Shona Energy Company, Inc. Announces Commercialization of Nelson Gas Asset

    




 CALGARY, March 14, 2012 /CNW/ - Shona Energy Company, Inc.   ("Shona" or the "Company"), today announced that it is delivering a total of 14.0 million cubic  feet per day (mmcfpd) of natural gas into the Colombian gas market  under two contracts. At this delivery rate, Shona is generating  approximately US$2 million per month of gross revenue, with the  majority of the gas sales coming from Shona's Nelson field. 

 "The initial commercialization of this important gas asset is essential  to Shona's growth strategy going forward," said James L. Payne, CEO of  Shona Energy. "With our existing gas reserve base, we have the  capability to produce an additional 30 mmcfpd of natural gas.  Our  challenge now is to finalize these sales either through exercise of  existing options, or through new opportunities in the Colombian gas  market. " 

 Under the terms of Geoproduction's larger contract, Shona will provide a  firm volume of 11.0 mmcfpd for 2012 and 2013, and a firm volume of 12.5  mmcfpd from 2014 to 2021. Under the terms of the smaller contract,  Shona will sell a firm 3 mmcfpd and an interruptible 2 mmcfpd over a  seven year term.   Pending mutual agreement on pricing and terms, both  purchasers have options to acquire additional gas volumes. 

 The Nelson gas discovery on Shona's Esperanza Block is located in  Colombia's Lower Magdalena Basin. The block is 100% owned and operated  by Geoproduction, a wholly-owned subsidiary of Shona. The Nelson field  has gross reserves of 164 billion cubic feet (bcf) according to the NI  51-101 compliant report effective December 31, 2010 and entitled  "Forecast of Production and Revenue in and related to Arianna,  Canaflecha, Katana and Nelson Fields located in Esperanza Block,  Colombia", which was prepared by Collarini Associates. 

 About Shona 

 Shona is an international oil and natural gas exploration, development  and production company focusing on South America, specifically Colombia  and Peru. The Company's assets currently include interests in the  Company-operated Esperanza block located in Colombia's Lower Magdalena  Basin, the non-operated Serrania, Los Picachos and Macaya Blocks in  Colombia's Caguan Basin, and the non-operated Block 102 in Peru's  Maranon Basin. The common shares of the Company trade on the TSX  Venture Exchange under the stock symbol "SHO". More information on the  Company is available at www.shonaenergy.com. 

 Cautionary Statements 

 Certain information included in this press release constitutes  forward-looking information under applicable securities legislation.   Such forward-looking information is provided for the purpose of  providing information about management's current expectations and plans  relating to the future. Readers are cautioned that reliance on such  information may not be appropriate for other purposes, such as making  investment decisions. Forward-looking information typically contains  statements with words such as "anticipate", "believe", "expect",  "plan", "intend", "estimate", "propose", "project" or similar words  suggesting future outcomes or statements regarding an outlook.  Forward-looking information in this press release may include, but is  not limited to, the payment of the dividend.  Forward-looking  information is based on a number of factors and assumptions which have  been used to develop such information but which may prove to be  incorrect.  Although Shona believes that the expectations reflected in  such forward-looking information is reasonable, undue reliance should  not be placed on forward-looking information because Shona can give no  assurance that such expectations will prove to be correct. In addition  to other factors and assumptions which may be identified in this press  release, assumptions have been made regarding and are implicit in,  among other things, the ability of Shona to complete transactions  described in this press release.  Readers are cautioned that the  foregoing list is not exhaustive of all factors and assumptions which  have been used.  Shona undertakes no obligation to update  forward-looking statements if circumstances or management's estimates  or opinions should change, unless required by law.  The reader is  cautioned not to place undue reliance on this forward-looking  information. 

 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 press  release. 

Shona Energy Company, Inc.


CONTACT:  please contact either of the following individuals:Michael Wilkes, CFOShona Energy Company, Inc.Houston, Texas713-622-8809Shetal Mentlewski, VP Admin & LegalShona Energy Company, Inc.Houston, Texas713-622-8809 


    

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