Vanoil Energy Ltd.

Vanoil Energy Ltd.

June 18, 2012 09:00 ET

Vanoil Announces Strategic Partnership and $20M Non-Brokered Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 18, 2012) - Vanoil Energy Ltd. (TSX VENTURE:VEL) ("Vanoil" or the "Company") is pleased to announce the formation of a strategic partnership with Global Mining Management Corporation ("GMM"), a private Vancouver-based company that provides management services for Ivanhoe Capital Corporation, Ivanhoe Energy Inc. and Rowena Energy Inc., among others. This strategic partnership is designed to strengthen the Company's ability to raise funds and provides the Company with an experienced oil and gas team who have participated in the growth, financing and development of global natural resources companies worldwide.

As part of this strategic partnership, the Company is pleased to announce the appointments of the following individuals to senior management roles:

Jonathan Dubois-Phillips (Executive Vice President - Finance) Jonathan is a former investment banker with Lehman Brothers and Nomura (Hong Kong) and is currently Managing Director - Finance with Ivanhoe Capital Corporation. While at Lehman, Jonathan was a founding shareholder of PanAsian Petroleum, an Asian-based junior oil exploration company that was sold to Ivanhoe Energy in 2009. Jonathan has a Bachelor of Commerce from the University of British Columbia and a MBA from INSEAD.

Tosan Omatsola (Vice President - Exploration) Tosan is an exploration and development Geoscientist with over 15 years' experience in the oil and gas industry. He has a broad and extensive international technical background from his experiences with British Petroleum - BP and Texaco, and through his roles as Executive Vice President, Energy Ventures for Ivanhoe Capital Corporation and as a co-founder of Rowena Energy Inc. Tosan holds a bachelor's degree from the Colorado School of Mines in Geological Engineering with a specialty in minerals and petroleum exploration and a master's degree from the University of Oklahoma in Petroleum Geology. He is the author of numerous papers on petroleum reservoir quality in offshore environments.

Matthew Hornor (Executive Vice President - International Legal & Business Affairs) Matthew is a U.S.-trained and licensed attorney and is a Managing Director of Ivanhoe Capital Corporation and GMM. Matthew also holds senior management positions with several Ivanhoe Capital affiliated companies, and has extensive experience with natural resource projects in Africa. Matthew was formerly a Senior Associate with the international law firm, Paul, Hastings, Janofsky & Walker, LLP in Tokyo, Japan. Matthew is a graduate of the University of Southern California (B.A., East Asian Languages and Culture (Japanese), minor in Economics) and the University of Virginia School of Law (JD). Matthew received two Japanese Ministry of Education (Mombusho) fellowships and completed graduate and post-graduate work at Tohoku University in Sendai and at Tokyo University in Law and Economics.

Anthony Abbenante (Vice President - Corporate Development) Tony is a U.S.-trained and licensed attorney and is a Vice President in GMM, with a primary focus on international legal and business affairs and corporate development activities. Tony also holds management positions in other Ivanhoe Capital Corporation affiliated companies. Tony formerly worked as a corporate transactional lawyer in the Washington, D.C. and New York offices of two international law firms. Before joining a law firm, Tony worked as a business strategy consultant in New York. Tony received his undergraduate degree in Foreign Affairs from the University of Virginia in Charlottesville, Virginia, and his law degree from the American University Washington College of Law in Washington, D.C.

Mr. James Passin, President and CEO of Vanoil, stated, "We at Vanoil are delighted to form this strategic partnership with the experienced team at GMM, and we welcome the contributions incoming management will make to the Company's future success. Together we intend to move Vanoil forward and create a significant oil company primarily focused on the African Continent."

The Company is also pleased to announce a non-brokered private placement (the "NB Offering") of up to 33.333 million units (the "NB Units") of the Company at a price of $0.60 per NB Unit for aggregate gross proceeds of up to $20.0 million. Each NB Unit will comprise one common share of the Company (a "Share") and one whole non-transferable share purchase warrant (a "Warrant"). Each Warrant will entitle the holder to purchase one Share at a price of $1.00 for a period of 24 months following closing. The Warrant will be subject to accelerated expiry if, at any time after the date that is four months and one day of the closing, the Company's Shares trade on the TSX Venture Exchange (the "Exchange") at a price of $1.50 or more for the preceding 20 consecutive trading days.

Completion of the NB Offering and the payment of any finder's fees remain subject to the receipt of all necessary regulatory approvals, including the approval of the Exchange. In addition, the securities issued pursuant to the NB Offering will be subject to a four month hold period from the date they are issued.

The first tranche of the NB Offering is expected to close by the end of June 2012.

The proceeds of the NB Offering will be used for the continued exploration and development of the Company's Kenyan oil and gas properties, completion of a Production Sharing Agreement with the Republic of Rwanda and for general working capital purposes.

The Company has granted an aggregate of 1.7 million options exercisable at $0.80 until June 15, 2022 to certain senior officers of the Company, subject to Exchange approval.

About Vanoil Energy Ltd.

Based in Vancouver, Canada, Vanoil is an Africa focused oil and gas company with a comprehensive portfolio of oil and gas assets in Kenya and Rwanda. In Kenya, Blocks 3A and 3B were acquired in October 2007 and a Production Sharing Contract has been signed with the Government of the Republic of Kenya. These Blocks cover 24,912 square kilometers and are part of the under-explored Cretaceous Central African Rift Basin System. Vanoil's 1,631 square kilometers exclusive oil and gas license in the East Kivu Graben in Rwanda is at the southern extension of the Albertine Graben where Heritage and Tullow Oil made their historic discovery in neighboring Uganda.

About Global Mining Management Corporation

Global Mining Management Corporation is a private, Vancouver-based company that provides management and administration services to companies worldwide, including Ivanhoe Capital Corporation, Ivanhoe Energy Inc. and Rowena Energy Inc., among others.

On behalf of the Board of VANOIL ENERGY LTD.

James Passin, President and CEO

Disclaimer for Forward Looking Information

This news release includes forward looking statements that are subject to assumptions, risks and uncertainties. Statements in this news release which are not purely historical are forward looking statements, including without limitation any statements concerning the Company's intentions, plans, estimates, beliefs or expectations regarding the future. Although the Company believes that any such intentions, plans, estimates, beliefs and expectations in this news release are reasonable, there can be no assurance that any such intentions, plans, beliefs and expectations will prove to be accurate.

The Company cautions readers that all forward looking statements, including without limitation those relating to the Company's future operations and business prospects, are based on assumptions none of which can be assured, and are subject to certain risks and uncertainties that could cause actual events or results to differ materially from those indicated in the forward looking statements. Readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance on forward looking statements.

Any forward looking statements are made as of the date of this news release, and the Company assumes no obligation to update the forward looking statements, or to update the reasons why actual events or results could or do differ from those projected in the forward looking statements. The Company assumes no obligations to update any forward looking statements, whether as a result of new information, future events or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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