BUENOS AIRES, ARGENTINA--(Marketwire - Dec. 18, 2012) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

Estrella International Energy Services Ltd. ("Estrella" or the "Company") (TSX VENTURE:EEN), announces its operational update for December 2012. Warren Levy, Chief Executive Officer of Estrella commented: "The Company has made extensive advances in the planned repositioning of our rig fleet onto long term stable operations. We are also pleased to announce that our directional drilling business has completed successful rollout in Argentina and Chile, and we expect to be operational in both Peru and Colombia early in the new year. We believe that these moves will unlock substantial improvements in financial performance and have substantially better positioned the Company for the future."

Rig 1201

Along with rig 551, rig 1201 is the premier rig in Estrella's rig fleet as an AC power, fully automated drilling rig. In November 2012, Estrella signed a 3+2 year contract with YPF to commence drilling operations for it in the Neuquen basin in Argentina. The rig is expected to operate drilling deep high pressure gas wells. The rig is currently being prepped to mobilize into the field.

The contract required Estrella to transport rig 1201 from Chile to Argentina, which in turn required the consent of Estrella's primary lender, Credit Suisse, in connection with the amended and restated credit agreement made between Estrella and Credit Suisse (the "CS Credit Facility"). On December 14, 2012, Estrella obtained the consent of Credit Suisse, and as a condition of granting of the consent, Estrella was required to repay US$1.5M of principal on the CS Credit Facility and to maintain a ratio of 2.5 to 1 of pledged assets (valued at fair market) to principal.

Rig 551

Rig 551 recently completed two successful drilling campaigns for Canadian junior operators in Argentina. The rig is in the final stages of negotiations for a multi-year contract with an operator in the Neuquen basin of Argentina. The rig is completing its periodic API inspection and if awarded, is expected to initiate operations on the new contract before year end.

Rigs 101 and 102

Rigs 101 and 102 have been offered contract extensions for 3 additional years with the same operator in southern Argentina. This contract extension would see the rig operating seven consecutive years in the same fields.

Peru Operations

Rig 204 has been successfully relocated from Colombia, and along with Rig 201 is working on contract in Peru.

Colombia Operations

Rig 1002, has been awarded a contract to drill for an operator in central Colombia and is in the first wellsite being prepared to drill. Rigs 205 and 552 continue to operate on their contracts and rig 556 has been awarded a short test contract ahead of a key long term tender in the field next year. Rigs 202 and 206 have been offered long term contracts in Argentina, and the company is currently evaluating the feasibility of relocating the rigs to that country.

The remainder of the fleet in Colombia continues to be marketed and the Company believes there is a strong potential to place additional rigs onto long term contracts in the country.

Rig Fleet Status
	7 Rigs on long term contracts	37%
	2 Rigs completing long term contracts in early 2013	10.5%
	2 Rigs offered multi-year contracts	10.5%
	3 Rigs working on short term contracts	16%
	5 Rigs being marketed	26%

Directional Drilling and General

Estrella has now successfully deployed gyro services in Argentina, Peru and Colombia. Directional services with Scientific Drilling supplied tools have been run with 100% operational success in Argentina and Chile, with deployment and operational start expected in Colombia and Peru early in 2013. The fourth quarter has seen staff being trained at Scientific Drilling International in the US.

Loan from Ringo Holdings L.P.

Ringo Holdings L.P., the controlling shareholder of Estrella, has pursuant to a subordinated loan agreement and promissory note dated as of December 17, 2012, agreed to loan US$10 million to the Company, which loan can be increased to up to US$20 million (the "Loan"). The Loan bears interest at the rate of 12% per annum for the period from December 17, 2012 to September 17, 2013, and 14% per annum at all times thereafter. On December 17, 2012, Ringo Holdings L.P. disbursed US$10 million on the Loan.

The Loan is subordinate to the CS Credit Facility, and subject to certain exceptions, the Company is not authorized to make any payments of principal or interest on the Loan until such time as the CS Credit Facility has been terminated.

The directors of the Company have determined that the Loan is on commercially reasonable terms that are no less advantageous to the Company that what it could have received on the open market.

The proceeds from the Loan will be used to repay a portion of the CS Credit Facility, refinance certain short term debt obligations, finance some working capital obligations associated with new rig contracts and for general corporate purposes.

A copy of the subordinated loan agreement and the promissory note can be found on SEDAR at www.sedar.com.

Update on Acquisitions

Estrella is also pleased to report on the final status of contingencies associated with its previously announced acquisitions of STS and Zigma.

For the acquisition of STS, on closing 4,750,000 Class A Preferred Shares were issued to the vendors on closing and subject to escrow conditions in connection with contingencies. 164,374 of the Class A Preferred Shares will be released to the Company and cancelled against contingencies, and the remaining 4,584,626 Class A Preferred Shares will be released from escrow to the vendors.

For the acquisition of Zigma, on closing the Company reserved the issuance of Class B Special Shares to the vendors, pending resolution of contingencies. After resolving contingencies with the vendors, no Class B Preferred Shares will be issued.

Appointment of New Chairman

At its recent strategy sessions in Buenos Aires the board of directors, in an attempt to further comply with the objectives of National Policy 58-201 and best practices in corporate governance, decided to separate the roles of CEO and Chairman. To this end the Company is pleased to announce that Horacio Reyser has been appointed Chairman of Estrella. Warren Levy, the former Chairman and CEO will continue in the role of CEO.

Mr. Reyser is a partner of the Southern Cross Group has been with the firm since its inception in 1998 and is based in Buenos Aires, Argentina. He has been a director of Estrella since July 2012. Mr. Reyser has 18 years of operating, consulting and private equity experience in Latin America. Prior to joining Southern Cross, Mr. Reyser worked for INFUPA - a regional M&A advisory firm, where he focused on infrastructure, services and industrial company related mergers and acquisitions. Mr. Reyser began his career in financial and strategic planning at SIDERCA, the Argentine steel tube manufacturer which is part of the Techint Group - one of the largest industrial conglomerates in Latin America. He later worked in SIDERAR, the flat-steel products divisions of the Techint Group focused on a wide variety of operational projects and strategic acquisitions executed by subsidiaries of the Techint Group. Mr. Reyser holds a degree in Industrial Engineering from Instituto Tecnológico de Buenos Aires (ITBA) and completed an Advanced Management Program at Harvard Business School. Mr. Reyser is a member of the Board of Directors of CGC, an Argentine exploration and production company controlled by Southern Cross. He is also the Director of the Business Council of CADAL (Center for Latin American Opening and Development).

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects" and similar expressions. Forward-looking statements in this press release include, but are not limited to, statements with respect to the future business plans and services.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Estrella. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and Estrella does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

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