TORONTO, ONTARIO--(Marketwire - Feb. 15, 2012) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Quetzal Energy Ltd. ("Quetzal") (TSX VENTURE:QEI.V - News) has completed the previously announced sale to SGS Acquisition Company Ltd. ("SGS") of its wholly-owned subsidiary, Quetzal Energy Inc. ("QEG"), which held Quetzal's Guatemalan operations. Pursuant to a definitive agreement dated January 25, 2012, SGS:
-- agreed to pay Quetzal US $1.5 million (plus certain adjustments), of
which US $500,000 (plus approximately US $13,000 in adjustments) was
paid at closing with the balance of US $1 million (plus approximately US
$120,000 in adjustments) to be paid upon the occurrence of certain
performance milestones and in any event no later than 365 days after
-- will grant Quetzal a 10 per cent carried interest in the first two wells
drilled by SGS on QEG's properties (the "Properties"); and
-- granted Quetzal an option to participate on a 10 per cent pro rata basis
in all other wells drilled by SGS on the Properties.
With recent drilling success in Colombia, Quetzal has decided to focus its management time and financial resources on its four private participating interests in Colombia. Quetzal estimates that QEG has outstanding unfunded capital obligations to the Guatemala government of approximately US $25 million for drilling exploration and development wells, conducting well work-overs, and shooting 2D seismic. Although Quetzal believes the Properties represent potential exploration upside, it was determined that QEG is non-core to Quetzal given the expected cost obligations and Quetzal's focused strategy on Colombia.
About Quetzal Energy Ltd.
Quetzal is a junior oil and gas company with private participating interests in 4 blocks in the Llanos Basin of Colombia.
Caution to Readers:
Forward-looking statements in this press release can be identified by use of the words "estimates", "expects", "will" and "plans" and other similar expressions. Forward-looking statements in this press release include those relating to Quetzal's estimates of QEG's unfunded capital obligations to the Guatemala government and statements regarding the potential exploration upside attributable to the Properties, and such statements are based on certain assumptions made by Quetzal based on its experience. These assumptions, although considered reasonable at the time of preparation, may prove to be incorrect and are based on known and unknown risks including, but 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, other factors including unforeseen delays, and certain other risks detailed from time to time in Quetzal's public disclosure documents. Quetzal undertakes no duty to update any forward-looking statements to conform such statement to actual results or to changes in Quetzal's expectations except as required by applicable laws.
NEITHER THE 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.
Quetzal Energy Ltd.
Chief Executive Officer