since that time, management has observed that total fluid production has continued to increase and watercut has also continued to increase and now exceeds 85% of production fluids. As described in the Company's January 16 press release, there was a failure with the liner hanger during completion that caused problems with executing the cement job needed to ensure proper isolation of the Mirador formation. Two remedial cement jobs were completed at that time and it was believed that proper bonding was achieved. However, given the increase in watercut, management is now investigating whether: a) the cement job from the original completion has failed to hold properly causing water to seep from lower zones; or b) if the water is being produced from the target reservoir. Management has decided to suspend production of the well until the drilling of the Flami-1 well is completed, at which time we will review the option of carrying out another remedial cement job.


Quetzal is a junior oil and gas company with private participating interests in 4 blocks in the Llanos Basin of Colombia; the Company also has oil and gas assets in Guatemala.

Cautionary Statements

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. In particular, but without limiting the foregoing, this news release contains forward-looking information concerning the use of proceeds of the recently completed offering of units of the Corporation.

The forward-looking information is based on certain key expectations and assumptions made by Quetzal, including expectations and assumptions concerning the operational results in Colombia and Guatemala. Although Quetzal 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 Quetzal 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 Quetzal'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 Quetzal 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.


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