Azabache Energy Inc. Announces Filing of First Quarter Results for the Period Ended September 30, 2014

CALGARY, Nov. 25, 2014 - Azabache Energy Inc. (TSX VENTURE:AZA) ("Azabache" or the "Company") today announces its operating and financial results for the three months ended September 30, 2014. Copies of the Company's unaudited condensed interim consolidated financial statements and related Management's Discussion and Analysis ("MD&A") are being filed with Canadian securities regulatory authorities and will be made available under the Company's profile at www.sedar.com and on the Company's website at www.azaenergy.com.

Highlights of the 3-month period ended September 30, 2014 included:


Operating results

During the quarter ended September 30, 2014, the Company recorded a loss of $1,565,314 ($0.01 per share) compared to a loss of $791,627 ($0.01 per share) for the same period in the prior year. The main reason for the increased loss was exchange gains recorded in the quarter ended September 30, 2013 related to significant cash transfers to Argentina.

None of the properties in which the Company holds an interest recorded production income as of September 30, 2014.


Financing

Loan Agreement with Rio Bravo Commercial Enterprises Inc. (July 25, 2014)

The Company entered into a Termination and Mutual Release Agreement ("Termination Agreement" with Rio Bravo Commercial Enterprises Inc. ("RBE"). Under the agreement, the Company retains its 90% interest in the Covunco and El Corte blocks as RBE relinquished its working interest of 23.76%. On the same day, RBE entered into a Loan Agreement with the Company, agreeing to loan USD 3.2 M at a rate of 6% for one year. The Company may convert the principal plus interest into Common Shares of the Company at any time after April 21, 2015. (See Note 6 - Interim Financial Statements).

As a result of the termination of RBEs working interest, the USD 2.1 M, which had been received in FY 2014, were re-classified to Exploration and Evaluation assets.


Convertible Loan Agreement (September 19, 2016)

The Company closed a non-brokered financing (the "Debt Offering") of a $1,000,000 convertible, unsecured interest-bearing loan (the " Convertible Loan") with an insider of the Company. The Convertible Loan will bear interest at a rate of 8% per annum. The term of the loan shall be for one (1) year. The Convertible Loan may be convertible into Common Shares of the Company at a conversion price of $0.16 per share.


Operations

Gaffney Cline & Associates Independent Report (September 30, 2014)

The Company announced that Gaffney Cline & Associates had completed their independent assessment of "Oil in Place for Designated Section of Covunco Norte-Sur and El Corte Blocks - Vaca Muerta Formation". The full report is available on the Company's website at www.azaenergy.com. Based on this report, the Company is reviewing its development plan for the Covunco-El Corte blocks. This plan will, in turn, permit the Company to further define its financial requirements


Strategic direction

The Company has reached an agreement with the Government of Neuquen and its partner, GyP, on the future development requirements for both the Covunco and El Corte blocks. The Company has agreed that over the next 3 years, they will complete 76,000 acres of 3D seismic, fracture stimulate two existing wells and drill and fracture stimulate 3 new vertical wells. The cost of this program has been estimated at approximately $60 M.

At a recent meeting with the Minister of Energy for the Province of Neuquen, the Company was informed that they would receive official government decrees extending the leases for Covunco and El Corte before the end of the year.

Operations in Colombia have been delayed by environmental issues. With respect to the Antares Block, given the inability to proceed with further work, the Company, along with property's operator and the ANH are evaluating ways of terminating the Antares E&P Contract.

The Company has received the necessary government approvals to proceed with the drilling of a first well on the La Mona block. However, the Company has a time restriction due to water shortages and can only commence drilling operations in the spring of 2015.

Despite the successful completion of the private placement and the completion of the Loan Agreement with RBE, the call option granted on the La Mona property in Colombia and the issuance of a $1 million convertible loan, the Company recognizes the large amount of capital that will be required to develop its Vaca Muerta land holdings and the low probability of financing these expenditures on its own. The Company continues to evaluate the best ways to finance the development of its assets. The various alternatives may involve a farm out, a strategic investor or some other transaction that will advance the interest of shareholders. The Company is currently evaluating the use of financial advisors to assist them in meeting its financing objectives.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.


This press release contains forward-looking statements concerning the Company's operations. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Azabache. Although Azabache believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Azabache can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. The forward-looking statements contained in this document are made as of the date hereof and Azabache 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.

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.

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.


CONTACT INFORMATION

Azabache Energy Inc.
Claudio Larotonda, President & Chief Executive Officer
+54 11 4893 4004
clarotonda@azaenergy.com

Marc Bouchard, Chief Financial Officer
647-409-4088
mbouchard@azaenergy.com