Diaz Resources aims to amend 8.75% convertible unsecured debentures

Company intends to increase interest to 10.5%, reduce conversion price

By Devika Patel

Knoxville, Tenn., Jan. 18 - Diaz Resources Ltd. said it hopes to amend its 8.75% convertible unsecured subordinated debentures.

The company is seeking approval from holders of 66 2/3% of the debentures to increase the interest rate to 10.5%, effective Jan. 17 and reduce the conversion price to C$0.33333 per share from C$0.90 per share. It also wants to extend the maturity date to March 27, 2014 from March 27, 2012.

"The successful amendment to the debenture maturity date to March 27, 2014, will give the company a longer period and greater flexibility in developing its portfolio of heavy oil assets," company chairman Lamond said in a press release.

"Furthermore, I am pleased that discussions with representatives of approximately two-thirds of the debenture holders have been very positive and have resulted in their intention to sign the written resolution.

"Diaz now plans to focus on raising additional capital with which to proceed with an accelerated development drilling program of its Lloydminster heavy oil pool, which over the past six months has exhibited stable oil production rates. In addition, Diaz plans to drill development wells on three low risk heavy oil projects in the Lloydminster area, in the next six months," Lamond concluded in the release.

Diaz is an oil and gas exploration and production company based in Calgary, Alta.

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