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Last updated on April 18, 2014 at 17:24 EDT

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

March 14, 2012

CALGARY, March 14, 2012 /PRNewswire/ – Shona Energy Company, Inc. (TSXV: SHO)
(“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.

SOURCE Shona Energy Company, Inc.


Source: PR Newswire