Azabache Energy Inc. Announces Filing of Year End Disclosure Documents

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


Azabache Energy Inc. (TSX VENTURE:AZA) ("Azabache" or the "Company") 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, 2012. 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 2012 fiscal year included:

Operating results 

During the year ended June 30, 2012 (2012 fiscal year), the Company recorded a
loss of $6,656,377 ($0.06 per share) compared to a loss of $4,335,542 ($0.06 per
share) for its 2011 fiscal year. The increase in costs in fiscal 2012 result
from increased activity levels related to the Company participating in the
drilling of 2 wells (1 before and 1 after year end) and investigating the
potential and development alternatives related to its unconventional assets and
related increased staff levels and office costs from opening an office in
Colombia and from moving and expanding the office in Argentina. The Company also
recorded an impairment provision of $570,903 against its Loma El Divisadero
property in Argentina and an increase of $526,781 in stock-based compensation
expense related to granting of stock options during the year.


Financing 

During the fiscal year ended June 30, 2012, the Company raised $3,049,000 from
the exercise of outstanding warrants.


Operations 

In May 2012, the Company drilled the CVOx-2 well in the Covunco Norte-Sur Block
in the Neuquen Province in Argentina. The well was drilled to provide
information with respect to the potential of the Vaca Muerta shale formation.
The Company is currently evaluating the results of the well.


El Corte & Covunco Norte-Sur negotiation 

The Company completed the re-distribution of its acreages in the Covunco
Norte-Sur and El Corte blocks in the Neuquen Province in Argentina. Related to
this redistribution, the Company restructured the ownership by third parties of
certain royalty interests in those blocks. The Company relinquished 234.5 km2 of
the exploration permit in Covunco Norte-Sur and 143.9 km2 in the El Corte block
in exchange for an extension of the exploratory periods plus the incorporation
in the El Corte block of an additional 188 km2.


Covunco Norte 

In January 2012, the Company repurchased the 20% interest that it had previously
farmed out in the Covunco Norte exploitation concession ("CVN") for cash
consideration (including VAT) of $2,009,000. 


In March 2012, the province of Neuquen mandated relinquishment of the Company's
interest in the CVN in Argentina. The Company has initiated legal actions and
has been negotiating a resolution that would allow the retention of the block.


Antares Farm-in

Due to delays in the operator obtaining required environmental permits, the
Company re-negotiated the farm-in agreements for the Antares Block in Colombia.
The resulting structure requires success in obtaining appropriate regulatory
approvals and results in lower costs to Azabache unless commercial discoveries
are made. 


Subsequent to the end of the 2012 fiscal year, the operator of the Antares Block
in Colombia (in which the Company has a 50% working interest) drilled the
Lemaya-1 well. The well was not successful in the target formation (Caballos)
but was cased to further study opportunities in unconventional oil (La Luna
formation).


Strategic Review 

Subsequent to year end, and in recognition of the large amount of capital that
will be required to develop the company's Vaca Muerta land holdings and the
improbability of Azabache financing these expenditures on its own, the Company
engaged Toronto-based Toll Cross Securities to provide the Company with its
views as to the strategic alternatives available to the Company. This may
involve a farm out, acquisition, sale of the company, an equity investor or some
other transaction that will advance the interest of shareholders. 


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
possible strategic alternatives. 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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Azabache Energy Inc.
Claudio Larotonda
President & CEO
[phone]
[e-mail]


Azabache Energy Inc.
Glenn Van Doorne
Chairman
403-966-8739
[e-mail]