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Tuscany International Drilling Inc. Announces Commencement of Restructuring Proceedings, Amended Credit Agreement, Support Agreement and Forbearance Agreement

CALGARY, ALBERTA -- (Marketwired) -- 02/02/14 -- Tuscany International Drilling Inc. ("Tuscany" or the "Company") (TSX: TID)(COLOMBIA: TIDC) announces that it and one of its subsidiaries, Tuscany International Holdings (U.S.A.) Ltd. ("Tuscany USA") have commenced proceedings under Chapter 11 of the United States Bankruptcy Code ("US Code") in the United States Bankruptcy Court for the District of Delaware (the "Chapter 11 Proceedings") to implement a restructuring of the Company's debt obligations and capital structure through a plan of reorganization under the US Code (the "Plan"). The Company and Tuscany USA also intend to commence ancillary proceedings in the Court of Queen's Bench of Alberta under the Companies' Creditors Arrangement Act ("CCAA") to seek recognition of the Chapter 11 Proceedings and certain related relief (the "CCAA Proceedings"). The Chapter 11 Proceedings and the CCAA Proceedings will provide for a stay of proceedings against the Company and Tuscany USA. Other than Tuscany USA, none of the Company's other subsidiaries are parties to the Chapter 11 Proceedings or the CCAA Proceedings. The proposed USD $35 million DIP Credit Facility described in this press release is expected to provide the Company with sufficient working capital to allow its subsidiaries to continue to operate in the normal course and meet their ongoing obligations over the course of the restructuring.

The Company will enter into a fourth amended and restated senior secured guaranteed credit agreement (the "Amended Credit Agreement") with Credit Suisse AG, Cayman Islands Branch, as administrative agent (the "Agent") and its various lenders. The Company has entered into a restructuring support agreement (the "Support Agreement") with the Agent and certain of its lenders. The Amended Credit Agreement and the Support Agreement are to facilitate the Company's restructuring under the US Code and the CCAA.

Pursuant to the Amended Credit Agreement, certain of the Company's lenders (the "Lenders") will provide a new credit facility to the Company under the Amended Credit Agreement (the "DIP Credit Facility") which will provide new funding to the Company in an aggregate principal amount of USD $35 million. The DIP Credit Facility is subject to Court approval and the new funds will be used to provide the Company and its subsidiaries with working capital to meet their ongoing obligations over the course of the restructuring. The DIP Credit Facility is subject to various conditions, including a condition that it be approved by the United States Bankruptcy Court for the District of Delaware pursuant to the US Code. Upon satisfaction or waiver of the conditions precedent contained in the Amended Credit Agreement, the Company will be indebted to the Lenders in the principal amount of approximately USD $237 million under the Amended Credit Agreement (the "Obligations"). The Company and the Lenders have also entered into a forbearance agreement pursuant to which the Lenders have agreed to forbear from enforcing their existing rights and remedies against the Company's subsidiaries in order to allow those subsidiaries to carry on business in the normal course during the Company's restructuring process.

The Company and the Lenders have agreed, subject to the terms of the Support Agreement, to pursue a balance sheet restructuring. The Support Agreement contemplates a bidding and marketing process to seek strategic alternatives that in accordance with bid procedures to be approved by the US Court (the "Bid Procedures") is intended to maximize value for stakeholders.

The foregoing summary description of the Support Agreement is not a complete description of the rights and obligations under such agreement, and interested parties are encouraged to review the copy of Support Agreement which has been filed by the Company on SEDAR.

During the restructuring proceedings the Company expects to continue with its day-to-day operations, and employee obligations and any trade payables incurred after today are expected to be paid or satisfied in the ordinary course. The DIP Credit Facility, together with current cash balances of and anticipated cash flow from operations, are expected to provide sufficient liquidity to the Company through the restructuring period.

Trading the Company's common stock on the Toronto Stock Exchange and the Colombian Stock Exchange has been halted, and the Company anticipates that the trading halt will remain in effect pending delisting of the common stock. The Company expects to complete the restructuring during the second quarter of 2014.

About Tuscany

Tuscany, a corporation headquartered in Calgary, Alberta, is engaged in the business of providing contract drilling and work-over services along with equipment rentals to the oil and gas industry. Tuscany is currently focused on providing services to oil and natural gas operators in South America. Tuscany has operating centers in Colombia, Brazil and Ecuador.

Further Information

For more information, please visit Tuscany's website at


Statements in this news release contain forward-looking information including, without limitation, statements with respect to Tuscany's strategic alternatives, the restructuring of the assets and liabilities of the Company and the future financial position and focus of the Company. Readers are cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Tuscany.

These risks include, but are not limited to: (i) Tuscany's level of indebtedness and the acceleration of such indebtedness; Tuscany's ability to complete a strategic restructuring and refinancing transaction or alternative transaction, Tuscany's ability to negotiate and execute definitive documentation with respect to the restructuring (including Tuscany's ability to complete a new debtor-in-possession credit facility and new replacement senior secured credit facility) and obtain bankruptcy court approval thereof; (ii) the effects of the commencement of the CCAA and US Code proceedings on Tuscany and the interests of various creditors, equity holders and other constituents; (iii) bankruptcy court rulings and the outcomes of the proceedings in general; (iv) the length of time Tuscany will operate under the proceedings; (v) risks associated with third party motions in the proceedings, which may interfere with Tuscany's ability to consummate Tuscany's restructuring plan; (vi) the potential adverse effects of the proceedings on Tuscany's liquidity or results of operations; (vii) Tuscany's ability to execute its business and restructuring plan; (viii) increased legal and other costs related to the proceedings; (ix) Tuscany's ability to maintain contracts that are critical to its operation and to obtain and maintain normal terms and relationships with its suppliers, other service providers, customers, employees, stockholders and other third parties; (x) Tuscany's ability to retain key executives, managers and employees; (xi) Tuscany's ability to generate sufficient cash flow from operations or obtain adequate financing to fund its capital expenditures and meet working capital needs and its ability to continue as a going concern during the restructuring; (xii) the volatility of Tuscany's stock price; (xiii) the availability of capital on economic terms to fund Tuscany's significant capital expenditures and acquisitions; (xiv) Tuscany's ability to obtain adequate financing to pursue other business opportunities; (xv) regulatory and environmental risks associated with exploration, drilling and production activities; (xvi) the adverse effects of changes in applicable tax, environmental and other regulatory legislation; (xvii) a deterioration in the demand for Tuscany's products; (xviii) the risks and uncertainties inherent in estimating future revenues and the timing of expenditures; (xix) intense competition with companies with greater access to capital and staffing resources; (xx) the risks of conducting operations in foreign jurisdictions and the impact of pricing differentials, fluctuations in foreign currency exchange rates and political developments on the financial results of Tuscany's operations; and (xxi) other risks as described in reports that the Company files with securities regulators.

Any of these factors could cause the Company's actual results and plans to differ materially from those in the forward-looking statements. The risks outlined above should not be construed as exhaustive. The reader is cautioned not to place undue reliance on this forward-looking information. Tuscany does not undertake any obligation to update or revise any forward-looking statements except as expressly required by applicable securities laws.

The listing of Tuscany's common shares on the Colombian Stock Exchange does not imply a certification by the BVC of the value or the solvency of Tuscany.

The Toronto Stock Exchange has not reviewed, nor does it accept responsibility for the adequacy or accuracy of this release.

Tuscany International Drilling Inc.
Walter Dawson
President and CEO
(403) 265-8258

Tuscany International Drilling Inc.
Matt Moorman
(403) 265-8258

Tuscany International Drilling Inc.
Deryck Helkaa
(403) 265-8258
(403) 265-8793 (FAX)

Tuscany International Drilling Inc.
1950, 140-4th Avenue S.W.
Calgary, Alberta

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