Azabache Energy Inc. Announces Participation Agreement for Vaca Muerta Assets and Non-Brokered Private Placement

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 entered into a Participation Agreement (the "PA") with RIO BRAVO
COMMERCIAL ENTERPRISES INC. ("RBE"), a private Panama corporation which,
together with its affiliates, owns and operates oil and gas interests in
Colombia, in respect of the Company's Vaca Muerta project in order to provide
funding for the Company's planned fracture stimulations of the Cvo.x-2 well
which has a budget of US$4,850,000. Pursuant to the PA, RBE will pay
US$5,000,000 in exchange for earning a 23.76% working interest (directly or
indirectly) in the Covunco Norte-Sur and the El Corte joint operating agreements
and contracts in the Province of Neuquen (the "Contracts"). Other terms of the
PA include:




1.  The transfer of the above working interest remains subject to the
    approval of the Province of Neuquen. 
2.  RBE shall be entitled to nominate an individual for election to the
    Company's Board of Directors at the annual general meeting ("AGM") of
    the shareholders of the Company following the next AGM scheduled for
    January 2014. 
3.  The Parties will enter into industry standard joint operating and other
    similar agreements to provide for the joint operation the Contracts and
    future cost sharing. 
4.  The US$5,000,000 is due in 3 tranches as follows: US$500,000 upon
    Closing, US$2,500,000 on February 20, 2014 and US$2,000,000 on March 20,
    2014. 
5.  Between August 1, 2014 and August 1, 2015, RBE and the Company (at the
    election of RBE) may enter into to good faith negotiations to create a
    liquidity event by (i) locating a suitable counterparty to purchase the
    Company and/or RBE's working interests in the above Contracts, (ii)
    locating a suitable counterparty to farm-in on the Contracts so as to
    fund development of the Vaca Muerta, or (iii) allowing for the Company
    to purchase back the above working interest from RBE for consideration
    based in part on the market capitalization of the Company at the time.
    The consideration for the buyback would be cash or, at the Company's
    election, shares in the Company. Any such buyback would be subject to
    required governmental, corporate and or regulatory approval at that
    time. 
6.  A condition precedent (for the benefit of Company) that the Company
    completes a private placement for aggregate gross proceeds of between
    US$3,500,000 and US$4,000,000 on or before December 20, 2013.



Non-Brokered Private Placement

Azabache also announces that it intends to proceed with a non-brokered private
placement (the "Private Placement") of up to 30,769,231 units of the Company
("Units") at a price of $0.13 per Unit for anticipated gross proceeds of between
$3,500,000 and $4,000,000. Each Unit shall be comprised of one common share in
the capital of the Company (a "Common Share") and one-half share purchase
warrant of the Company (each whole, a "Warrant"). Each Warrant shall entitle the
holder to purchase one Common Share at a price of $0.18 per share for a period
of 24 months from the closing of the Private Placement. 


Closing of the Private Placement is expected to occur on or about December 20,
2013 or such other date as the Company may determine, and is subject to certain
conditions including, but not limited to, the receipt of all necessary approvals
including the approval of the TSX Venture Exchange (the "Exchange"). The Common
Shares and Warrants comprising the Units issued pursuant to the Private
Placement will be subject to resale restrictions imposed by applicable
securities laws and the policies of the Exchange.


The Company intends to use the proceeds from the Private Placement to fund the
Company's Vaca Muerta project, as well as for general working capital and
general corporate purposes. 


In connection with the Private Placement, the Company may pay eligible persons a
finder's fee of up to 6% of that portion of the proceeds of the Private
Placement that result from such parties' efforts, subject to compliance with
applicable securities laws.


For further information on Azabache please visit the Company's website at
www.azaenergy.com.


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.


This press release contains forward-looking statements. More particularly, this
press release contains statements concerning the terms of the PA, the
anticipated timing for the closing of the Private Placement, the expected use of
proceeds of the Private Placement and the Company's future operations. The
forward-looking statements contained in this document are based on certain key
expectations and assumptions made by Azabache, including with respect to
Company's ability to close the Private Placement, its ability to use the
proceeds of the Private Placement as anticipated and its expected future
operations. 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. 


These include, but are not limited to, the failure to obtain necessary
regulatory approvals, risks associated with the oil and gas industry in general
(e.g., operational risks in development, exploration and production; delays or
changes in plans with respect to exploration or development projects or capital
expenditures; the uncertainty of reserve estimates; the uncertainty of estimates
and projections relating to production, costs and expenses, and health, safety
and environmental risks), commodity price and exchange rate fluctuations. 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.


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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Azabache Energy Inc.
Claudio Larotonda
President & CEO
+54.11.4893.4004
[e-mail]


Azabache Energy Inc.
Glenn Van Doorne
Chairman
+403.966.8739
[e-mail]
www.azaenergy.com