Shona Energy Company, Inc. Announces Dividend on Preferred Shares

CALGARY, Feb. 15, 2012 /CNW/ - Shona Energy Company, Inc. (SHO-TSX.V)("Shona" or the "Company"), today announced that its board of directors has declared a dividend-in-kind (the "Dividend") on the Company's 175,939 Series "A" Preferred Shares (the "Preferred Shares") equal to 10% of the stated par value of US$100 per Preferred Share, to its shareholders of record as at February 1, 2012 (the "Record Date"). Each holder of the Company's Preferred Shares on the Record Date will receive 1 Preferred Share for every 10 Preferred Shares previously held. Shareholders will not receive fractional Preferred Shares, but rather a cash payment in $US based on the balance of the total Dividend payable.

Each Preferred Share is convertible at any time until the fifth year anniversary of the date on which such shares were issued, at the option of the holder thereof, and subject to the call right of the Company as set forth in the articles of the Company at any time within two years from the date of issuance, into either Class "A" Common Shares or Class "B" Non-Voting Common Shares of the Company. The number of Class "A Common Shares or Class "B" Non-Voting Common Shares of the Company to which the holder of the Preferred Share is entitled to receive on conversion shall be obtained by multiplying the number of Preferred Shares held by the holder thereof by 172.41, subject to adjustment as a result of certain corporate events. The board of directors shall determine in its sole discretion whether only Class "A" Common Shares or Class "B" Non-Voting Common Shares are to be issued on conversion of the Preferred Shares or a combination thereof.

The Dividend will be subject to Canadian income taxes and the Company must withhold and remit Canadian tax at a rate of 25% of the gross amount of the Dividend paid to holders of Preferred Shares that are not residents of Canada, subject to a reduced withholding rate under an applicable tax treaty. Under the tax treaty in effect between Canada and the United States, the withholding rate is 15%. In order to fulfill such withholding requirements, rather than issue Preferred Shares in satisfaction of the entire Dividend to shareholders who are non-residents of Canada, the Company will issue such portion of the Dividend in $US cash as may be necessary to meet the Company's withholding obligations with respect to such non-resident shareholders. The $US cash portion will be delivered to non-resident shareholders, net of any withholding taxes, together with the balance of the Dividend payable in Preferred Shares.

The payment date for the Dividend is on or about February 15, 2012.

The TSX Venture Exchange ("TSXV") has approved the reservation for/and listing of the Class "A" Common Shares on the TSXV issuable in accordance with the potential conversion of the additional Preferred Shares issued pursuant to the Dividend.

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 and the timely receipt of any required regulatory and shareholder approvals.  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.

The securities of Shona have not been and will not be 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 the registration requirement.  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 jurisdiction in which such offer, solicitation or sale would be unlawful.

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.

SOURCE Shona Energy Company, Inc.

For further information:

please contact either of the following individuals:

Michael Wilkes, CFO
Shona Energy Company, Inc.
Houston, Texas
713-622-8809      

Shetal Mentlewski, VP Admin & Legal
Shona Energy Company, Inc.
Houston, Texas
713-622-8809

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Shona Energy Company, Inc.

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