Shona Energy Company, Inc. Provides Operational Update

CALGARY, April 3, 2012 /CNW/ - Shona Energy Company, Inc. (SHO-TSX.V)("Shona" or the "Company"), today provided an operational update on its producing and exploration assets in Latin America.

"Our focus in 2012 will be on both gas marketing activities, designed to extract maximum value from our producing Colombian assets, and on business development initiatives that will provide the Company and shareholders with additional opportunities for growth," said James L. Payne, CEO of Shona Energy. "With positive cash flow being generated, and more than $20 million in cash on hand, we are well positioned to leverage management's expertise to identify additional regional and international opportunities to support the creation of long-term shareholder value."

Production and Cash Flow
Shona has current gas sales of 14 mmcf per day year under firm contract for 2012. This is expected to increase to 19 mmcf per day firm within two years. On this basis, after tax cash flow in 2012, before general and administrative expenses and capital, is expected to be approximately $19 million.

Increasing gas sales stand to have the most positive near-term impact on the Company's financial performance. The Esperanza Block in Colombia is a well-defined gas asset and is capable of producing an additional 10 mmcf per day without spending additional capital and approximately 30 mmcf per day by spending $15 million on development drilling. The Company is advancing an ongoing seismic program that will help determine additional supply capacity once it is completed in June. For every 10 mmcf per day of additional production, Shona would generate an additional $12 million of annual after-tax cash flow (at current sales prices).

The Company is currently evaluating an array of options with respect to the sale and marketing of additional capacity, which will be a key focus for the Company in 2012. Areas for further review include: local distribution markets, exercising contract options with the Company's current gas purchasers, gas-to-electricity, expansion of the gas transmission network near Esperanza, and Micro LNG/CNG facilities.

Esperanza Block, Colombia
Shona is currently conducting a 100 km² 3D seismic survey which is anticipated to further the Company's understanding of the remaining resource potential of the Esperanza concession.

Serrania Block, Colombia
Drilling on the Serrania Block has been postponed until late 2012 or early 2013 as a result of increased regional security concerns which are currently being addressed by the Colombian military.  Management continues to believe the Serrania block is a high impact opportunity for the Company and intends to resume drilling once regional security has stabilized.

Block 102, Peru
Shona is currently in the process of conducting a long-term production test on the Boa prospect in an effort to understand its potential. The test is expected to commence in May and once the Company has the data from that test, management expects to be able to make a decision with respect to next steps with the asset. A decision is expected in the third quarter of 2012.

Business Development Initiatives
Shona has taken steps to re-focus its business development initiatives following the completion of its first gas sales and the hiring of key new personnel. In an effort to maximize the value of these activities the Company has divided the program into functional areas that include:

• Further exploitation of the Esperanza Block;
• New ventures in South America;
• New ventures outside of South America; and
• Potential for mergers and acquisitions.

With areas of focus delineated, the Company will now move forward with the identification and review of additional opportunities to build value in the Company.

About Shona

Shona is an international oil and natural gas exploration, development and production company focusing on South America, specifically Colombia and Peru. The Company's assets currently include interests in the Company-operated Esperanza block located in Colombia's Lower Magdalena Basin, the non-operated Serrania, Los Picachos and Macaya Blocks in Colombia's Caguan Basin, and the non-operated Block 102 in Peru's Maranon Basin. The common shares of the Company trade on the TSX Venture Exchange under the stock symbol "SHO". More information on the Company is available at www.shonaenergy.com.

Cautionary Statements

Certain information included in this press release constitutes forward-looking information under applicable securities legislation.  Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, expectations regarding future oil and gas production from the Company's properties, the production capacity of the Company's properties, the anticipated use of seismic data and exploration and development plans on properties in which the Company holds an interest.  Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect.  Although Shona believes that the expectations reflected in such forward-looking information is reasonable, undue reliance should not be placed on forward-looking information because Shona can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things: the ability of Shona to complete transactions described in this press release, the timely receipt of any required regulatory approvals, the performance of existing wells and success obtained in drilling new wells, anticipated expenses, cash flow and capital expenditures, the application of regulatory and royalty regimes and prevailing commodity prices and economic conditions.  Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. Shona undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, unless required by law. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.

All dollar references in this press release are to U.S. Dollars.

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 press release.

For further information please contact either of the following individuals:

David Gian, Treasurer & Investor Relations
Shona Energy Company, Inc.
Houston, Texas
713-622-8809     

Shetal Mentlewski, VP Admin & Legal
Shona Energy Company, Inc.
Houston, Texas
 713-622-8809