CALGARY, ALBERTA--(Marketwire - March 28, 2011) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Tuscany International Drilling Inc. (TSX:TID) ("Tuscany") is pleased to announce that it has entered into a letter of intent to acquire all of the issued and outstanding shares of a private Brazilian drilling and work-over company (the "Company"), together with seven drilling rigs and two work-over rigs located in Brazil from an affiliate of the Company, for an aggregate cash purchase price of approximately US$52 million (the "Acquisition"). Of the nine rigs to be acquired, two drilling rigs are on long-term contracts and one drilling rig is on a year-to-year contract. The letter of intent contemplates US$5 million of the purchase price to be held in escrow for 12 months to satisfy any post-closing liabilities and the entering into of a consulting agreement with the principal of the Company to assist with continuity of operations. Closing of the Acquisition, currently anticipated to occur on or about April 30, 2011, is subject to various conditions, including the entering into of the binding definitive agreements in respect of same and the receipt of all applicable third party and regulatory approvals.

Currently, the Company generates annual EBITDA of approximately US$6 million. Tuscany anticipates that it will invest approximately US$10 million to refurbish some of the rigs in the Company's fleet with the anticipated result of increasing the Company's EBITDA to approximately US$12 - US$14 million.

This strategic acquisition will provide Tuscany with critical mass in one of the fastest growing markets in South America. The addition of the nine rigs will increase Tuscany's rig count in Brazil to 11, or approximately 20% of the active rig fleet in Brazil. The acquisition will provide synergies in Tuscany's operations, administration, marketing and future growth in Brazil.

In conjunction with the Acquisition, Tuscany is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by Wellington West Capital Markets Inc. (collectively, the "Underwriters"), pursuant to which the Underwriters have agreed to purchase, on a bought deal basis 65,360,000 subscription receipts ("Subscription Receipts") at a price of $1.53 per Subscription Receipt, for aggregate gross proceeds of approximately $100 million (the "Offering"). In addition, the Underwriters have been granted an over-allotment option, exercisable for a period commencing at closing of the Offering (the "Closing") and ending 30 days following Closing, to purchase up to 9,804,000 additional Subscription Receipts at a price of $1.53 per Subscription Receipt. If the over-allotment is fully exercised, gross proceeds from the Offering will be approximately $115 million. Proceeds of the Offering will be used to fund the purchase price of the Acquisition, organic growth, potential future acquisitions and for general corporate purposes.

Each Subscription Receipt shall entitle the holder thereof to receive, for no additional consideration and without further action, one common share ("Common Share") of Tuscany, upon satisfaction of the Escrow Release Conditions (defined below). The gross proceeds of the Subscription Receipt offering (the "Escrowed Funds") will be held in escrow and will be released to Tuscany upon satisfaction of the following conditions ("Escrow Release Conditions"): (i) the closing of the Acquisition in accordance with the terms and conditions of the binding definitive agreements; and (ii) receipt by Tuscany of all necessary regulatory and other approvals for the Acquisition and the issuance of the Common Shares issuable pursuant to the Subscription Receipts. In the event that the Escrow Release Conditions are not satisfied at or before 4:00 pm (Calgary time) on May 31, 2011, or the letter of intent in respect of the Acquisition is terminated or Tuscany advises the Underwriters or the public that it does not intend to proceed with the Acquisition, the Escrowed Funds, together with accrued interest thereon, shall be returned to the holders of the Subscription Receipts.

The Subscription Receipt offering is expected to close on or about April 19, 2011 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX and applicable securities regulatory authorities.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities law and may not be offered or sold in the United States absent registration or applicable exemption from those registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

http://www.theglobeandmail.com/globe-investor/news-sources/?date=20110328&archive=ccnm&slug=201103280685180001