Alange Energy announces September 30, 2009 financial results and provides
operational update

TORONTO, Nov. 30 /CNW/ - Alange Energy Corp. (TSXV: ALE) announced today its financial results for the quarter ended September 30, 2009 and provided an update on operational matters.

Luis Giusti Sr., Chief Executive Officer, commented: "We are very pleased with our first reporting of results, which demonstrate the Company's potential for organic growth, while successfully expanding our working interests in our most prospective fields, thereby creating shareholder value through rapid production growth. Among its peer group, the Company is extremely well positioned with a solid and fully financed capital expansion plan that will enable further growth into 2010."

    -   As of the end of November 2009, total daily production rates at
        Cubiro increased 31% from the end of September. Alange Energy's
        current share of the daily production of approximately 1,400 bls per
        day is almost double the daily rate at the end of September.
    -   At Carbonera La Silla, recent reservoir studies conducted jointly
        with Halliburton were recently concluded, supporting a program of
        five workovers leading to the identification of three new development
        locations and a proposed 3D seismic survey.
    -   At Carbonera production from the Cerro Gordo-1 well is stable and
        since acquiring and operating the Carbonera facilities, Alange Energy
        has managed to cut production costs by 30%.
    -   At Mecaya, the Company is in the process of formalizing three
        separate transactions that will result in a combined 58% working
        interest in the Mecaya Block, significantly impacting the Company's
        ability to ramp up production in this block.
    -   By the end of 2009 Alange Energy will have five drill rigs in
        operation, three of them working in development and exploration
        drilling, and two of them in workovers. This slate will strongly
        position the Company for its planned intensive 2010 drilling program.

    Financial Results

Alange Energy announced today the release of its unaudited consolidated financial results for the three-month period ended September 30, 2009, together with its Management's Discussion and Analysis. These documents are posted on the Company's website and SEDAR at

This is the first release of quarterly results following the completion of the reverse takeover transaction on July 13, 2009 and closing of the acquisitions of the initial investment in the Cubiro Block and the remaining equity interest in Prospero Hydrocarbons Inc. The Company has changed its fiscal year to December 31 and the results of operations for the current quarter are not necessarily indicative of the results that may be expected for the six-month period ending December 31, 2009. All figures are reported in US dollars except for production and share data, or as otherwise stated.

For the quarter ended September 30, 2009, Alange Energy reported total revenue of $6.6 million, including revenue from oil and gas operations of $3.4 million from the Company's gross share of production, before deduction of royalties, of 60,100 barrels of oil equivalent ("boe") and a foreign exchange gain of $3.1 million related to the subsequent conversion of the Canadian dollar cash proceeds from the July 2009 C$140 million private placement into US dollars as the Canadian dollar strengthened. The Company had no revenue in the prior year comparative period.

The Company reported a net loss of $4.7 million, or $0.01 per share, for the quarter ended September 30, 2009 that included a $5.3 million charge for the fair value of stock-based compensation associated with the grant of 29.6 million stock options in August 2009 at C$0.435 per stock option for a period of five years. For the corresponding quarter a year ago, the net loss was $1.8 million, or $0.02 per share.

At September 30, 2009, the Company had cash of $47.7 million available to fund its planned exploration and capital investment program over the next 15 months. In addition, the Company has restricted cash balances of $4.5 million supporting a portion of its current exploration program expenditures. The Company remains debt-free and has 745 million common shares issued and outstanding.

    Operational Update



As of the end of November 2009, total daily production rates are up 31% from the end of September. Alange Energy's current share of the daily production of approximately 1,400 bls per day is almost double the daily rate at the end of September. The 31% increase in production growth is due to improvements in total production and the recently announced acquisition of an additional 19.27% working interest in the Cubiro developing area. Supported by the ongoing development campaign, Alange's share of daily production is expected to reach 2,600 bls per day by the end of 2009.

When the Company took over as operator of the Cubiro property following its July 31, 2009 acquisition, it immediately commenced the process of expanding the capacity of the production facilities to eliminate the bottlenecks in the handling facilities, which limited production sourcing to only two or three wells at any one time. This included capital investments in the storage, pumping, separation and treatment capacities of the production central facility. Also, six wells have been worked over to change their lifting method from hydraulic to electro-submergible pumps. While the changeovers had an initial adverse impact on daily production rates in the quarter ended September 30, 2009, production capacity has now been expanded to 10,000 bls of oil per day and 36,000 bls of water per day (treatment), up from the 10,000 bls of total fluids per day before the upgrade project was started.


Alange Energy's current development drilling campaign at Cubiro is focused on increasing its probable and possible reserves with two development wells, and potentially a third well which is expected to add to production in the next 30 days.

Drilling at Careto-5 has reached total depth and is currently under evaluation. Well logs showed good oil development in the main objective C-7, but they also unveiled a very attractive oil sand development in the deeper Gacheta formation, where initial tests are showing stable natural flow of 500 bls per day of 34 degrees API clean oil. Although, as expected, C-7 shows an excellent sand development; the Gacheta find represents the discovery of a new field. Also, a third horizon, Guadalupe, will be tested. The well will be on permanent production by December 10. Careto-6 has reached total depth of 8,118 feet. Well logs indicate a higher than average sand development in C-7 (16 feet), holding promise of a good production rate. The well is expected to be completed on December 15. Careto-8 is also on schedule to be drilled in December and the rig is on site. Careto-7 will start drilling during Q1 2010. For the future drilling program, five environmental licenses are going through the approval process.


A total of 250 km(2) of 3D seismic surveys were recently acquired in the block, resulting in the characterization of the Barranquero prospect and the identification of seven additional structural prospects (Criollo, Cazador, Copa 1, 2 and 3, Turpial and Azulejo). At Tijereto, an exploration well tested heavy oil in UNE and found C-7 wet. The well has been suspended for additional testing in Q2 2010. The Company is currently in the process of acquiring 100 km2 of new seismic work to delineate the extensions of the Careto and Arauco fields and to complete coverage of the Turpial and Azulejo prospects. At Barranquero, an exploration well is scheduled for January 2010 which is Alange Energy's last commitment with the ANH and to be completed by May 2010. The exploration drilling campaign is scheduled to start in Q1 2010 after the environmental permits are granted in December 2009.


An integrated reservoir study has been carried out jointly with an independent consulting firm, leading to the confirmation of the prospectivity of the Cretaceous for gas and the Tertiary for oil. Currently, the acquisition of 24 km(2) of 3D seismic during Q1 2010 is in the planning stage with the survey aimed at optimizing subsurface information on both horizons. In addition, plans are underway to execute three workovers in the T-Burns, Cerrito 1 and Cerrito 2 wells. T-Burns is scheduled for mid-December 2009 with Cerrito 1 and Cerrito 2 to follow in January 2010. This workover program is expected to increase production from Cerrito field to 4.0 MMcfpd by February 2010, from the current 0.4 MMcfpd.

Alange Energy has negotiated a 3-year gas sales contract with Invercolsa (Gases del Oriente), for supply to the city of Cucuta, at a price of $5.00 per Mcf for production between 3.5 MMcfpd and 5.0 MMcfpd, with a provision taking the price to $6.00 per Mcf when production exceeds 5.0 MMcfpd.

Carbonera La Silla

An integrated reservoir study conducted jointly with Halliburton was recently concluded, supporting a program of five workovers. The first two wells of this program will be intervened in the next four weeks with the expectation of developing an oil production of 100 Bls per day before year end. However, the study also suggests recompletion of those wells in the shallower Formation Mirador which holds better promise. The recompletions will be undertaken in late Q1 2010. Results of the study also led to the identification of three new development locations and a proposed 3D seismic survey. The Company expects this study to lead to the full realization of this asset's value for Alange Energy.



The Carbonera production from the Cerro Gordo-1 well is stable. Since acquiring and operating the Carbonera facilities, Alange Energy has managed to cut production costs by 30%. The Cerro Gordo-La Florida project, which consists of building a gas pipeline to a new delivery point, is currently underway and expected to be finalized by April 2010. The completion of this project will eliminate transport bottlenecks and enable a production increase of 100% by Q2 of next year. In November 2009, Alange Energy signed a 5-year gas sales contract with MC2 at a wellhead price of $4.75 per Mcf once the pipeline is complete, up from the $2.50 per Mcf at present.


The block holds an important potential for natural gas at the Cretaceous and oil at the Tertiary. The recently drilled Paramito-1 well has proved a structural/stratigraphic model that laterally extends the previously known natural gas accumulation in the Cretaceous. Paramito-1 had a gas blowout in mid-September 2009 that was controlled promptly. After the well was under control, the evaluation was initiated on the Tibu, Aguardiente, Cogollo and La Luna formations, all with petrophysical and mudlog shows. These tests are currently underway and are scheduled to be finalized in early-December. Tertiary formations would be the target of a future exploration well in 2010 with the objective of investigating the productivity of several oil zones drilled and untested. This well fulfills the commitment with the ANH, with a deadline of April 2010.


Alange Energy has received approval from the ANH to consolidate exploration phases 1 and 2. A 75-km(2) 2D seismic survey has been acquired and processed, and the existing 50-km(2) 3D seismic has also been reprocessed. This data base is currently being interpreted to determine the locations of the two exploration wells to be drilled during H1/2010. The geological and geophysical information available provides positive indications of additional prospective resources. The attractiveness of this block is based on the possibility of finding a large field and the fact that it is located on trend with half a dozen prolific fields, including Gran Tierra's Costayaco. An environmental license has been granted and a request for an extension is currently in progress, which would allow for covering an additional drilling area. Accordingly, exploration wells Topoyaco-1 and Topoyaco-2 are now scheduled to be drilled in Q2 2010.

Santa Cruz

Based on its equity in neighboring field Rio Zulia, Ecopetrol agreed with Alange Energy for the joint acquisition of 3D seismic and data sharing. Alange Energy acquired 60 km(2) of 3D seismic and conducted an 800-sample surface geochemical survey. Processing of these surveys is scheduled for December 2009. Two different exploration plays have been depicted and geological and geophysical studies aim at defining a location and drilling an exploration well during the H1/2010.

Mecaya Transactions

The Company is in the process of formalizing three separate transactions that will result in a combined 58% working interest in the Mecaya Block.

On November 12, 2009, the Company, through its subsidiary Prospero, executed an agreement with Mecaya Colombia Partners LLC ("MCP") related to Prospero's existing agreement to acquire a 28% working interest in the ANH Mecaya Contract from MCP for an aggregate purchase price of $4.5 million, $0.2 million of which has previously been paid by Prospero. The transaction is to close on or before December 12, 2009, at which time Prospero will pay $0.1 million in cash and the Company will issue 1,967,593 common shares with an ascribed value of $1.0 million to MCP. On completion of Phase 1 exploration program activities, comprising the construction and improvement of the access road and re-working and equipping of the Mecaya No. 1 well for long-term production testing, Prospero will make the final cash payment of $3.2 million, subject to adjustment for certain items paid on behalf of MCP. Until the final $3.2 million payment is made, Prospero has agreed to pay 100% of the cash calls not covered by the existing funds in the Phase 1 escrow account, MCP's 27% share of the Phase 2 cash calls for the Mecaya No. 2 well and MCP's 27% share of a 3D seismic program on the Mecaya Block. The total of the excess Phase 1 cash calls, the portion of the Phase 2 cash calls and the portion of the 3D seismic program costs paid on behalf of MCP will be deducted from the final payment.

On November 19, 2009, the Company executed a purchase and sale agreement with Petex Offshore Inc. ("Petex") to acquire a 15% working interest in the ANH Mecaya Contract. Petex currently holds a 30% working interest in the Mecaya Block. The Company paid $250,000 on November 25, 2009 and will pay a further $250,000, following the completion of the Phase 1 exploration program. In addition, the Company will fund Petex's 15% share of the Phase 2 cash calls for the Mecaya No. 2 well and the 3D seismic program on the Mecaya Block. The Company's 15% share of the first $500,000 of revenues, net of transportation costs and royalties, from the Mecaya No. 1 well will be paid to Petex as part of the purchase price for the acquired working interest. The Company, or its designate, will also apply with the ANH to become the operator of record under the ANH Mecaya Contract.

Delavaco Energy Inc., acquired by the Company on October 22, 2009, was also in discussion to acquire an additional 15% working interest in the Mecaya Block at the time it was acquired. The Company is continuing these negotiations and expects to reach an agreement shortly.

The Mecaya-1 well, initially drilled in 1989 and then suspended, tested at 650 Bls per day of natural flow, confirming hydrocarbon production and the potential of the block. The data collection and analysis has been completed for an environmental exploitation license. The application will be submitted after completion of the technical report, which is in progress. The first operational step will be the immediate construction of the access road, in order to start the workover of Mecaya-1 in Q1 2010. A 3D seismic survey has been designed and acquisition will start after the corresponding permit is granted. This survey, covering 40 km(2), will be the basis for the field development and will support drilling three or four wells on the structure.

Rio Magdalena

Following the acquisition of Delavaco, Alange Energy has taken over the field operations. The first objective of the development program is the conclusion of the Popa-2 extended well test. Popa-2 was drilled in 2008 and tested for approximately 800 net Boe per day. The future work program includes interpretation of 81 km(2) of 3D seismic and drilling of the Popa-3 well in H1/2010.

La Punta

Alange Energy holds a 3.6% working interest in the field that currently produces from the La Punta-2 well (total 4,600 Bls per day). Drilling of La Punta-3 is planned to start in Q1 2010, after which Alange Energy's working interest will immediately increase to 6%. After drilling of La Punta 4, and 5 is subsequently completed, the Company's working interest will increase to 10%.

    Investor Relations Services

The Company also announced today that it has retained the services of The Capital Lab Inc. to provide investor relations services, subject to regulatory approval. The Capital Lab will advise and support Alange Energy with its investor communications and marketing efforts, focused on developing a comprehensive marketing program aligned with Alange Energy's short and long term strategy.

The investor relations agreement became effective on August 1, 2009 and terminates on February 1, 2010, and may be terminated by either party upon 30 days' notice. Upon termination, the agreement may be renewed for a further six-month period subject to fee and scope review by the parties. Under the terms of the agreement, The Capital Lab will be paid a monthly fee of C$7,000, and upon execution of the agreement, was granted an option to purchase 50,000 common shares of Alange Energy pursuant to Alange Energy's stock option plan. The options are exercisable at a price of C$0.435 per share for a period of five years.

The Capital Lab is a Toronto-based company that provides strategic investor relations and business development solutions for international, publicly listed companies in various industry sectors. It focuses on advising global companies during transition periods, as a part of their team, to provide immediate and full support throughout their growth and evolution.

In addition to the options granted pursuant to the investor relations agreement, The Capital Lab currently holds 15,770 common shares in the capital of Alange Energy.

A conference call will be held on Tuesday, December 1, 2009, at 8:00 a.m. Eastern Standard Time to discuss the quarter's financial results and the operational update.

Call-in details are as follows:

        Toronto & International:  (647) 427-7450
        North America:            (888) 231-8191

Alange Energy is a Canadian-based oil and gas exploration and production company, with working interests in thirteen properties in four basins in Colombia. Further information can be obtained by visiting our website at

Forward-Looking Information

This news release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian securities laws concerning the business, operations and financial performance and condition of Alange Energy Corp. and may contain forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. Actual results may differ materially from those currently anticipated. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements are detailed from time to time in the Company's periodic reports filed with the British Columbia Securities Commission and other regulatory authorities. The Company has no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

    Neither 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 news release.

%SEDAR: 00005776E


For further information: For further information: Michael Davies, Chief Financial Officer, (416) 360-4653, ext. 224

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