Alange Energy Provides Update on Internal Review Process Including Recapitalization and Restructuring of the Company and Announces a C$50 Million Bought Deal Equity Financing

TORONTO, ONTARIO--(Marketwire - Jan. 19, 2011) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Alange Energy Corp (TSX VENTURE:ALE) ("Alange Energy" or the "Company") today announced a number of actions being taken as a result of the previously announced internal review process that was initiated with the sole objective of re-establishing investor confidence in the Company's operations, disclosure and future prospects. In addition, the review process included a full analysis of the strategic opportunities available, including development of the Company's portfolio of core assets, joint ventures and the sale of non-core assets.

The actions announced today by the Company as a result of the internal review process include:

• Commencement of management restructuring;
• Recapitalization of the balance sheet with a C$50.1 million bought deal prospectus offering of units to repay approximately US$22 million of bank debt and to provide funding for exploration and development of the Company's core assets in 2011;
• Focus on Alange Energy's core oil assets: Cubiro, La Punta, Topoyaco, Santa Cruz;
• Transfer of control of operatorship of Topoyaco to Pacific Rubiales Energy Corp. to leverage Pacific Rubiales' technical expertise in Colombia and its financial capacity to operate the joint venture;
• Immediate 40% decrease in ongoing G&A through a staff reduction of 8 senior managers and 19 technical consultants in Colombia; and
• Dispose or farm out of non-core assets: gas assets and Las Quinchas heavy oil interest.

The Company announced today that Mr. Luis Giusti Sr. has stepped down as Chief Executive Officer and will remain on the board to provide his support to this process. The board will also ensure it has the resources available to oversee the execution of the strategic plan that is being implemented under new leadership and a new management team. To this effect, the Executive Committee of the board of directors (consisting of the independent members of the board) has authorized the delegation of authority to Mr. Gregg Vernon, Interim Chief Operating Officer, while it conducts a search for a new Chief Executive Officer. In addition, the Executive Committee has hired two experienced oil and gas industry consultants to support the implementation of the strategic plan initiatives. Mr. Luciano Biondi Golinucci, a graduate of the Universidad del Zulia with a B.Sc. in petroleum engineering with 42 years of extensive experience in all facets of the business, in particular the production and drilling operations in all manner of fields, will focus on improvements to increase production from the Company's core assets. The Executive Committee has also retained the services of Mr. Francisco Bustillos, an executive with over 30 years of financial and management experience in the oil industry. Working closely with Michael Davies, the Company's Chief Financial Officer, Mr. Bustillos will lead the implementation of improved internal controls, processes and management systems in Alange Energy's Colombian operations.

During 2010, previous management made use of debt facilities and accounts payable factoring to fund its exploration and development program. The Company's debt position (current and long-term) currently stands at approximately US$47 million and the Company will require approximately US$27 million in the coming year to meet its debt service obligations. Although cash flow generated from the Company's share of the current production of approximately 2,400 barrels oil equivalent per day ("boed"), before deduction of royalties, is expected to be able to fund these debt service obligations and ongoing general and administrative expenses ("G&A"), any remaining internally generated cash flows will not be sufficient to fund all of the Company's exploration commitments and capital programs essential to realize the potential of Alange Energy's core assets. The internal review process has identified a number of areas that must be addressed to put the Company on a solid financial foundation to create shareholder value.

The Company announced today that it has entered into an agreement with a syndicate of underwriters led by GMP Securities L.P. (the "Underwriters") whereby the Underwriters have agreed to acquire on a bought deal basis 167,000,000 units (the "Units") at a price of C$0.30 per Unit for cash proceeds of C$50,100,000. Each Unit will consist of one common share and one-half of one common share purchase warrant of the Company. Each full warrant will entitle the holder to purchase an additional common share of the Company at an exercise price of C$0.50 for a term of 5 years from the closing date of the offering. In addition, the Company will issue Units equal to 6% of the Units sold pursuant to the offering to the Underwriters in settlement of their underwriting commission. In connection with the bought deal financing, the Company has granted the Underwriters an option, exercisable for a period of up to 30 days following the closing of the offering, to purchase additional Units equal to 15% of the number of Units sold pursuant to the offering to cover over-allotments, if any, and for market stabilization purposes. The offering is expected to close on or about February 10, 2011 and is subject to the Company receiving all necessary regulatory approvals.

The estimated amount of sources and uses of the proceeds from the offering are as follows:

Source of funds:
Net proceeds of the offering	US$50.1 million 1
Uses of funds:
Transaction costs
Agent commission	Nil 2
Other estimated costs	US$0.5 million
Repayment of debt
14% term loans due April 2012 3	US$3.9 million
Term loans due May to December 2013 3	US$18.1 million
2011 exploration commitments
Topoyaco	US$6.0 million
Santa Cruz	US$12.5 million
La Punta	US$6.0 million
Available to fund working capital requirements	US$3.1 million
Total uses of funds	US$50.1 million

 Notes:

1. US funds calculated based on the closing exchange rate on January 18, 2011 of US$1.00 = C$1.00.
2. The agent will receive 6% of the number of units issued pursuant to the offering in lieu of a cash commission.
3. Represents the outstanding principal amount and accrued interest (and penalties, if any) under the loan facility agreements.

Repayment of the term loans with a portion of the proceeds of the offering will give the Company immediate access to approximately US$1.0 million per month of its internally generated cash flow from operations to reinvest in the development of its core assets.

The Company has also completed a thorough review of its corporate and operational infrastructure to identify and implement meaningful cost savings measures to increase operating cash flow. Through the first nine months of 2010, general and administrative expenses ("G&A") amounted to US$13.5 million. This included US$2.8 million of costs related to an acquisition transaction that was not completed, financing fees related to the debt financing and other non-recurring items. Excluding these items, ongoing G&A averaged approximately US$1.2 million per month or US$16 per barrel produced, well in excess of industry comparables. As part of this review, management has already taken action to reduce ongoing G&A by 40%, effective immediately, through a staff reduction of eight senior managers and 19 technical consultants in Colombia. While additional costs savings measures are being considered, the actions taken to-date will immediately increase operating cash flow by approximately US$0.5 million per month. 

Through the analysis completed as part of the internal review process, the Company made a distinction between core and non-core assets in its portfolio. Presently, approximately 90% of Alange Energy's production is sourced from its oil interests in the Llanos Basin, specifically Cubiro and La Punta. These producing properties currently generate almost 100% of the Company's cash flow from its operations and will continue to be among its core assets. The Company will leverage the significant development activity undertaken at Cubiro in 2010 and the successful completion of the La Punta 3 well in June 2010 to generate sustainable operating cash flows in 2011. Continued exploration work in Blocks B and C of Cubiro together with the Company's commitment to two exploration wells at La Punta will provide a foundation for production growth in 2011 in the Llanos Basin. 

In 2010, the Company commenced its exploration program at another of its core assets, the Topoyaco property, a large block of more than 60,000 hectares, which has shown several potential prospects in the foothills of the Andes Mountain chain. Alange Energy holds a 50% working interest in Topoyaco and currently controls the operatorship, partnering with Pacific Rubiales, which holds the remaining 50% working interest. In December 2010, Alange Energy announced that it had confirmed a heavy oil discovery in the Topoyaco-2 exploration well in Prospect C and that the Company was initiating testing with an electro-submersible pump in the Topoyaco-1 exploration well in Prospect B. In 2011, exploration activities will continue with the drilling of a new well in Prospect D, the most important objective of the block. Given the importance of the next phase of the Topoyaco exploration program, the Company has agreed to transfer control of the operatorship of the block to Pacific Rubiales to leverage Pacific Rubiales' extensive technical capabilities in Colombia and its financial capacity to operate the joint venture.

The strategic plan also affirms the Company's commitment to its 100%-owned Santa Cruz property following the acquisition of 60 km² of 3D seismic in the fourth quarter of 2010. In 2011, the Company will drill an exploratory well, at an estimated capital cost of US$12.5 million, to meet its Phase 3 commitment with Colombia's National Hydrocarbons Agency ("ANH") due by May 2011.

In June and July 2010, the Company had announced it had successfully been awarded a total of five new blocks during the 2010 Open Round conducted by the ANH. Through the internal review process, it became evident that the Company is still in the process of finalizing the block awards with the ANH, for which it will be the operator. In 2010, the Company entered into an agreement with a third party to fund 100% of the phase 1 exploration commitments to earn a 90% interest in the blocks. At the end of phase 1, the Company has an option to increase its participation to 20%.

The Company has identified several non-core assets in its portfolio, including the Las Quinchas heavy oil property and certain gas assets. Transactions are already underway to dispose of certain non-core assets. The Company will continue to seek other opportunities in the near term to dispose or farm out the remainder of its non-core assets. These transactions are expected to provide additional funds to reinvest in the Company's core assets and to reduce accounts payable related to its 2010 exploration and development campaign. Announcements will be made once transactions are formalized.

With the internal review process still ongoing, the Company is not providing guidance at this time on production growth or capital spending. A full report will be provided on conclusion of the internal review process, expected to be completed in the next four to six weeks.

This news release is not an offer of securities for sale in the United States. The securities described in this press release have not and will not be registered under the U.S. Securities Act of 1933, and may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933 or an applicable exemption from the registration requirements thereof.

About Alange Energy Corp.

Alange Energy is a Canadian-based oil and gas exploration and production company, with working interests in 12 properties in four basins in Colombia. Further information can be obtained by visiting our website at www.alangeenergy.com.

All monetary amounts in U.S. dollars unless otherwise stated. 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. Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to estimated production and reserve life of the various oil and gas projects of Alange Energy; the estimation of oil and gas reserves; the realization of oil and gas reserve estimates; the timing and amount of estimated production; costs of production; success of exploration activities; currency exchange rate fluctuations; the use of proceeds of the proposed financing; the anticipated results of the implementation of the Company's strategic plans and operational decisions, including its decisions to focus on certain core properties, transfer operatorship of Topoyaco to Pacific Rubiales Energy Corp., decrease G&A and dispose or farm-out certain non-core assets; Alange Energy's debt levels and expectations to meet its debt service levels; the amount of royalties; the effect of cost saving measures on the Company's cash flow; expectations regarding sufficiency of operating cash flows; and the timing for reporting results of the review of the Company's internal controls and procedures, management systems and corporate governance practices.

Except for statements of historical fact relating to the Company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are 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. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of Alange Energy and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions, risks relating to international operations, fluctuating oil and gas prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes, other risks of the oil and gas industry, failure of plant, equipment or processes to operate as anticipated; the ability of Alange Energy to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of drilling, completion, pipeline, storage and facility construction and expansion; the regulatory framework regarding royalties, taxes and environmental matters; the ability of Alange Energy to successfully market its oil and natural gas products. and completion of the review of internal controls and procedures, management systems and corporate governance practices. Although Alange Energy has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Alange Energy undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

Statements concerning oil and gas reserve estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the oil and gas that will be encountered if the property is developed. Information in this press release expressed in boe is derived by converting natural gas to oil in the ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Estimated values of future net revenue disclosed do not represent fair market value.