CALGARY, ALBERTA--(Marketwired - Oct. 15, 2014) -

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

Azabache Energy Inc. ("Azabache" or the "Company") (TSX VENTURE:AZA) announces that it has filed its annual audited financial statements, management`s discussion and analysis and certifications of annual filings for the year ended June 30, 2014. In addition, Azabache has filed its reserves data and other oil and gas information required by National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities. Copies of the foregoing documents are available on SEDAR at www.sedar.com.

Highlights of the 2014 fiscal year included:

Operating results

During the year ended June 30, 2014 (2014 fiscal year), the Company recorded a loss of $5.7 M ($0.04 per share) compared to a loss of $8.2 M ($0.06 per share) for its 2013 fiscal year. The Company's operating expenses were 7.4% lower than the previous fiscal year. The company incurred impairment charges on the La Mona property equal to $1.3 M versus total impairment charges of $4.9 M in 2013. These lower costs were offset by a $1.6 M reduction in foreign exchange gains.

Financing

During the fiscal year ended June 30, 2014, the Company raised $3.9 M from the completion of a private placement. The total shares issued were 30.6 M common shares with a half warrant to purchase common shares at $0.18.

On May 15, 2014, the Company elected to convert a $350,000 loan into common shares at the conversion price of $0.17 per share.

Operations

In January 2014, the Company completed the fracture stimulation operation at the Cvo.x-2 well in the Convunco Norte-Sur Block in Argentina. The operation achieved its primary objective of proving that oil can be liberated from the Vaca Muerta formation. The well was on test production until March 14, 2014 and produced in excess of 250 barrels of oil.

After assessing the complete results from the fracture stimulations, the Company has requested an extended evaluation period from the Minister of Energy. The extension will be for a period of up to 5 years and is expected to be approved by the Province of Neuquen before the end of 2014.

The Company retained Gaffney Cline and Associates ("GCA") to complete an assessment of oil in place in respect of the Company's Convunco Norte-Sur and El Corte blocks in Argentina based upon the Company's findings and drilling results. The GCA report is available on the Company's web site at www.azaenergy.com

Subsequent Events

On July 25, 2014, the Company entered into a Termination and Mutual Release Agreement with Rio Bravo Commercial Enterprises Inc. ("RBE"). As part of the transaction, the Company re-acquired the 23.76% of the working interest in the Covunco Norte-Sur and El Corte joint operating agreements from RBE. The Company also entered into a Convertible Loan Agreement with RBE for the principal sum of USD 3.2 M, which has an annual interest of 6%. The conversion price will be the market price at the time of conversion.

On September 19, 2014, the Company closed a $1,000,000 convertible, unsecured interest-bearing loan with an insider of the Company. The loan will bear interest of 8% and the principal and interest may be convertible into Common Shares of the Corporation at a conversion price of $0.16 per share.

The Company has decided to focus its operations on the development of its Vaca Muerta properties and, as such, has begun a process of re-organizing its Colombian Branch the details of which are set forth in a Press Release by the Company dated September 3, 2014.

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.

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.