Quetzal Energy Ltd. Completes $8.2 Million Private Placement Equity Financing

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

TORONTO, March 18 /CNW/ - Quetzal Energy Ltd. (TSX VENTURE:QEI) ("Quetzal" or the "Company") is pleased to announce that it has closed its previously announced private placement with a syndicate led by Canaccord Financial Ltd. and including Clarus Securities Inc. (the "Agents"). The Company issued a total of approximately 58.8 million units (the "Units") at a price of $0.14 per Unit (the "Offering") for aggregate gross proceeds of approximately $8.2 million. Each Unit consists of one common share ("Common Share") and one common share purchase warrant (the "Warrant"). Each whole Warrant entitles the holder to acquire one common share of the Company at a price of $0.20 for the period ending October 26, 2011.

Pursuant to the terms of the agency agreement between the Company and the Agents, the Agents received a number of Units equal to 7.0% of the gross proceeds of the offering at a deemed issue price of $0.14 per such Unit. The Agents also received broker warrants ("Broker Warrants") equal to 7.0% of the number of Units sold in the Offering. Each Broker Warrant will entitle the holder to acquire one Common Share of the Company at a price of $0.14 until October 26, 2011.

The net proceeds of the Offering will be used to fund Quetzal's exploration and development activities and for general corporate purposes.

Operational update;

Colombia;

All parties have signed the participation agreement on Canaguaro subject to ANH extension approval. The operator is commencing rig acquisition and civil work activities on the planned drilling location. It is anticipated that the Canaguay No.1 well will spud in the second quarter of 2010 and drill to a planned target depth of 15,500 feet. Two 3-D seismic programs have been designed and field work is currently mobilizing at Block LL-21 and LL-27. It is expected that seismic acquisition will be completed by the end of second quarter of 2010, with processing and interpretation in the third quarter of 2010 with a possible drilling program in the fourth quarter of 2010.

Guatemala;

At Atzam No.3A the Company set 13 3/8 inch casing at 1,080 feet and is currently waiting on cement and location modifications. It is anticipated that drilling will be completed in early April, 2010. Negotiations continue on the 1-2005 (Tortugas) Block to gain access and begin reactivation of two suspended wells in the second quarter of 2010.

The Common Shares and the Warrants offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from such registration. This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States nor shall there be any offer or sale of securities in any jurisdiction where such offer, solicitation or sale would be unlawful.

Cautionary Statements

This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws (together, "forward-looking information"). The use of any of the words "expect", "anticipate", "continue", "estimate", "believe", "plans", "intends", "confident", "may", "objective", "ongoing", "will", "should", "project", "should" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the foregoing, this news release contains forward-looking information concerning the use of proceeds of the recently completed offering of units of the Corporation.

The forward-looking information are based on certain key expectations and assumptions made by Quetzal, including expectations and assumptions concerning the use proceeds of the Offering and operational results in Colombia and Guatemala. Although Quetzal believes that the expectations and assumptions on which the forward-looking information are based are reasonable, undue reliance should not be placed on the forward-looking information because Quetzal can give no assurance that they will prove to be correct.

Since forward-looking information addresses future events and conditions, by its very nature it involves inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the inherent risks involved in the exploration and development of oil and gas properties, the uncertainties involved in interpreting drilling results and other geological data, uncertainties relating to fluctuating oil and gas prices, the possibility of cost overruns or unanticipated costs and expenses and other factors including unforeseen delays. Anticipated exploration and development plans relating to Quetzal's properties are subject to change.

The foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking information contained in this press release is made as of the date hereof and Quetzal undertakes no obligation 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 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.

For further information: Quetzal Energy Ltd., Robert Szczuczko, Chief Executive Officer, [phone], [email protected], www.quetzalenergy.com