Diaz Announces Q3 2012 Financial Results

Diaz Resources Ltd. (TSX VENTURE:DZR) (the "Company" or "Diaz") wishes to
announce that it has filed on SEDAR its Interim Financial Statements and MD&A
for the nine months ended September 30, 2012.


For the nine month period, average production on a barrel of oil equivalent
basis declined to 360 BOEd compared with 400 BOEd in the prior year as the
Company shut-in over half of its natural gas production. Oil production
increased to 211 bopd from 113 bopd for the same period in 2011. Revenues
increased to $4.2 million from $3.7 million and cash flow from operations
increased slightly to $137,000 from $116,000 in 2011.


Capital Restructuring

October 19, 2012, the Company announced a proposal to reorganize the Company's
capital structure and convert an aggregate of $15,085,000 of debt into equity,
eliminating approximately $1,584,000 in annual interest payments, through a plan
of arrangement under the Alberta Business Corporations Act (the "Share and Debt
Reorganization"). Pursuant to the Share and Debt Reorganization: (i) the Common
Shares will be consolidated on the basis of 25 Pre-Consolidation Shares for one
new Post-Consolidation Share; (ii) the outstanding Unsecured Debentures will be
converted into Post-Consolidation Shares at a conversion rate of 1 Post-
Consolidation Share for every $0.477 of principal; (iii) the outstanding Secured
Debentures will be converted into Post-Consolidation Shares at a conversion rate
of 1 Post-Consolidation Share for every $0.105 of principal; and (iv) the
accrued and unpaid interest on the Debentures will be cancelled without any
payment.


An Information Circular further describing the Share and Debt Reorganization and
the background thereto was mailed to shareholders and debentureholders in
November. Shareholders and debentureholders of record will be entitled to vote
on the Share and Debt Reorganization at the Securityholder Meeting, which is
expected to be held on or about December 14, 2012. Assuming that all approvals
are obtained and that all other conditions precedent are satisfied, closing of
the Share and Debt Reorganization is expected to occur as soon as possible
following the Securityholder Meeting.


Production & Operations

The Company's Q3 2012 production decreased to average 263 BOEd compared with the
Q3 2011 average production of 390 BOEd. The reduction resulted from a decline
from Lloydminster production that has now stabilized at approximately 90 bopd
(45 bopd net) and the shut-in of natural gas production at the Company's Retlaw
and Enchant fields.


During the third quarter, the Company focused on increasing oil production from
its Macklin field by installing additional water handling facilities. This
included the tie in of an existing water disposal well to the main battery by
pipeline and reconfiguration of the battery to handle increased volumes of
water. As a result of this effort, early indications show substantially improved
production from the Macklin field with no additional drilling expenditures.


This was completed October 1st resulting in improved water disposal for 6 of its
wells, to 500 barrels of fluid per day per well from 200 barrels of fluid per
day per well. Oil production increased by 80% at the Macklin field from 167 bopd
(75 bopd net) in September to an estimated 300 bopd (135 bopd net) in October.


The foregoing results, while very encouraging, will of course result in the
continued decline of production rates, but now, from a higher base rate. The
Company anticipates that production can further be increased in the future from
additional facility expansions and development drilling at the Macklin field.


Financial

The Company's Q3 2012 revenues decreased to $988,000 from $1.2 million and cash
flow from operations decreased to negative $433,000 compared with negative
$35,000 in Q3 2011. The Q3 2012 cashflow decrease resulted from an increase in
operating costs which included a much larger property tax provision and
increased water disposal costs. Water disposal costs at Macklin should be
reduced in future periods due to the expansion of water handling capacity
discussed earlier.


The Company had a net loss for the quarter of $939,000 compared with a net loss
of $1.6 million in Q3 2011. Net loss for the nine month period was $9.3 million
compared with $2.8 million for the same period in the prior year as the Company
took an impairment charge on assets of $6.7 million resulting from a revised
reserves evaluation at September 30, 2012.


Diaz incurred $263,000 of capital expenditures, net of dispositions, during the
quarter compared with $483,000 for Q3 2011. For the ninth month period, net
capital spending was $2.4 million compared with $1.9 million for the same period
in the prior year. Net capital expenditures for the three and nine month periods
ended September 30, 2012, were financed from cash flow from operations, working
capital and an increase in the Company's bank debt.


At September 30, 2012, Diaz had net current debt of $4.2 million compared with
net current debt of $1.7 million at the beginning of the year.


Outlook

Management believes the Share and Debt Reorganization, outlined above, will
strengthen the Company's balance sheet and better position Diaz to pursue
financing or strategic alternatives that would facilitate the development of its
asset base.


Diaz is an oil and gas exploration and production company based in Calgary,
Alberta. Diaz's current focus is on oil development and exploration in Alberta
and Saskatchewan.


ADVISORY: Certain information provided in this press release constitutes
forward-looking statements. The words "anticipate", "expect","project",
"estimate", "forecast", "plan", "believe" and similar expressions are intended
to identify such forward-looking statements. This press release contains
forward-looking statements pertaining to, without limitation: the proposed terms
of the Share and Debt Reorganization; and the proposed timing for holding the
Special Meeting and for closing the Share and Debt Reorganization. We have made
various assumptions relating to the forward-looking statements contained herein,
including in respect of our ability to obtain all requisite approvals and
otherwise satisfy the conditions precedent to closing the Share and Debt
Reorganization. Although we believe that the expectations reflected in these
forward-looking statements, and the assumptions on which they are made, are
reasonable, undue reliance should not be placed on them as we can give no
assurance that they will prove to be correct. Since forward-looking statements
address future events and conditions and are based on various assumptions, by
their very nature they involve inherent risks and uncertainties that contribute
to the possibility that the forward-looking statements may not be accurate,
which may cause our actual performance and financial results in future periods
to differ materially from any estimates or projections of future performance or
results expressed or implied by such forward-looking statements. These risks and
uncertainties include, among other things, failure to obtain requisite third
party and regulatory consents and approvals required to complete the Share and
Debt Reorganization and otherwise satisfy all of the conditions precedent to
closing the Share and Debt Reorganization, and the other factors described in
our public filings available at www.sedar.com. Readers are cautioned that this
list of risk factors should not be construed as exhaustive. The forward-looking
statements contained in this press release are made as of the date hereof and we
undertake no obligation to publicly update 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. The
forward-looking statements contained in this document are expressly qualified by
this cautionary statement.


Forward-looking statements or information are based on a number of material
factors, expectations or assumptions of Diaz which have been used to develop
such statements and information but which may prove to be incorrect. Although
Diaz believes that the expectations reflected in such forward-looking statements
or information are reasonable, undue reliance should not be placed on
forward-looking statements because Diaz can give no assurance that such
expectations will prove to be correct. In addition to other factors and
assumptions which may be identified herein, assumptions have been made
regarding, among other things: that Diaz will continue to conduct its operations
in a manner consistent with past operations; results from drilling and
development activities will be consistent with past operations; the continued
and timely development of infrastructure in areas of new production; the
accuracy of the estimates of Diaz's reserve and resource volumes; continued
availability of debt and equity financing and cash flow to fund Diaz's current
and future plans and expenditures; the impact of increasing competition; the
general stability of the economic and political environment in which Diaz
operates; the general continuance of current industry conditions; the timely
receipt of any required regulatory approvals; the ability of Diaz to obtain
qualified staff, equipment and services in a timely and cost efficient manner;
drilling results; the ability of the operator of the projects in which Diaz has
an interest in to operate the field in a safe, efficient and effective manner;
the ability of Diaz to obtain financing on acceptable terms; future commodity
prices; currency, exchange and interest rates; regulatory framework regarding
royalties, taxes and environmental matters in the jurisdictions in which Diaz
operates; and the ability of Diaz to successfully market its oil and natural gas
products.


The forward-looking statements contained in this press release are made as of
the date hereof and Diaz undertakes no obligations 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.


Where amounts are expressed on a barrel of oil equivalent (boe) basis, natural
gas volumes have been converted to barrels of oil at six thousand cubic feet
(mcf) per barrel (bbl). Boe figures may be misleading, particularly if used in
isolation. A boe conversion of six thousand cubic feet per barrel is based on an
energy equivalency conversion method primarily applicable at the burner tip and
does not represent a value equivalency at the wellhead. References to oil in
this discussion include crude oil and natural gas liquids (NGLs).


FOR FURTHER INFORMATION PLEASE CONTACT: 
Diaz Resources Ltd.
Robert W. Lamond
Chairman
[phone]
[phone] (FAX)


Diaz Resources Ltd.
Donald K. Clark
Chief Operating Officer
[phone]
[phone] (FAX)
[e-mail]
www.diazresources.com