Jadela Oil Corp. Annual Filings, Shareholder Update and Private Placement

Jadela Oil Corp. Annual Filings, Shareholder Update and Private Placement

Calgary, Alberta CANADA, May 03, 2012 /FSC/ - Jadela Oil Corp. (JOC - TSX Venture), ("Jadela") announces the filing of its audited annual consolidated financial statements for the year ended December 31, 2011, the corresponding Management's Discussion and Analysis dated April 30, 2012, and its disclosure and reports relating to reserves data and other oil and gas information as required by the Canadian Securities Administrators National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.  An electronic copy of these documents may be obtained on Jadela's SEDAR profile at www.sedar.com. To the extent investors do not have access to the internet; copies of the materials can be obtained on request without charge by contacting Jadela.

Status of Texas Assets

As previously reported by Jadela on November 21, 2011,  the El Indio #1H short lateral horizontal well that was drilled by Jadela in Maverick County, Texas targeting the light oil bearing Eagle Ford formation, experienced a number of significant completion and post completion problems. Based on preliminary results, it appeared as though remedial efforts were successful, however based on further testing the breaker was only successful in clearing near wellbore emulsion and further remedial work will be required.  While the present lack of commercial success of its El Indio #1H well is disappointing, Jadela is of the view that the initial and encouraging production results achieved prior to the creation of the emulsion by the coil tubing chemical, confirm Jadela's seismic and core interpretation and has substantially de-risked the Eagle Ford play over Jadela's acreage.  The Lower Eagle Ford is over 180 feet thick and the Upper Eagle Ford formation is over 300 feet thick.  Jadela believes, based on seismic and the core results of the El Indio #1H, that the Lower Eagle Ford is at a consistent depth, oil bearing and is present throughout the leased and optioned acreage.  Typical development would likely result in downspacing to 4-8 horizontal wells per section resulting in 100-200 drilling locations, respectively, on Jadela's lands.  

Crossfield, Alberta Well

On January 10, 2012, Jadela announced that it had entered into an agreement to farmout its 35% working interest in the oil and gas mineral rights to the Viking formation under Section 29-30-3W5M near Crossfield, Alberta.  The farmee has drilled a horizontal well (approximately 3,500 foot lateral) and has completed the well on or about April 3, 2012 using gelled liquid propane. The well has been on pump since mid April and the farmee has tied-in production to the Alta Gas processing facilities located in Section 27-31-4W5M.  Production details are not being released at this time.


Sale of 8.281% of Ft. Nelson Disposal Well

In April 2012, Jadela entered into an agreement with Cancen Oil Processors BC Ltd. ("Cancen BC") pursuant to which Jadela agreed to sell an 8.281% working interest in the disposal well facilities in Ft. Nelson, British Columbia. The effective date for the sale is December 31, 2011.  Prior to the sale, Jadela had owned a 30.281% working interest and Cancen BC had owned a 69.719% working interest. Cancen BC is the operator of the disposal facilities. The consideration payable to Jadela is $296,868 plus GST which was offset by approximately $260,000 in debts owing by Jadela to Cancen BC for its proportionate share of capital improvements and operating losses for 2010 and 2011.  Jadela now retains a 22% working interest in the disposal well facilities.  

Private Placement and Share Issuance for Option Consideration

Jadela also announces that, subject to the approval of the TSX Venture Exchange, Jadela intends to proceed with a non-brokered private placement of up to 5,000,000 units at a price of $0.20 per unit for gross proceeds of up to $1,000,000.  Each unit shall consist of one common share of Jadela and one common share purchase warrant.  Each warrant will entitle the holder to purchase one common share of Jadela at a price of $0.30 per common share at any time within two years of the date of issuance of the warrant.   In connection with this financing, Jadela will pay cash finder's fees equal to 8% of the funds raised to eligible finders who introduce subscribers to the private placement and issue one finder's warrant for every 10 units issued to eligible subscribers.  Each finder's warrant will be issued to finders on the same terms as the warrants comprising the units.

On or about June 21, 2011, Jadela Oil (US) Operating LLC, a wholly owned subsidiary of Jadela, entered into a sub-option agreement pursuant to which it has a right to pay the sum of approximately US$900,000 for an option to lease 3,000 net acres, exercisable on or before November 30, 2012 for lease bonus consideration of US$700 per net acre. Jadela is seeking regulatory approval for the issuance of 3,600,000 common shares at a deemed issuance price of $0.25 per common share to satisfy this option consideration to pay arm's length mineral owners to acquire the oil and gas mineral rights.  Formal agreements with the mineral owners are being negotiated.  

All of the securities issued under the private placement or to mineral owners will be subject to a four month resale restriction.

About Jadela

Jadela is a junior oil and gas exploration company.  For additional details, please visit Jadela's website at www.jadelaoil.com
  
For further information, please contact:

Gregory J. Leia, President and CEO
Jadela Oil Corp.
Suite 1550 - 777 - 8th Street SW
Calgary Alberta  T2P 3R5
T: (403) 265-7544
E: gleia@jadelaoil.com
Website: www.jadelaoil.com



Reader Advisory

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur.  In particular, forward-looking information in this press release includes, but is not limited to, statements with respect to Jadela's exploration activities on its Texas assets, the terms, timing and completion of the private placement, the issuance of common shares to satisfy option consideration and related matters.  Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.

Forward-looking information is based on the opinions and estimates of management at the date the statements are made and are founded on the basis of expectations and assumptions made by the Company.  Such forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information.  Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: general economic conditions in Canada, the United States and globally; industry conditions, including fluctuations in the prices of oil and natural gas; governmental regulation of the oil and gas industry, including environmental regulation; unanticipated operating events or performance which can reduce production or cause production to be shut in or delayed; failure to obtain industry partner and other third party consents and approvals, if and when required; competition for and/or inability to retain drilling rigs and other services; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; competition for, among other things, capital, acquisitions of reserves, undeveloped lands, skilled personnel and supplies; incorrect assessments of the value of acquisitions; geological, technical, drilling, processing and transportation problems; changes in tax laws and incentive programs relating to the oil and gas industry; failure to realize the anticipated benefits of acquisitions and dispositions; and other factors.  Readers are cautioned that this list of risk factors should not be construed as exhaustive.  

The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation.  Readers are cautioned not to place undue reliance on forward-looking information.

This press release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein.  The securities have not been and will not be registered under the U.S. Securities Act, or any state securities laws and may not be offered or sold within the United States or to "U.S. persons" (as such term is defined in Regulation S promulgated under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

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 release.



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Source: Jadela Oil Corp. (TSXV: JOC)
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