Quetzal Energy Ltd.

Quetzal Energy Ltd.

January 10, 2011 14:42 ET

Quetzal Energy Provides Operational Update for Colombia and Guatemala

CALGARY, ALBERTA--(Marketwire - Jan. 10, 2011) - Quetzal Energy Ltd. (TSX VENTURE:QEI) ("Quetzal" or the "Company") is pleased to provide the following update on operations in Colombia and Guatemala:

Block 36, Llanos (Colombia) – Quetzal commenced the acquisition of a 110 square kilometer 3D seismic survey, on January 8 2011, over a structure previously defined by 2D seismic on Block 36 in Colombia. The survey is expected to be completed in April. Quetzal has a 20% paying interest in Block 36, which is operated by Montecz S.A.

Canaguaro Block, Llanos (Colombia) – An Electrical Submersible Pump ("ESP") has been installed in the Canaguay #1 well. During a short period mechanical operation test of the ESP, the well produced oil at rates in excess of 3,900 bopd. The long term production test of the Mirador is expected to be in February after necessary surface equipment is installed and required approvals are received. Quetzal has a 25% working interest in the Canaguaro Block and is acting as operator of the well.

Block 21, Llano (Colombia) - Quetzal is preparing to conduct a 94 square kilometer 3D seismic survey on Block 21 in Colombia, with field work expected to begin in February. Quetzal is acting as operator and has a 50% paying interest in Block 21.

Block 27, Llanos – Quetzal and its partners have completed the 220 square kilometer 3D seismic survey on Block 27 in the Llanos Basin. Quetzal has a 50% paying interest before payout, and a 34.25% working interest after payout. An image from the survey, along with an updated corporate presentation, can be found at Quetzal's website, www.quetzalenergy.com.

Block 6-93 (Guatemala) - Quetzal is preparing to perforate and test a total of 58 feet in the Las Casas 3X well in the Guatemala 6-93 block. In 2007 a lower interval was tested at a rate of 150 bopd of 40 degree API oil and approximately 100 barrels of water per day. If the new perforated interval encounters oil at economic rates, both intervals are expected to be put on production. Testing operations are expected begin in approximately one week and take approximately one month to complete. Quetzal has a 100% working interest in the Block 6-93 and is the official operator of the block.

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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