Algonquin Oil & Gas Limited Announces Closing of Private Placement and Shares for Debt Application

CHATHAM, ONTARIO--(Marketwire - Dec. 21, 2011) -

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Algonquin Oil & Gas Limited ("Algonquin") (TSX VENTURE:AQX) is pleased to announce that it has completed its previously announced non-brokered private placement (the "Private Placement") whereby it issued 11,400,000 common shares ("Algonquin Shares") at a price of $0.10 per share for gross proceeds of $1,140,000. The net proceeds from the Private Placement will be used to pay for all of the costs relating to Algonquin's previously announced business combination with Mondak Petroleum Inc. and for working capital purposes. All of the Algonquin Shares issued pursuant to the private placement are subject to a 4-month hold period. Completion of the private placement is subject to the final approval of the TSX Venture Exchange ("TSXV").

In addition to the Private Placement, Algonquin has applied to the TSXV to issue 3,633,000 Algonquin Shares at a price of $0.10 per share to settle US$350,000 of previously incurred debt held by James Fair, the President and Chief Executive Officer of Algonquin (the "Debt Settlement"). Closing of the Debt Settlement is subject to receipt of all necessary regulatory approvals, including the approval of the TSXV. All of the Algonquin Shares issued pursuant the Debt Settlement are subject to a 4-month hold period.

Algonquin would also like to announce that Mr. Russ Stewart and Mr. Greg Stewart have resigned as directors of the company. We wish to thank Mr. Russ Stewart and Mr. Greg Stewart for their efforts and wish them well in their future endeavours.