DIAZ ANNOUNCES THIRD QUARTER 2010 RESULTS

CALGARY, Nov. 16 /CNW/ - Diaz Resources Ltd. (TSX: DZR) announces that it has filed its Interim Report for the nine months ended September 30, 2010.

Highlights

Diaz management has focused for the last two years on expanding its oil production.  As of the third quarter, we are pleased to report that Diaz oil revenues exceeded natural gas revenues in Canada for the first quarter ever.  This resulted from the addition of three new wells at the Company's Lloydminster field late in the second quarter, combined with the shut-in of several natural gas wells that had marginal economics during the low summer gas price season.  The gas wells will be brought back onto production when gas prices increase as we move into the winter heating season.

Diaz plans to continue development drilling at its Lloydminster heavy oil pool while continuing to build an inventory of acreage, prospective for heavy oil accumulations in Alberta and Saskatchewan.

Late in the quarter, Diaz acquired a 45% interest in a property at Macklin, Saskatchewan.  The property contains four shut-in oil wells, a water disposal well, 3-D seismic over the lease area, and 3,770 acres under lease.  Diaz believes the property's four wells can be reactivated.  The wells were producing a combined 58 bopd when they were shut-in.  The Company plans to reactivate the first well before the end of the year.

Exploration and Development

To date, Diaz has acquired oil and gas leases on five prospects in Alberta (5,080 gross acres, 3,018 net acres) and seven prospects in Saskatchewan (18,262 gross acres, 10,661 net acres) for a total inventory of ten heavy oil projects and two medium/light oil projects.  The primary pay zones are Lloydminster and Dina in Alberta and the Shaunavon and Birdbear zones in Saskatchewan.

Financial

Revenue for the third quarter ended September 30, 2010 increased to $1.6 million compared with $1.2 million for Q3 2009.  Cash flow from operations for the third quarter of 2010 increased to $409,000 or nil per share compared with $86,000 or nil per share for Q3 2009.  Diaz reported a loss for the third quarter of $1.1 million or ($0.01) per share versus a loss of $1.1 million or ($0.01) per share in Q3 2009. 

For the nine month period, revenue decreased to $4.9 million compared with $5.4 million for the prior year period.  Cash flow from operations for the nine month period decreased to $1.1 million or $0.01 per share compared with $1.5 million or $0.02 per share for the prior year period.  Diaz reported a loss for the nine month period of $3.7 million or ($0.04) per share versus a loss of $11.4 million or ($0.17) per share in the prior year period.  The Company took an impairment write down during the prior year period of $11.4 million. 

Net capital expenditures for the third quarter of 2010 totaled $776,000 compared with a net disposition of $451,000 in the prior year quarter. Capital expenditures during the quarter were financed with cash flow from operations, working capital, and an increase in net debt.

Outlook

Diaz expects oil prices to hold above $75 per barrel (WTI) during the last quarter of 2010 and into the 2011 year as industrial activity in North America slowly recovers. 

Due to current high natural gas storage levels and significant volumes of gas being developed on North American shale gas projects there is still considerable uncertainty as to when natural gas prices will improve.  To mitigate the uncertainty in natural gas prices, Diaz has put in place fixed gas price contracts for approximately two thirds of the Company's Q4 2010 gas production, at prices in excess of $6.63 per Mcf.

The Company will continue to focus on its Lloydminster heavy oil development program and if successful, Diaz should exit 2010 with almost half of its production derived from oil. 

Corporate Summary

(Thousands, except shares and per share amounts)				Nine Months Ended
				Sept 30
				2010	2009
Financial
	Revenue (net of royalty expense)			$              4,933	$              5,405
	Cash flow from operations *			1,127	1,522
		per share, diluted		0.01	0.02
	Loss for the period			(3,702)	(11,443)
		per share, diluted		(0.04)	(0.17)
		Capital additions		3,585	2,139
		Dispositions		346	1,944
	Net capital additions			3,239	195
	Net current debt			6,714	7,218
	Convertible debentures**			6,604	6,304
	Total assets			34,722	37,725
	Total shares outstanding at period end			85,903	67,178
Operations
	Production
		Gas (MMcfd)		2.4	3.5
		Oil (Bopd)		122	98
		BOEd (6 Mcf = 1 Bbl)		519	680
	Product Prices
		Gas ($/Mcf)		$4.79	$4.65
		Oil ($/Bbl)		$62.25	$53.13

* Non-GAAP measure.  Please see the reconciliation of "cash flow from operations" to "cash flow from operating activities" after the shareholders message.

** Convertible debentures have a face value of $7.1 million and mature on March 26, 2012.  See Note 7, "Convertible Debentures", in the notes to the financial statements for the nine months ended September 30, 2010.

Diaz is an oil and gas exploration and production company based in Calgary, Alberta.  Diaz's current focus is on oil development and exploration in Alberta and Saskatchewan.

ADVISORY: This press release contains forward looking statements. Although Diaz believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because Diaz can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties.

Where amounts are expressed on a barrel of oil equivalent (boe) basis, natural gas volumes have been converted to barrels of oil at six thousand cubic feet (mcf) per barrel (bbl).  Boe figures may be misleading, particularly if used in isolation.  A boe conversion of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.  References to oil in this discussion include crude oil and natural gas liquids (NGLs).

The forward looking statements contained in this press release are made as of the date hereof and Diaz undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

NEITHER THE TORONTO STOCK EXCHANGE NOR ITS REGULATION SERVICES PROVIDER
(AS THAT TERM IS DEFINED IN THE POLICIES OF THE TORONTO STOCK EXCHANGE)
ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

For further information:

Robert W. Lamond, Chairman  - or - Donald K. Clark, Chief Operating Officer
DIAZ RESOURCES LTD.
Telephone:  [phone]
Fax:  [phone]
Website:  www.diazresources.com
Email:  [email protected]
TSX:  DZR