TORONTO, ONTARIO--(Marketwire – Oct. 5, 2009) - Quetzal Energy Inc. (TSX VENTURE:QEI)("Quetzal"), is pleased to announce that it has entered into several assignment agreements with private company, Fenix Energy Inc. ("Fenix"), to acquire 50% of Fenix's interests in three blocks in the Llano Basin, Colombia. Brownstone Ventures Inc. (TSX VENTURE:BWN)("Brownstone") will acquire the remaining 50% of Fenix's interest, such that Quetzal and Brownstone will acquire 100% of Fenix's interests (the "Fenix Interests").

The Fenix Interests comprise interests in three blocks in the Llanos basin, Colombia, being blocks 21, 27 and 36 (the "Blocks"). Pursuant to the assignment agreements entered into with Quetzal and Brownstone, Fenix has assigned its interests in three letter agreements as follows:

• Rights to acquire 28% of Llanos Block 36 with NCT Energy Group C.A. Colombia ("NCT");
• Rights to acquire 68.5% of Llanos Block 27 with NCT; and
• Rights to acquire 70% of Llanos Block 21 with Omega Energy ("Omega")

All three of the Blocks were recently awarded by the Agencia Nacional de Hidrocarburos ("ANH") to MONTECZ, NCT and Omega, respectively.

About the Interests

Quetzal and Brownstone, as to 50% each, can earn an interest in each of the Blocks by paying 100% (total) of the work commitments associated with the Blocks over the next 36 months. Quetzal and Brownstone will also be entitled to recover all costs paid on behalf of NCT and Omega, for work commitments and investments in respect of each block.

On Llanos Block 36 Quetzal and Brownstone will pay all costs attributed to 40% of the block until payout, and will be entitled to 36.4% of the net revenue until cost recovery, following which the parties will assume their working interests being Quetzal 14%, Brownstone 14%, MONTECZ 60% and NCT 12%.

On Llanos Block 27 Quetzal and Brownstone will pay all costs attributed to 100% of the block until payout, and will be entitled to 90.55% of the net revenue until cost recovery, following which the parties will assume their working interests being Quetzal 34.25%, Brownstone 34.25%, MONTECZ 19.5% and NCT 12%.

On Llanos Block 21 Quetzal and Brownstone will pay all costs attributed to 100% of the block until payout, and will be entitled to 91% of the net revenue until cost recovery, following which the parties will assume their working interests being Quetzal 35%, Brownstone 35%, Omega 30%.

Llano 27 block totals 16,470 hectares and it is surrounded by producing oil and gas fields (including La Punta, Entrerrios, Santiago and Estero), and is on strike with the La Punta Block 2244 oil field which has historic production of over 3.7 MMBO and total recoverable field reserves estimated between 6-9 MMBO and July 2009 production rate in excess of 3,600 BOPD of 34 degree API oil from 2 wells (Ministerio de Minas Y Energia, Forma 9). Work commitments over the first 36 month phase total approximately US$6.48m and includes completion of 144km of 2D seismic and the and drilling of an exploratory well.

Llanos 36 block totals 33,356 hectares and it is also offset by producing fields (including Chichimene, Apiay and Castilla) and oil and gas infrastructure, including pipelines and roads. Work commitments of the first 36 month phase total US$5.5m and includes completion of 93km of 2D seismic and the drilling of an exploratory well.

Llanos 21 Block totals 7,108 hectares and is offset by several oil fields. Work commitments of the first 36 month phase total approximately US$7m and includes 20 km of 2D seismic and 50 square km of 3D seismic and the drilling of 2 exploratory wells.

To acquire its 50% interest, Quetzal will:

• In respect of NCT 28% interest in Llanos 36, Quetzal will issue 2,000,000 shares to Fenix
• In respect of NCT 68.5% interest in Llanos 27, Quetzal will issue 3,000,000 shares to Fenix
• In respect of Omega 70% interest in Llanos 21, Quetzal will issue 5,000,000 shares and pay US$200,000 cash to Fenix

The assignment agreements and the transactions contemplated are subject to a completion of formal documentation, approval of the Board of Directors and approval of the TSX Venture Exchange.

Appointments

Quetzal management is also pleased to announce the appointment of Mr. Gerry Feldman C.A. as a director of the company effective October 5, 2009. Mr. Feldman is a partner of Schwartz Levitsky Feldman LLP, Chartered Accountants. The firm provides a full range of professional services including but not limited to auditing and accounting, corporate and personal tax planning, management advisory services and business investigations. The firm specializes in audits of brokerage houses, public companies, Investment Councilor and Limited Market Dealers, Mutual Fund Dealers and Mutual Funds. He will head the audit committee of Quetzal. The appointment of Mr. Feldman remains subject to TSX Venture Exchange approval.

Quetzal is also pleased to announce the appointment of Wally Rudensky as Chief Financial Officer of Quetzal, effective as of October 5, 2009. Mr. Rudensky, CA, has over 25 years experience in public accounting as partner at EvansMartin LLP Chartered Accountants in Toronto and previously with Arthur Anderson (now Deloitte). He is President of DFF Management Inc., a private company providing financial management and governance services to Canadian and U.S. listed companies. He has extensive experience in taxation and finance with particular attention to corporate reorganizations in the domestic and international markets, including expertise in Colombia. The appointment of Mr. Rudensky remains subject to TSX Venture Exchange approval. At this time, Quetzal also wishes to extend its appreciation and thanks to Ms. Dewar, the outgoing Chief Financial Officer of Quetzal.

Financing

Quetzal also announced that it is offering up to 60,000,000 units of the Company ("Units") at a price of $0.125 per Unit, for gross proceeds of up to $7,500,000 (the "Offering"). Each Unit will consist of one common share in the capital of Quetzal and one common share purchase warrant of Quetzal (a "Warrant"). Each Warrant will entitle the holder to acquire one additional common share of Quetzal at any time within 24 months after the closing date of the financing at an exercise price of $0.20 per share.

The Company may pay finder's fees of up to 7% cash plus up to 8% in compensation options (the "Compensation Option") for funds raised by eligible finders. Each Compensation Option will entitle the finder to purchase one common share of the Company at a price of $0.125 for twenty-four (24) months from Closing, subject to approval from the TSX Venture Exchange. Insiders of the Company may subscribe for up to 10% of the total proposed Offering.

Closing of the Offering is subject to receipt of all necessary regulatory approvals, including approval of the TSX Venture Exchange, and subject to completion of the acquisition by Quetzal of the Fenix Interests. The securities issued will have a hold period expiring four months and one day from the date of closing. Proceeds from the sale of the Units will be used for funding Quetzal's activities in Colombia further to its acquisition of the Fenix Interests, as well as to partially fund its activities in Guatemala and for general corporate purposes.

Forward Looking Statements – Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Brownstone and Quetzal, including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with oil and gas activities, currency fluctuations, dependence upon regulatory approvals, the availability of future financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.