Veraz Petroleum Announces Details of Proposed Distribution of Shares of Petrominerales Ltd.

CALGARY, ALBERTA--(Marketwire - July 23, 2012) - Veraz Petroleum Ltd. ("Veraz") (TSX VENTURE:VRZ) announces that in connection with its previously announced sale of its wholly-owned subsidiary, Veraz Petroleum Peru S.A.C., to Petrominerales Ltd. ("Petrominerales") in consideration for US$5,000,000 of Petrominerales common shares ("Petrominerales Shares") pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement"), Veraz's board of directors has determined to distribute to shareholders of record of Veraz as at the effective time of the Arrangement by way of a reduction of Veraz's stated capital, approximately US$3,000,000 (or 60%) of the Petrominerales Shares received. Veraz intends to sell the remaining Petrominerales Shares received when it considers it appropriate to do so and use the proceeds therefrom to pay its transaction costs and other liabilities, to fund its continuing obligations as a public company, and to fund the pursuit of new business opportunities.

Completion of the Arrangement remains conditional upon the approval of at least two-thirds of the votes cast by Veraz shareholders at the annual general and special meeting (the "Meeting") of shareholders scheduled to be held on July 24, 2012, the receipt of a final order from the Court of Queen's Bench of Alberta, and the satisfaction of other customary conditions and approvals. Assuming Veraz shareholders approve the Arrangement at the Meeting and the other conditions to the Arrangement are satisfied, it is anticipated that the Arrangement will be completed on July 24, 2012. Final details regarding the proposed distribution will be disclosed by way of press release following the closing of the Arrangement.

About Veraz Petroleum Ltd.

Veraz is a junior South American focused oil and gas exploration company based in Calgary, Alberta.

Forward-Looking Statements

Certain information provided in this press release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "plan" and similar expressions are intended to identify such forward-looking statements. This press release contains forward-looking statements pertaining to, without limitation, the value of Petrominerales Shares Veraz expects to distribute pursuant to the Arrangement, the anticipated closing date of the Arrangement, Veraz's intention to sell the Petrominerales shares that are not distributed to shareholders and the intended use of the net proceeds of such sale. We have made various assumptions relating to the forward-looking statements contained herein, including in respect of our ability to obtain all requisite approvals and otherwise satisfy the conditions precedent to closing the Arrangement. Although we believe that the expectations reflected in these forward-looking statements, and the assumptions on which they are made, are reasonable, undue reliance should not be placed on them as we can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions and are based on various assumptions, by their very nature they involve inherent risks and uncertainties that contribute to the possibility that the forward-looking statements may not be accurate, which may cause our actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things: failure to obtain requisite shareholder, court, third party and regulatory consents and approvals required to complete the Arrangement and otherwise satisfy all of the conditions precedent to closing the Arrangement; failure to close the Arrangement on the terms described herein or at all; failure to distribute the value of Petrominerales Shares to Veraz shareholders indicated herein; and the other factors described in our public filings available at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking statements contained in this press release are made as of the date hereof and we undertake no obligation to publicly update 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. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.