SINTANA ENERGY INC. AND COLCAN ENERGY CORP. ANNOUNCE PROPOSED BUSINESS COMBINATION

March 13, 2012

Sintana Energy Inc. has entered into a definitive agreement dated as of March 12, 2012, providing for a business combination of the two companies. ColCan is a private company existing under the laws of Ontario which is engaged in the acquisition, exploration and development of oil and gas properties in Colombia. Sintana is engaged in the acquisition, exploration and development of oil and gas properties in Latin America. The business combination is subject to the satisfaction or waiver of certain customary closing conditions, and is currently expected to be completed in the second quarter of 2012. The principal purpose of the business combination is to combine the oil and gas assets presently held by Sintana with those owned or in the process of being acquired by ColCan in Colombia. Thus, it is expected that ColCan will provide the combined entity with working interests in four blocks -- three blocks in Colombia's Middle Magdalena basin (VMM) and one block in the Llanos basin (LLA): VMM-4, VMM-15, VMM-37 and LLA-18. Sintana will provide the combined entity with working interests in four blocks -- three in Colombia's Upper Magdalena basin (Talora, Cor-11 and Cor-39) and one in Peru's Sechura basin (XXVII).

The technical growth strategy

The addition of the above-noted blocks pursuant to the business combination is consistent with Sintana's growth strategy which consists of acquiring blocks and/or working interests in such blocks that: (1) are located in proven oil-prone basins; (2) have prospects that have been previously overlooked or undervalued for specific technical reasons; (3) are in close proximity to infrastructure or the local market; and (4) where possible, have both conventional and unconventional liquid hydrocarbon potential. ColCan's participation in the three VMM blocks will establish Sintana's strategic position in the VMM basin and will provide both conventional and unconventional resource potential. ColCan's interest in LLA-18 will mark Sintana's entry into Colombia's most prolific oil and gas producing basin. The business combination will more than double Sintana's Colombian land position, increasing its gross acreage holdings in Colombia from 331,000 acres to nearly 700,000 acres. Total gross acreage of the combined entity, including in Peru, will be close to 875,000 acres. Working interests for the eight blocks to be held by the combined entity range from 25 per cent to 100 per cent.

In addition to Sintana's Upper Magdalena Valley exploration strategy with respect to its current blocks, the proposed business combination would help to further Sintana's desire for exposure in the VMM basin, which is the oldest oil and gas producing basin in Colombia, dating back to the 1918 discovery of the giant La Cira-Infantas field complex (900 million barrels of oil). Historically, only the tertiary section (conventional reservoirs) of VMM has been systematically explored, and approximately two billion barrels of oil have been produced in VMM over the last century. Sintana sees considerable, additional conventional resource potential in the tertiary plays in ColCan's three VMM blocks.

Block VMM-37 was evaluated in a National Instrument 51-101 resource report by Petrotech Engineering which shows recoverable conventional resource estimates ranging from 14 million barrels of oil to 201 million barrels of oil.

Unconventional resources

Two of ColCan's blocks, VMM-37 and VMM-4, are located in the fairway of the most important industry development in Colombia in the past two years. There is a growing recognition of what appears to be a significant hydrocarbon potential in the unconventional resource plays in this area of Colombia. Preliminary regional resource estimates for the VMM basin are considerable, ranging from several billion to almost 40 billion barrels of oil recoverable (source: Colombian Agencia Nacional de Hidrocarburos & Universidad Nacional de Colombia, February, 2012). Industry activity in the area appears to be growing.

Sintana believes that block VMM-37 (100-per-cent working interest) has an excellent outlook for unconventional resources. VMM-4 (25-per-cent working interest) is also in the unconventional fairway. There are also other zones within the unconventional section of the VMM basin that, with additional exploration and data, could lead to a significant increase to this resource estimate.

Capital obligations

ColCan owns 100 per cent of the working interest in VMM-37. The official operator of the VMM-37 block is Patriot Energy Sucursal Colombia, a registered Colombian branch wholly owned indirectly by ColCan. Capital obligations with respect to VMM-37 include two wells and 150 kilometres of 3-D seismic over the next two years. ColCan owns a 25-per-cent working interest in its other three blocks, and the phase I capital requirements in respect of such blocks are carried by the operator.

Sintana's chief executive officer, Doug Manner, commented: "The four new assets involved in this merger provide Sintana with a significant advancement towards our strategic goals in the area. They enhance our prospect inventory and add tremendous reserve potential, both conventional and unconventional. The 25-per-cent carried interests in three of the blocks as well as the 100-per-cent working interest in VMM-37, which could be farmed out for additional capital carries, allows Sintana to significantly increase its drilling inventory with minimal additional capital required."

Further details of the business combination

The business combination will be structured in the form of a three-cornered amalgamation, pursuant to which a wholly owned subsidiary of Sintana would amalgamate with ColCan, and all of the issued and outstanding common shares of ColCan would be acquired by Sintana from the existing holders thereof in consideration of the issuance of 1.5 common shares of Sintana for each common share of ColCan issued and outstanding immediately prior to the closing of the business combination. The consideration for the business combination was calculated based upon a deemed price of 20 cents per Sintana share. The final structure of the business combination will be subject to receipt of appropriate legal, accounting, tax and financial advice.

ColCan was formed on Dec. 20, 2010. ColCan and Sintana are arm's-ength parties, and there are no current non-arm's-length parties of Sintana which are insiders of ColCan or presently hold any direct or indirect beneficial interest in either ColCan or any of its assets, other than Ronald MacMicken who serves as both a director of Sintana and as an officer of ColCan. There are no current control persons (as defined by the applicable regulations of the TSX Venture Exchange) of ColCan.

The business combination is also conditional upon a private placement being completed prior to closing by ColCan of subscription receipts convertible for no additional consideration into ColCan shares, to raise total gross proceeds of not less than $11-million. In connection with the business combination, it is proposed that Sintana would acquire the ColCan shares issued in the financing in exchange for equivalent securities of Sintana calculated based upon the exchange ratio.

It is a condition to the completion of the business combination that ColCan shall have redeemed, prior to closing, existing debentures of ColCan in a minimum total principal amount of $4.1-million, which redemption proceeds may be satisfied through the issuance of ColCan shares in lieu of cash payments. It is anticipated that immediately following the closing of the business combination (and without reference to the financing or the debenture conversion, and assuming that there are no other changes to the outstanding common shares or convertible securities of either company), a total of approximately 239,971,333 Sintana shares will be issued and outstanding, of which it is anticipated that 126,306,964 Sintana shares will be held by former ColCan shareholders and 113,664,369 Sintana shares will be held by existing Sintana shareholders. Furthermore, it is anticipated that a total of 60.47 million Sintana shares will be reserved for issuance pursuant to outstanding convertible securities upon the closing of the business combination, of which it is anticipated that 29.45 million Sintana shares will be issuable to current holders of stock options and share purchase warrants of Sintana, and 31.02 million Sintana shares will be issuable to current holders of stock options and share purchase warrants of ColCan. Based on the current shareholdings and present knowledge of each of ColCan and Sintana, it is anticipated that following the closing of the business combination, no person or company will beneficially own, directly or indirectly, or control or direct more than 10 per cent of the issued and outstanding common shares of Sintana.

Following the closing of the business combination, there will be no changes to the board of directors or management of Sintana, and the existing officers and directors of Sintana will continue in their present roles.

Completion of the business combination is subject to a number of conditions, including the approval of the TSX Venture Exchange and the receipt of all applicable shareholder approvals. The business combination cannot close until all required regulatory and shareholder approvals are obtained. There can be no assurance that the business combination will be completed as proposed or at all.

Three of ColCan's principal shareholders, as well as all of the directors and executive officers of ColCan, have entered into voting support agreements with Sintana pursuant to which the supporting shareholders have irrevocably agreed, subject to the terms thereof, to vote their shares in favour of the business combination. The supporting shareholders beneficially own or exercise control or direction over, collectively, approximately 47 per cent of the outstanding common shares of ColCan.

The board of directors of Sintana has unanimously approved (with one director having abstained from voting) the entering into of the master agreement and has determined that the business combination is in the best interests of Sintana and its shareholders, and unanimously recommends that shareholders vote in favour of the business combination. The recommendation of the board followed an extensive review and analysis of the proposed business combination. In addition, all of the directors and executive officers of Sintana have entered into voting support agreements with ColCan pursuant to which such directors and executive officers have irrevocably agreed, subject to the terms thereof, to vote their shares in favour of the business combination.

Cormark Securities Inc. is acting as financial adviser to ColCan in connection with the proposed business combination. Canaccord Genuity Corp. is acting as financial adviser to Sintana in connection with the proposed business combination and has provided the board of directors of Sintana with its verbal opinion that, subject to its review of the final form of documents effecting the business combination, the consideration to be offered by Sintana pursuant to the business combination is fair, from a financial point of view, to the shareholders of Sintana.

Delavaco Capital Inc. is also acting as strategic adviser to ColCan and Sintana with respect to the financing.

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