Quetzal Energy Ltd. Announces Non Participation by Petrolatina Energy PLC in Atzam #3 Drilling Program and Drilling of Atzam #3 Update

CALGARY, ALBERTA--(Marketwire - Aug. 12, 2009) - NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S. Quetzal Energy Ltd. (TSX VENTURE:QEI) ("Quetzal") announces today that it has been advised that Petrolatina Energy PLC ("Petrolatina") will not be exercising its right to obtain a 20% participation interest in the Atzam #3 well by paying its proportioned share of costs and expenses. The Atzam #3 well is located within the License A7-2005 area in Guatemala, and is the subject of a current drilling program being undertaken by Quetzal. For further details on the Atzam #3 well and current drilling campaign, please refer to the press releases of Quetzal dated June 25 and July 23, 2009, each available on SEDAR at www.sedar.com. In other news the downhole Quetzal drilling operations restarted on August 9 in Atzam #3. Surface washouts have been repaired and the lost circulation zone between 52 feet and top of limestone at 70 feet has been cement squeezed. Currently Quetzal is washing and reaming previously drilled hole from 150 feet to 505 feet with full drilling mud returns to shale shaker. Forward Looking Statements - Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Quetzal, including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with drilling activities, currency fluctuations, dependence upon regulatory approvals, the availability of financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.