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Zaza Energy Announces Extinguishment OF $50.1 MILLION OF DEBT

The following excerpt is from the company's SEC filing.

$50.1 Million of Debt Extinguished

Debt Exchanged for 2.4% Overriding Royalty Interest in Future Leases

HOUSTON, TX September 21, 2015

ZaZa Energy Corporation (ZaZa or the Company) (NASDAQ:ZAZA) today announced that the holders of all of the 8.00% Subordinated Notes due 2017 (Notes), totaling ~$50.1 million in principal plus accumulated interest, have completed the exchange of their Notes for an overriding royalty interest (ORRI) in the Companys future lease acquisitions. All of these Notes were held directly or indirectly by the three Founders of ZaZa Energy Corporation, one of whi ch is the current President and CEO and all of which are Directors. Each of the three holders will receive a 0.8% ORRI on the Companys future lease acquisitions, or a total ORRI of 2.4%.

President and CEO Todd A. Brooks stated, Though the founders received shareholder approval during the summer to convert the Subordinated Notes to common equity, we felt we could add far more value to existing common equity holders by extinguishing the Subordinated Notes without any form of equity dilution. By taking this step, we are eliminating nearly half of our debt, moving from ~$105 million to ~$55 million, again, with no dilution to current shareholders. Exchanging a substantial debt holding for a potential royalty in future leases with no dilutive issuance of shares, further aligns management and our founders with our shareholders. This also reflects our expectation that the Company has the ability to grow, not just through lower risk conventional development of its current assets, but also through accretive acquisitions given the state of the industry today.

Brooks continued, We remain in discussions with our lenders, including the holders of our approximately $15 million Senior Secured Notes, with whom I am diligently working to have them approve extending their maturity to mid 2016...