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Petrobank Provides 2013 Capital Plan and Announces


Petrobank Provides 2013 Capital Plan and Announces Participation at the CAPP Investment Symposium

CALGARY, ALBERTA -- (Marketwire) -- 12/10/12 -- Petrobank Energy and Resources Ltd. (TSX:PBG) announces our 2013 capital plan which focuses on achieving commercial THAI(R) production rates at our Kerrobert project, increasing our land base for future THAI(R) opportunities and maintaining financial flexibility as a stand-alone independent company. Petrobank's 2013 development capital expenditures are expected to be approximately $23 million. Total capital and operating expenditures, including expected operating costs and maintenance capital, but before net production revenue, for all our projects and activities, is expected to be less than $50 million.

Kerrobert THAI(R) Project and Kerrobert Trend Areas

At Kerrobert, our operating plan remains focused on increasing air injection rates, increasing production rates and reducing operating costs per barrel. We continue to increase air injection rates, which is now approximately 16% of design capacity, up from approximately 8% in late-September. Production rates are expected to react positively as we continue to increase air injection rates. We have also recently completed a water disposal well near our Kerrobert project which will reduce operating costs.

We continue to evaluate our Kerrobert channel trend lands and recently completed three vertical stratigraphic wells on our Luseland properties, a large 3D seismic on our Kerrobert trend lands and a 4D seismic update at our Kerrobert THAI(R) project. The analysis of the wells and seismic data will be completed shortly. We plan to complete one of the vertical wells for cold production by the end of 2012. Our 2013 capital plans include the drilling of 12 vertical wells for stratigraphic evaluation and potential cold heavy oil production.

Capital expenditures in 2013 at our Kerrobert THAI(R) project and Kerrobert trend lands are expected to be approximately $15 million before operating expenses.

Dawson Project

At Dawson, we commenced cold production operations from our first horizontal production well in late-October and expect to initiate cold production at the second horizontal well before the end of 2012. These wells are expected to produce for a period of time to pre-condition the reservoir prior to start-up of the THAI(R) demonstration project.

Capital expenditures in 2013 at Dawson are expected to be less than $1 million before operating expenses. The timing and capital commitment for completion of the THAI(R) demonstration project will be determined later in 2013.

Other Opportunities

Petrobank continues to expand our inventory of potential THAI(R) development opportunities. We are continuing with research and development activities at Archon to expand and protect our intellectual property, along with marketing our technologies to third parties. Capital expenditures on new development opportunities and Archon are expected to be approximately $7 million.

Financial Liquidity and Capital Resources

Assuming the completion of our previously announced reorganization with PetroBakken at the end of 2012, Petrobank will begin 2013 as a well financed heavy oil company leveraging our strong asset base and patented technology. We expect to have over $100 million of cash and no third party debt, assuming the receipt of PetroBakken's December 2012 dividend in cash in mid-January, 2013. We expect to fund our 2013 expenditures with cash on hand and sales revenue from production. Our current capital resources are expected to be more than adequate for our planned expenditures while providing financial flexibility to pursue future THAI(R) developments and acquisition opportunities.

Executive Changes

We are pleased to announce the promotion of Mr. Kenneth Rossi to Vice President, Land and Regulatory effective December 7, 2012. Ken joined Petrobank in March 2008 and was most recently General Manager, Land, Contracts & Compliance.

Mr. Robert Richardson, previously Vice President, Exploitation, has resigned from the Company effective December 6, 2012. We wish to thank Rob for his past service and wish him the best in his future endeavours.

2012 CAPP Investment Symposium and Updated Investor Presentation

Petrobank will be presenting at the Canadian Association of Petroleum Producers (CAPP) Investment Symposium on Tuesday, December 11, 2012 at 3:00 pm (ET) and on Wednesday, December 12, 2012 at 2:30 pm (ET) in Toronto, Ontario.

We have updated our investor presentation and it is now available at www.petrobank.com. The webcast link and presentation slides will be available at www.petrobank.com and at the Investment Symposium at htt p://www.capp.ca/aboutUs/events/CAPPOilGasSymposium/Pages/default.aspx .

"The 2012 CAPP Investment Symposium focuses on the investment opportunities offered in the high-growth, high-potential Canadian oil and gas industry. With the third-largest oil reserves in the world and equally significant natural gas assets, Canada's upstream oil and gas industry will continue to create significant value for investors, the industry and all Canadians as global energy demand grows," said CAPP president Dave Collyer. "CAPP's Investment Symposium will highlight industry plans to ensure competitiveness and social license to realize these growth opportunities."

For more details on the 2012 CAPP Investment Symposium, including the full program, travel, accommodation and registration information, please visit: https://event-wizard.com/CAPPIS2012Introduction/0/pages/51229/.

Forward-Looking Statements: Certain information provided in this press release constitutes forward-looking statements. Specifically, this press release contains forward-looking statements relating to future capital expenditures, timing for development of our various projects and availability of capital. Forward-looking statements are necessarily based upon assumptions and judgments with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, success of future evaluation and development activities, the successful application of technology, prevailing commodity prices, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, and the regulatory and legal environment. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. You can find a discussion of those risks and uncertainties in our Canadian securities filings. Such factors include, but are not limited to: general economic, market and business conditions; fluctuations in oil prices; the results of exploration and development drilling, risks associated with the development and application of early stage technology, recompletions and related activities; timing and rig availability; fluctuation in foreign currency exchange rates; the uncertainty of reserve and resource estimates; changes in environmental and other regulations; risks associated with oil and gas operations; and other factors, many of which are beyond the control of the Company. There is no representation by Petrobank that actual results achieved during the forecast period will be the same in whole or in part as those forecast. Except as may be required by applicable securities laws, Petrobank assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

Petrobank Energy and Resources Ltd. is a Calgary-based oil and natural gas exploration and production company with operations in western Canada. The Company operates high-impact projects through two business units and a technology subsidiary. Petrobank's 56% owned TSX-listed subsidiary, PetroBakken Energy Ltd. (TSX:PBN), is an oil and gas exploration and production company combining light oil Bakken and Cardium resource plays with conventional light oil assets. Whitesands Insitu Partnership, a partnership between Petrobank and its wholly-owned subsidiary Whitesands Insitu Inc., applies Petrobank's patented THAI(R) heavy oil recovery process in the field. THAI(R) is an evolutionary in-situ combustion technology for the recovery of bitumen and heavy oil. THAI(R) and CAPRI(R) are registered trademarks of Archon Technologies Ltd., a wholly-owned subsidiary of Petrobank Energy and Resources Ltd., for specialized methods for recovery of oil from subterranean formations through in-situ combustion techniques and methodologies with or without upgrading catalysts. Used under license by Petrobank Energy and Resources Ltd. Contacts: Petrobank Energy and Resources Ltd. John D. Wright President and Chief Executive Officer 403.750.4400

Petrobank Energy and Resources Ltd. Chris J. Bloomer Senior Vice President and Chief Operating Officer, Heavy Oil 403.750.4400

Petrobank Energy and Resources Ltd. Peter Cheung Vice President Finance and Chief Financial Officer 403.750.4400 ir@petrobank.com www.petrobank.com

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