Vanoil Energy Ltd.

Vanoil Energy Ltd.

October 07, 2011 11:43 ET

Vanoil Closes First Tranche of Private Placement for $2,270,000

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 7, 2011) - Vanoil Energy ("Vanoil") (TSX VENTURE:VEL) is pleased to announce that it has closed the first tranche of its non-brokered private placement announced on September 14, 2011, for gross proceeds of $2,270,000. The first tranche consisted of 4,540,000 units at a price of $0.50 per Unit. Each Unit is comprised of one common share and one-half of a non-transferable warrant, a whole warrant entitling the holder thereof to purchase an additional common share of Vanoil at a price of $0.75 until 4:00pm on October 6, 2013. The warrant will be subject to accelerated expiry if at any time after the date that is four months and one day after the closing, the Issuer's common shares trade on the Exchange at a price of $1.00 or more for the preceding 20 consecutive trading days.

The securities issued pursuant to the first tranche will be subject to a four month hold period expiring February 7, 2012. The Company paid $350.00 in finder's fees on the first tranche, and may pay finder's fees on further tranches subject to Exchange approval. The closing of further tranches and the payment of further finder's fees remain subject to final acceptance by the Exchange.

The proceeds from the first tranche will be used to continue the development of its projects in Kenya and Rwanda and for general working capital.

About Vanoil Energy

Based in Vancouver, Canada, Vanoil Energy Ltd. is an internationally diversified Oil and Gas company that has a comprehensive portfolio of oil and gas assets in the African countries of Kenya and Rwanda, and in the Province of Alberta, Canada. In Kenya, Blocks 3A and 3B were acquired in October 2007 through the signing of a Production Sharing Contract with the Government of the Republic of Kenya. Blocks 3A and 3B, which cover 24,912 square kilometres, are part of the vastly under-explored Cretaceous Central African Rift Basin System, an area that may possibly hold the next major sub-Saharan discovery. Vanoil's 1,631 square kilometres of oil and gas exclusive licence 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 neighbouring Uganda.

On Behalf of the Board of VANOIL ENERGY LTD.

Dal Brynelsen, President and CEO

Disclaimer for Forward-Looking Information

Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results and are believed to be reasonable based on information currently available to the Company.

Forward-looking statements and information are based on assumptions that financing and personnel will be available when required and on reasonable terms, and all necessary regulatory approvals and shareholder approval will be obtained, none of which are assured and are subject to a number of other risks and uncertainties.

There can be no assurance that forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking information.

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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