Offer to Acquire Avana Petroleum Limited by Vanoil Energy Ltd.

Vanoil Energy Ltd., ("Vanoil") (TSX VENTURE:VEL), a TSX-V-listed oil and gas
company with a portfolio of assets in East Africa, is pleased to announce that
Vanoil and its wholly-owned subsidiary, Vanoil Energy Holdings Ltd. (the
"Offeror") has entered into a warranty and implementation agreement with the
majority shareholders (being Exchange Minerals Limited, Carinia Holdings Limited
and Mr. Sam Malin (the "Principal Shareholders")) of Avana Petroleum Limited
("Avana") and will today make an offer to acquire the entire issued share
capital of Avana on the terms set out below (the "Offer"). 


Highlights:



--  All share transaction recommended by the independent board of directors
    of Avana and supported by Avana's CEO, Sam Malin, with irrevocable
    undertakings to accept the Offer from the Principal Shareholders,
    representing approximately 82 % of Avana's issued share capital. 
    
--  The Principal Shareholders have undertaken to procure that the Offer is
    accepted by certain other shareholders of Avana to ensure that the
    Offeror has received valid acceptances in respect of at least 90% of
    Avana's issued share capital (the "Acceptance Condition"). Accordingly,
    it is expected that the Offer will become wholly unconditional later
    today. 
    
--  Increases, at completion, Vanoil's net recoverable mean unrisked
    prospective resources from 927 million barrels of oil equivalent ("boe")
    to approximately two billion boe. The Company will file in short order a
    National Instrument 51-101 report on the Seychelles Asset and Kenyan
    Asset (as defined below), which will be available on SEDAR. 
    
--  Brings geological and geopolitical diversification to the existing
    Vanoil portfolio with Avana's: 
    
    --  25% participating interest in oil and gas exploration Areas A and B
        in the Seychelles ("Seychelles Asset"), alongside partner East
        African Exploration Seychelles Limited (a wholly owned subsidiary of
        Afren plc ("Afren")); and 
        
    --   anticipated receipt of a 10% participating interest in Kenya
        offshore Block L9 (the "Kenyan Asset"), alongside partner Dominion
        Petroleum Kenya Limited (a wholly owned subsidiary of Ophir Energy
        plc ("Ophir")) 
        
--  Accelerates Vanoil's exploration program by facilitating the conduct of
    two 3D seismic surveys in 2013 and several drilling events in 2014, at
    the latest. 
    
--  Sam Malin, the CEO and founder of Avana, to be appointed to Vanoil's
    Board of Directors. 



Aaron D'Este commented: "The vision of Vanoil's Board of Directors is to provide
a compelling and robust proposition for investors committed to oil exploration
in East Africa. The proposed acquisition of Avana will accelerate Vanoil towards
this goal. In a single transaction, Vanoil will potentially double its net
recoverable mean unrisked prospective resources, reduce risk through
diversification, and gain well-known and reputable joint venture partners with
extensive experience across Africa. We are also delighted that Sam Malin has
agreed to join the Board of Vanoil and pleased to note that the share-for-share
nature of the deal preserves our cash position. We believe that the acquisition
of Avana will prove to be a transformational event for Vanoil and its
shareholders and we note that the anticipated US$27 million cash from our
previously announced Fluormin acquisition will greatly assist with the rapid
execution of work programs across our entire portfolio." 


Sam Malin, CEO of Avana, commented: "The acquisition of Avana by Vanoil is a
major step in growing a significant East African exploration company with
prospective onshore and offshore acreage across several countries. I look
forward to taking up my new position within Vanoil supporting the ongoing
development of a well placed regional player and striving to deliver value to
shareholders."


Benefits of the Offer

This transaction will bring geological and geopolitical diversification to the
existing Vanoil portfolio, including acreage in Kenya subject to the anticipated
receipt of the Kenyan Asset (subject to approval by the Government of Kenya) and
a new geography for Vanoil, the Seychelles, with a 25% interest in Areas A and
B. The enlarged group will, following the anticipated receipt of the Kenyan
Asset, hold blocks in four separate basins, two onshore and two offshore. 


Following the Offer, Vanoil's net recoverable mean unrisked prospective
resources will increase from 927 million boe to approximately two billion boe,
accelerating Vanoil's vision of becoming an emerging leader in oil and gas
exploration in East Africa. 


Vanoil's and Avana's shareholders will benefit through this further
diversification and consequent de-risking of Vanoil's portfolio, by providing
better access to financing, joint venture partners and in-country service
providers. 


The Offer

The Offer has been recommended by the independent board of directors of Avana
and supported by Sam Malin. The Offeror will today post an offer document to all
shareholders of Avana, pursuant to which the Offeror will offer to acquire the
entire issued share capital of Avana for such consideration being:




--  the issue of a total of 12,500,000 common shares in Vanoil, with
    approximately 0.282 common shares in Vanoil being issued in exchange for
    each ordinary share held in the capital of Avana ("Avana Share"); 
    
--  the issue of a total of 5,000,000 Vanoil warrants, with approximately
    0.112 warrants granted per Avana Share held, with each whole warrant
    entitling the holder to purchase one common share in Vanoil at an
    exercise price of CAD$1.00; 
    
--  subject to the anticipated receipt by the enlarged group of the Kenyan
    Asset, the issue of a further 12,500,000 common shares in Vanoil, with
    approximately 0.282 common shares in Vanoil being issued in exchange for
    each Avana Share held; 
    
--  subject to the operator of the Kenyan Asset spudding a second well on
    Block L9, having drilled a previous well which has encountered
    hydrocarbons, the payment of US$2 million in cash, equating to
    US$0.04515012 for each Avana Share held; and 
    
--  subject to the operator of the Seychelles Asset spudding a second well
    on the Seychelles Asset, having drilled a previous well which has
    encountered hydrocarbons, the payment of US$2 million in cash, equating
    to US$0.04515012 for each Avana Share held.



Vanoil has agreed to guarantee the performance of the obligations of the Offeror
as and when they become due in accordance with the terms of the Offer for the
benefit of all shareholders of Avana and their respective successors,
transferees and assigns. This guarantee remains in place irrespective of any
intermediate payment or discharge in full or in part of any of the obligations
by the Offeror. Exchange Minerals Limited has also agreed to defer the issue to
it of certain common shares in Vanoil, in compliance with the requirements of
the TSX-V.


The only condition to the Offer is the Acceptance Condition. 

Subject to satisfaction of the Acceptance Condition, and notwithstanding that
the Offer will remain open for acceptance, the Offeror intends to apply the
provisions of Part X Chapter 3 of the Isle of Man Companies Act 2006, by issuing
a Section 160(2) Notice to acquire compulsorily the remaining Avana Shares on
the same terms as the Offer.   


All securities issued pursuant to the Offer are subject to a 4 month hold period.

If you are a shareholder of Avana, once you have received and read the offer
document and the accompanying form of acceptance, should you have any queries,
please contact Cavendish Trust Company Limited on [phone]. 


Any further announcements made in relation to the Offer, will be made by Vanoil
on behalf of the Offeror and copies of such announcements will be available on
the website of Vanoil at: www.vanoil.ca.


Block L9 - Kenya

Block L9 is a 5,065 square kilometres block located off the coast of Mombasa in
the southern territorial waters of Kenya; a region in which all of the
neighbouring acreage is held by Total, Anadarko, BG, Apache, PTT and their
respective partners. Block L9 lies directly to the south of Block L8, on which
Apache discovered gas in the Mbawa prospect earlier this year. The results of a
560 km2 3D seismic survey conducted in Q2 2012 suggest that the analogous Mbawa
South prospect extends across the border of Block L8 into L9, and a second 1,536
km2 3D seismic survey conducted by Ophir in Q3 2012 illuminated potential oil
prospects in a separate fairway spanning the southern half of Block L9 and
notably the Simba Graben. Ophir management presentations in October 2012 note
that the estimated gross recoverable mean unrisked prospective resources on
Block L9 are 2.7bbbl/11.8 TCF of natural gas and that drilling will commence in
2013.


Seychelles

Areas A and B comprise in excess of 14,000 square kilometres in total and are
located on the Seychelles plateau and adjacent zones in the northern waters of
the Seychelles in a region where Amoco previously drilled three wells with
hydrocarbon shows. Avana and its partner have acquired 8,500 square kilometres
of 2D seismic in the Seychelles (in addition to over 4,000 square kilometres
acquired by other parties over the blocks) and an extensive new 3D seismic
survey is scheduled to commence in early 2013. Multiple oil seeps have been
observed on Areas A and B, and tar balls of natural origin are abundant
throughout the region. In August 2012, Afren's management noted that the
estimated gross recoverable mean unrisked prospective resources on Areas A and B
are 2.8 billion boe and that drilling is due to commence in Q4 2013.


About Vanoil Energy Ltd and the Offeror

Based in Vancouver, Canada, Vanoil is an internationally diversified resource
company that has a portfolio of oil and gas assets in Kenya and rights to
acquire further oil and gas assets in Rwanda. In Kenya, Blocks 3A and 3B were
acquired in October 2007 through the signing of a Production Sharing Contract
with the Government of the Republic of Kenya. Blocks 3A and 3B, which cover
24,912 square kilometres, are part of the vastly under-explored Cretaceous
Central African Rift Basin System. Vanoil is preparing to drill in Q1 2013 its
first exploration well on its Kenyan concession. Vanoil also has the exclusive
right to negotiate a production sharing agreement with the Government of Rwanda
in connection with a 1,631 square kilometres territory in the East Kivu Graben
in Rwanda at the southern extension of the Albertine Graben where Heritage Oil
plc and Tullow Oil plc made their historic discovery in neighbouring Uganda. 


The Offeror is a company incorporated in the British Virgin Islands and is a
wholly owned subsidiary of Vanoil.


On behalf of the Board of

VANOIL ENERGY LTD. 

Aaron D'Este, Chief Executive Officer

None of the US Securities and Exchange Commission, any US state securities
commission or any other US regulatory authority has passed comment upon or
endorsed the merits of the Offer or the accuracy, adequacy or completeness of
this communication. Any representation to the contrary may be a criminal
offence.


Disclaimer for Forward Looking Information

This news release includes forward looking statements that are subject to
assumptions, risks and uncertainties. Statements in this news release which are
not purely historical are forward looking statements, including without
limitation any statements concerning Vanoil's and Avana's intentions, plans,
estimates, beliefs or expectations regarding the future. Although Vanoil and
Avana believe that any such intentions, plans, estimates, beliefs and
expectations in this news release are reasonable, there can be no assurance that
any such intentions, plans, beliefs and expectations will prove to be accurate.


Vanoil cautions readers that all forward looking statements, including without
limitation those relating to Vanoil's and Avana's future operations and business
prospects, are based on assumptions none of which can be assured, and are
subject to certain risks and uncertainties that could cause actual events or
results to differ materially from those indicated in the forward looking
statements. Readers are advised to rely on their own evaluation of such risks
and uncertainties and should not place undue reliance on forward looking
statements.


Any forward looking statements are made as of the date of this news release, and
both Vanoil and Avana assume no obligation to update the forward looking
statements, or to update the reasons why actual events or results could or do
differ from those projected in the forward looking statements. 


Notice to US Shareholders

The Offer is being made for the securities of a company incorporated in the Isle
of Man that does not have securities registered under Section 12 of the United
States Securities Exchange Act of 1934, as amended (the "US Exchange Act").
Accordingly, the Offer is not subject to Section 14(d) of the US Exchange Act,
or Regulation 14D promulgated by the U.S. Securities and Exchange Commission
thereunder. The Offer is made in the United States with respect to securities of
a "foreign private issuer", as such term is defined in Rule 3b-4 under the US
Exchange Act, in accordance with the corporate and tender offer rules applicable
to Isle of Man companies. Shareholders resident in the United States should be
aware that such requirements are different from those of the United States
applicable to tender offers under the US Exchange Act and the rules and
regulations promulgated thereunder. Financial statements included and
incorporated by reference herein have not been prepared in accordance with U.S.
general accepted accounting principles.


The Vanoil securities as part of the consideration under the Offer have not been
and will not be registered under the U.S. Securities Act (the "US Securities
Act") and are being offered in the United States pursuant to the exemption from
registration provided by Rule 802 thereunder. Securities issued to US
shareholders in reliance on Rule 802 will be "restricted securities" within the
meaning of Rule 144 under the US Securities Act to the same extent and
proportion that that the securities exchanged by the holder in that transaction
were restricted securities. Restricted securities may be offered, sold, pledged
or otherwise transferred, directly or indirectly, in the United States only
pursuant to an exemption or exclusion from the registration requirements of the
US Securities Act and applicable state securities laws


FOR FURTHER INFORMATION PLEASE CONTACT: 
Vanoil Energy Ltd.
Malcolm Burke
604 689-1515 ext 108 or 604 220 2000
[e-mail]


Vanoil Energy Ltd.
Don Padgett
604 689-1515 ext 104 or 760-485-7678
[e-mail]


Vanoil Energy Ltd.
Scott Rose
604 684 1974 ext 227 or 604 209 5444
[e-mail]
www.vanoil.ca