PCI-1 and Delavaco Agree to Business Combination; Delavaco to Raise Up to $13 Million

TORONTO, ONTARIO--(Marketwire - Aug. 13, 2009) -

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

PCI-1 Capital Corp. (TSX VENTURE:ICC.P)("PCI-1") and Delavaco Energy Inc. ("Delavaco") are pleased to announce that they have entered into an amended and restated qualifying transaction agreement dated July 15, 2009 (the "Qualifying Transaction Agreement"). Under the terms of the Qualifying Transaction Agreement, Delavaco will amalgamate with a wholly-owned subsidiary of PCI-1 and holders of common shares of Delavaco will receive 0.6438 of one PCI-1 common share for every Delavaco common share so held in connection therewith. The proposed transaction (the "Proposed Transaction") will result in a change of control of PCI-1. The arm's length Proposed Transaction will constitute PCI-1's "Qualifying Transaction" under the applicable policies of the TSX Venture Exchange (the "Exchange").

About Delavaco

Delavaco is an Ontario corporation which was incorporated on November 1, 2007 and is a private and early-stage oil and gas exploration and development company. Delavaco is headquartered in Calgary and has an office in Toronto. The company has two wholly-owned Barbadian subsidiaries (the "Subsidiaries") and a registered branch office in Bogota, Colombia. The directors and officers of Delavaco are Andrew DeFrancesco, Joseph Feldman, Rocco Pugliese, Bob Szczuczko and Wally Rudensky.

Delavaco's strategy is to build an international oil and gas company through the acquisition and exploitation of opportunities in oil and natural gas exploration, development and production. Delavaco's initial focus has been in Colombia, due to the presence of prolific petroleum systems - geological settings with proven petroleum source rocks, migration pathways, reservoir rocks and traps - attractive royalty, taxation and other fiscal terms, and decreasing crime, violence, civil strife and uncertainty.

Since its incorporation, Delavaco has completed several equity financings with various accredited investors and financial institutions in Canada, the United States and the United Kingdom for aggregate gross proceeds in excess of $30,000,000, which proceeds have been used by Delavaco to seek out, investigate, evaluate and acquire certain rights and interests in oil and gas exploration, development and production opportunities in Colombia and to pay costs related to the exploitation of such interests.

In connection with the Proposed Transaction, Delavaco engaged Primary Capital Inc. and PowerOne Capital Markets Limited (the "Agents") to act as agents in a best efforts $6,500,000 to $13,000,000 private placement financing (the "Private Placement") to fund the exploration and development of its interests in three producing blocks in Colombia (the "Delavaco Projects"), the acquisition of production equipment and facilities, and general corporate expenses. The Private Placement closed on July 23, 2009. Pursuant to the Private Placement, 40,625,000 subscription receipts of Delavaco (the "Subscription Receipts") were issued at a price of $0.32 per Subscription Receipt for gross proceeds of $13,000,000. The Private Placement is described in greater detail below under the heading "Financing".

The Delavaco Projects

The Delavaco Projects are made up of a working interest in two (2) exploration and exploitation blocks (51% of the Rio Madgelena block located in the Middle Magdalena Basin and 39% of the Carbonera block located in the Catatumbo Basin) with potential exploration and development upside. Delavaco also holds a 3.6% interest in La Punta #2, which is a producing well within the La Punta block in the Llanos Basin in Colombia. Delavaco's daily average net production after royalty as at December 31, 2008 was 120 barrels of oil and 310 Mcf of gas.

Terms of the Proposed Transaction

Pursuant to the Qualifying Transaction Agreement, the Proposed Transaction will be effected by way of a three-cornered amalgamation (the "Amalgamation") whereby Delavaco will amalgamate with a newly formed wholly-owned subsidiary of PCI-1 pursuant to the provisions of the Business Corporations Act (Ontario), with the resulting corporation (which will be a wholly-owned subsidiary of PCI-1) to carry on the current oil and gas exploration and development business of Delavaco under its existing name. Pursuant to the Amalgamation, at the effective time of the Amalgamation, holders of common shares of Delavaco will receive 0.6438 of one PCI-1 common share in respect of each Delavaco common share so held (the "Exchange Ratio"). In addition, outstanding warrants and other convertible securities of Delavaco will be exchanged on a similar basis for instruments of PCI-1 and will be exercisable for or convertible into, as the case may be, common shares of PCI-1, and outstanding options to purchase Delavaco common shares granted under the stock option plan of Delavaco will entitle the holders thereof to acquire common shares of PCI-1, on the basis of the Exchange Ratio. It is currently expected that PCI-1 will, subject to the receipt of requisite approvals, change its name to Delavaco Energy Corp.

Based on the foregoing and pursuant to the terms of the Amalgamation agreement and the number of Delavaco common shares and securities convertible into Delavaco common shares currently outstanding:

(a) approximately 63,959,401 PCI-1 common shares will be issued to the shareholders of Delavaco in exchange for 99,346,694 Delavaco common shares, being all of the Delavaco common shares which are expected to be issued and outstanding immediately prior to the Amalgamation;

(b) 14,010,698 PCI-1 warrants to purchase approximately 14,010,698 PCI-1 common shares will be issued to the holders of Delavaco warrants to replace the 21,762,500 Delavaco warrants to purchase 21,762,500 Delavaco common shares, being all of the Delavaco warrants which are expected to be issued and outstanding immediately after the conversion of the Subscription Receipts and prior to the Amalgamation;

(c) 444,222 PCI-1 options to purchase approximately 444,222 PCI-1 common shares will be issued to the holders of Delavaco options to replace the 690,000 Delavaco options to purchase 690,000 Delavaco common shares, being all of the Delavaco options which are expected to be issued and outstanding immediately prior to the Amalgamation; and

(d) 1,830,806 PCI-1 options to purchase 1,830,806 PCI-1 common shares will be issued to the holders of Delavaco agents' options to replace the 2,843,750 Delavaco agents' options to purchase 2,843,750 Delavaco common shares, being all of the Delavaco agents' options which are expected to be issued and outstanding immediately prior to the Amalgamation.

Certain PCI-1 common shares held by "Principals" (as defined in the Manual (as defined below)) of PCI-1 subsequent to completion of the Amalgamation will be subject to escrow restrictions pursuant to Policy 5.4 of the Corporate Finance Manual of the Exchange (the "Manual").

Financial Information Concerning Delavaco

The following information is derived from Delavaco's management-prepared financial statements as at and for the three month period ended March 31, 2009 and as at and for the year ended December 31, 2008. Such information is subject to all other information contained in the relevant financial statements. Unless otherwise noted, all information is reported in Canadian dollars.

/T/

As at and for the As at and for the
three months ended financial year ended
March 31, 2009 December 31, 2008
(unaudited) (audited)

Revenue $586,203 $1,620,905

Direct Costs $837,448 $1,379,575

Operating Expenses $1,371,344 $11,218,896

Net income (loss) $(1,400,418) $(6,252,048)

Total Assets $30,485,349 $30,391,042

Total Liabilities $4,511,487 $3,264,677

Shareholders' Equity $25,973,862 $27,126,365

/T/

Officers and Directors of PCI-1 upon Completion of the Amalgamation

The board of directors of PCI-1 currently consists of Michael Bester, Frank Davis, Richard Elder and Brandon Gordon.

Concurrently with the completion of the Amalgamation, it is expected that Frank Davis, Richard Elder and Brandon Gordon will resign from the PCI-1 board and will be replaced by Michael Bester, Andrew DeFrancesco, Dr. Herman T. Franssen, Robert Szczuczko, and Gordon Harris. It is also expected that Robert Szczuczko will be the President and Chief Executive Officer and Wally Rudensky, CA will be the Interim Chief Financial Officer of the amalgamated corporation.

Michael Bester, Director:

Michael Bester, age 45, obtained a Bachelor of Commerce degree from the University of Guelph in 1987. From 1988 until 1991, Mr. Bester was an investment adviser with Richardson Greenshields Ltd. In 1991, Mr. Bester co-founded and formed Market Street Investment House which was an independent Canadian brokerage firm. In 1996, Market Street Investment House was acquired by First Marathon Securities and Mr. Bester became vice-president of retail sales of First Marathon Securities. From 2003 to 2006, Mr. Bester acted as an institutional/retail salesman for two independent brokers and in 2007 joined Primary Capital Corporation as an institutional salesman.

Andrew DeFrancesco, Director:

Andrew DeFrancesco (the founder of Delavaco) is currently the Co-Chairman of Delavaco Energy Corp., a position he has held since November 2007. In addition, Mr. DeFrancesco operates a privately owned boutique private equity firm and is president and Chief Executive Officer of SA Resources Inc. Prior to that he served as a senior executive of various Canadian investment banks responsible for raising over a billion dollars of investment capital. He has over 14 years of experience in raising capital for private and public ventures and has been responsible for financially reorganizing numerous companies in various industries, most notably those in energy related industries.

Dr. Herman T. Franssen, Director:

Dr. Herman T. Franssen is currently the President of International Energy Associates, Inc., a company providing energy economic analysis and global and regional oil and natural gas market outlook, project evaluation and risk analysis. Dr. Franssen has over 34 years of experience conducting energy economic analysis, with previous positions which include Specialist in Energy and Science Policy at the Congressional Research Service of the US Library of Congress, Director of the Office of International Market Analysis of the US Department of Energy, Chief Economist for the International Energy Agency of the OECD in Paris, France, and 11 years as senior economic advisor to the Minister of Petroleum and Minerals of the Sultanate of Oman and the oil and gas industry, as well as numerous energy related publications and academic affiliations.

Gordon Harris, Director:

Mr. Harris is currently the Managing Director, Mergers & Acquisitions and Business Development of the Primera Energy Resources Ltd.. Prior to February 1, 2009, Mr. Harris was the Senior Vice President and Chief Operating Officer and a director for Buffalo Resources Corp. an oil and gas company listed on the Exchange from August 2007 until August 2008. He was formerly the President and Chief Executive Officer and a director of Choice Resources Corp. (an oil and gas company) from February 2004 to August 2007. From 1999 to 2003, he was President of Roseland Resources Ltd. (an oil and gas company). He is also a director of several publicly traded oil and gas corporations. Mr. Harris is a professional engineer and has a Masters of Business Administration with over 29 years of business experience. He has successfully restructured three public companies, one private company and two divisions within a larger oil and gas corporation.

Wally Rudensky, CA, Interim Chief Financial Officer:

Wally Rudensky, CA has over 25 years experience in public accounting as partner at EvansMartin LLP Chartered Accountants in Toronto and previously with Arthur Anderson (now Deloitte). He is President of DFF Management Inc., a private company providing financial management and governance services to Canadian and U.S. listed companies. He has extensive experience in taxation and finance with particular attention to corporate reorganizations in the domestic and international markets.

Robert Szczuczko, Director, President and Chief Executive Officer:

Robert Szczuczko is currently the President and Chief Executive Officer of Delavaco Energy Corp. Mr. Szczuczko has 33 years of experience in the oil & gas industry, most recently as Executive Vice-President of Geoscience and Engineering at Canoro Resources Ltd., a junior oil & gas company listed on the Exchange and prior thereto as Manager of Production at PetroKazhakstan Inc.

Financing

Delavaco entered into an engagement agreement dated June 16, 2009 and an agency agreement dated July 23, 2009 pursuant to which Primary Capital Inc. and PowerOne Capital Markets Limited acted as agents to Delavaco (together, the "Agents") in connection with the Private Placement offering of 40,625,000 subscription receipts of Delavaco (the "Subscription Receipts") at a price of $0.32 per Subscription Receipt for gross proceeds of $13,000,000. The Private Placement was subject to certain conditions including, but not limited to, the completion of satisfactory due diligence by the Agents.

Upon closing of the Private Placement, the gross proceeds from the sale of the Subscription Receipts were deposited into escrow (the "Escrowed Funds") pending the completion of the Proposed Transaction to the satisfaction of the Agents. Immediately prior to completion of the Amalgamation and assuming the satisfaction of certain customary conditions, each Subscription Receipt will be exchanged, without the payment of any additional consideration, for one unit of Delavaco (each, a "Unit") and the Escrowed Funds will be released to Delavaco and the Agents, as applicable. Each Unit will consist of one common share of Delavaco and one-half of one common share purchase warrant of Delavaco and each whole warrant will entitle the holder thereof to purchase one common share of Delavaco at a price of $0.4829 per share, subject to adjustment, until July 23, 2011. If the conditions to the completion of the Proposed Transaction have not been satisfied on or before October 31, 2009, the Escrowed Funds, together with any interest earned thereon, will be returned to the holders of Subscription Receipts on a pro rata basis and the Subscription Receipts will be cancelled.

In connection with the Private Placement, the Agents will be paid a cash commission equal to 7% of the Escrowed Funds upon the release thereof from escrow and have been issued broker options exercisable to acquire 2,843,750 common shares of Delavaco at a price of $0.32 per common share, subject to adjustment, until July 23, 2011.

Credit Facility

Global Resource Fund has provided to Delavaco a US$4,000,000 multi-tranche credit facility currently secured by a demand promissory note. It is the current intention of the parties that the demand note be converted to a term note with respect to the amounts drawn under the first three tranches, and the remainder to a convertible debenture (the "Global Loan Restructuring").

Sponsor

Clarus Securities Inc. has agreed to act as Sponsor (as defined in the Manual) for Delavaco in connection with the Proposed Transaction.

Conditions to Completion of the Amalgamation

The completion of the Amalgamation is subject to satisfaction of a number of customary conditions precedent, including but not limited to, receipt of the approval of the Exchange, the approval of the shareholders of Delavaco, the completion of a private placement financing transaction by Delavaco on terms acceptable to Delavaco and PCI-1, and the Global Loan Restructuring. There can be no assurance that the Amalgamation will be completed as proposed or at all.

The Amalgamation is between arm's length parties.

About PCI-1 Capital Corp.

PCI-1 is a capital pool company ("CPC") within the meaning of the policies of the Exchange. PCI-1 has not commenced operations and has no assets other than cash.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to the requirements of the Exchange, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the proposed transaction; the terms and conditions of the proposed Private Placement; future exploration and testing; use of funds; and the business and operations of PCI-1 after the proposed transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; the price of crude oil and natural gas; and the results of current exploration and testing. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. PCI-1 and Delavaco disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.