Canacol Energy Ltd. and Shona Energy Company, Inc. Announce

Canacol Energy Ltd. and Shona Energy Company, Inc. Announce Business
Leading Independent Proxy Advisors ISS and Glass Lewis Endorse the
Canacol Energy and Shona Energy Plan of Arrangement 
CALGARY, ALBERTA -- (Marketwire) -- 12/06/12 -- Canacol Energy Ltd.
("Canacol") (TSX:CNE)(COLOMBIA:CNEC) and Shona Energy Company, Inc.
("Shona") (TSX VENTURE:SHO)(OTCQX:SHOAF) are pleased to jointly
announce that Institutional Investor Services (ISS) and Glass Lewis &
CO. (GL), leading proxy advisory firms, have recommended that
shareholders of Canacol and Shona vote in favour of the plan of
arrangement under which Canacol will acquire all of Shona's
outstanding shares.  
The ISS report concludes that "in view of the expected strategic
benefits and absence of any significant governance concerns, a
favourable vote by shareholders for the merger is warranted".  
The transaction will enable the combined company to take a leading
role in Colombia's expanding energy market at a low entry price,
resulting in an expanded reserves base and more diversified asset
portfolio. Shona will add three conventional heavy oil exploration
contracts to Canacol's extensive exploration position in the Caguan -
Putumayo basin. 
Both firms also endorse Canacol's proposal for a 1-for10 stoc
consolidation as part of the transaction. "Stock consolidations,
while not immediately adding to shareholder value, should enhance the
long-term growth prospects of the company by broadening its financing
alternatives", ISS notes. "Continued low trading prices of the
company's shares can put them below investment grade for many
institutions, limiting the potential capital base for the company and
its prospects for raising new capital as needed." 
Reaffirming the ISS report GL concludes: "We agree with the board
that it is in the best interest of the Company to reduce the number
of shares outstanding and thereby attempt to proportionally raise the
per share price of the Company's ordinary shares. Further, the share
consolidation will have no substantive economic effect on
shareholders, whose ownership percentage in the Company will remain
unchanged. Having reviewed the proposal, we see no cause for
shareholder concern. Accordingly, we recommend that shareholders vote
FOR this proposal." 
Welcoming the recommendations, Charle Gamba, Canacol's CEO and
president, said: "The findings confirm our confidence that the
transaction will strengthen our base with stable, low-cost production
and associated cash flows under long-term sales contracts. These
benefits will give the combined company easier access to capital and
open up new consolidation opportunities, especially in Colombia." 
James Payne, Shona's CEO and chairman, added: "We encourage our
shareholders to vote in favour of the combination with Canacol. We
see this as a great opportunity to take part in the continuing
consolidation of oil and gas exploration and production in South
Attention Canacol and Shona shareholders:  
Be sure to vote your proxy before the respective deadlines: 
Canacol: Voting Deadline: Wednesday, December 12, 2012 at 9:00 AM
(Calgary time)  
For more information and assistance in voting your proxy, please
contact Kingsdale Shareholder Services Inc. at 1-866-228-3049 or by
email at  
Shona: Voting Deadline: Wednesday, December 12, 2012 at 9:00 AM
(Houston time) 
For more information and assistance in voting your proxy, please
contact Kingsdale Shareholder Services Inc. at 1-866-229-8651 or by
email at  
About Canacol Energy: 
Canacol is an exploration and production company with operations
focused in Colombia and Ecuador. Canacol shares trade on the TSX and
the Colombia Stock Exchange under ticker symbol CNE and CNE.C,
About Shona Energy:  
Shona is an international oil and natural gas exploration,
development and production company focusing on South America,
specifically Colombia and Peru. Shona's assets include interests in
the Shona-operated Esperanza block located in Colombia's Lower
Magdalena Basin, the non-operated Serrania, Los Picachos and Macaya
Blocks in Colombia's Caguan Putumayo Basin, and the non-operated
Block 102 in Peru's Maranon Basin. 
Permission to quote from the ISS and GL reports was neither sought
nor obtained. 
Neither the TSX nor 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. 
Kingsdale Communications Inc.
Bernard Simon
Canacol Energy Ltd.
Shona Energy Company, Inc.
Shetal Mentlewski
VP Admin & Legal
Press spacebar to pause and continue. Press esc to stop.