Petrobank Reports Q1 2013 Financial Results, Operational Update and Notice of Annual Meeting Webcast

Petrobank Reports Q1 2013 Financial Results, Operational Update and Notice of 
Annual Meeting Webcast 
CALGARY, ALBERTA -- (Marketwired) -- 05/07/13 -- Petrobank Energy and
Resources Ltd. (TSX:PBG) announces our 2013 first quarter financial
and operating results. 
The consolidated financial statements as at and for the three months
ended March 31, 2013 and 2012 represent the operations of the assets
and liabilities transferred to Petrobank pursuant to the corporate
reorganization with PetroBakken Energy Ltd. completed December 31,
2012. These assets and liabilities previously comprised the
'Petrobank Standalone' operating segment in our 2012 financial
This news release includes forward-looking statements and information
within the meaning of applicable securities laws. Readers are advised
to review "Forward-Looking Statements" at the conclusion of this news
release. A full copy of our 2013 First Quarter Financial Statements
and MD&A have been filed on our website at and
under our profile on SEDAR at 
In this report, quarterly comparisons are first quarter 2013 compared
to first quarter 2012 unless otherwise noted. All financial figures
are unaudited and in Canadian dollars ($) unless otherwise noted. 
Q1 2013 Financial and Operating Highlights 

--  Average production at our Kerrobert THAI(R) project was 205 barrels of
    oil per day ("bopd") in Q1 2013, a decrease from 307 bopd in Q4 2012 and
    a small increase over 193 bopd in Q1 2012. Kerrobert THAI(R) production
    averaged 200 bopd in April 2013 based on field estimates. 
--  Petrobank reported expenditures on exploration and evaluation assets of
    $8.4 million in Q1 2013 compared to $17.5 million in Q1 2012. This
    decrease is due to the elimination of expenditures related to our
    Conklin and May River properties which were sold on February 28, 2012,
    and a reduction in capitalized costs related to our Kerrobert project. 
--  We purchased over 30,000 acres of land prospective for heavy oil
    resources in two Saskatchewan Crown land sales for approximately $2
    million, adding to our suite of prospects. 
--  We invested approximately $40 million of cash to purchase debt and
    equity securities of PetroBakken, each earning in excess of an 8% cash-
    on-cash yield. We now hold approximately 3.2 million PetroBakken shares,
    including shares received through reinvestment of dividends.

Kerrobert THAI(R) Project and Kerrobert Conventional Cold Production
First quarter 2013 production averaged 205 bopd, a decrease from Q4
2012 production of 307 bopd and a small increase over 193 bopd in the
first quarter of 2012. April 2013 production was 200 bopd based on
field estimates. The decrease in production from Q4 2012 was due to
several of our better producing wells being temporarily off line and
longer than expected workovers due to extremely cold winter
At our Kerrobert THAI(R) project, our operating focus is to continue
to significantly increase air injection and optimize operations for
higher production at lower per-barrel costs. Since beginning to
increase air injection in the fourth quarter of 2012, we have
increased the field air injection rate to up to 25% of design
capacity. Although Q1 production at our Kerrobert THAI(R) project has
not changed much year-over-year, we are still encouraged by the
THAI(R) process. The fact remains: in all our THAI(R) projects, air
injection into the reservoir results in production of hot, upgraded
oil, which proves that the process is working. We have not observed
any irregularities in the quality of our oil or our produced gas or
experienced any surface facility issues that would suggest to us that
we cannot achieve commercial levels of production. As with most
extraction processes, there is a period of optimization whereby
operational issues must be resolved in order to increase production
and lower costs. We are in this period of optimization and have not
experienced any operational issues that cannot be resolved with
tested oil production techniques. Since the beginning of the year, we
have converted two wells from pumps to gas lift which reduces
workover costs, allows for more gas production and results in less
downtime. We are assessing other wells for conversion to gas lift as
conditions dictate. We are also conducting a wet combustion test in
our East injection pad through the co-injection of water into several
injection wells. The purpose of the water injection is to help
redirect the air in the reservoir to optimize the combustion zone.
Petrobank continues to evaluate the implementation of several other
strategies designed to increase production. 
Petrobank currently has two conventional cold production wells
operating on our Kerrobert Trend Lands. These wells are currently
producing an aggregate of approximately 50 bopd. Our conventional
cold production initiative was undertaken through low cost
re-activations and conversions of existing wells on Petrobank lands.
Each well is assessed individually and will continue to operate only
if we believe that it will produce economic amounts of oil. 
Dawson Demonstration Project 
At Dawson, we commenced cold production operations from both
horizontal THAI(R) production wells in late 2012 and the wells
produced at a combined rate of approximately 20 bopd in the first
quarter of 2013. These wells will continue to produce conventional
heavy oil, and assist in pre-conditioning the reservoir until such
time as we commence the start-up of the approved THAI(R)
demonstration project. 
Land Acquisition 
In early 2013, we purchased over 30,000 acres of land in two
Saskatchewan Crown land sales for approximately $2 million. At
year-end 2012, our lands contained over 500 million barrels of
Exploitable Oil and Bitumen Initially in Place (see definition below)
and the addition of these new lands will further enhance our
inventory of opportunities for new THAI(R) and conventional heavy oil
projects. We now own approximately 85 sections of land in
Saskatchewan and 31 sections of land at Dawson, Alberta. 
At March 31, 2013, Petrobank had cash and cash equivalents of $38.5
million, investments in marketable securities of $47.7 million and a
net working capital surplus (including cash and marketable
securities) of $79.2 million. Our focus in 2013 is to steward our
capital to maintain financial flexibility to pursue future THAI(R)
projects and acquisition opportunities while positioning the company
to benefit from our strong capital base. We expect to fund our 2013
expenditures with cash on hand and sales revenue from production. 
The following table provides a summary of Petrobank's financial
results for the three months ending March 31, 2013 and 2012.
Unaudited consolidated financial statements with MD&A will be
available on the Company's website at and on the
SEDAR website at 

Three months ended March 31,                        2013      2012 % Change 
Financial ($000s except where noted)                                        
  Net (loss) income                               (3,008)   46,291        - 
    Per share - basic and diluted ($)              (0.03)     0.47        - 
  Expenditures on exploration assets               8,422    17,506      (52)
  Total assets                                   155,183   346,194      (55)
  Common shares outstanding, end of period                                  
    Basic and diluted (1)                         97,597    97,597        - 

(1) Since Petrobank shares were issued pursuant to a Plan of
Arrangement, the 2012 per share amounts are based on the number of
shares outstanding on December 31, 2012. 
Petrobank's annual meeting of shareholders is scheduled for
Wednesday, May 22, 2013 at 2:00 p.m. Mountain Time (4:00 p.m. Eastern
Time) at the TELUS Convention Centre, Macleod Hall D, 120 - 9th
Avenue S.E., Calgary, Alberta, T2G 0P3. 
Management of Petrobank plans to provide an investor update
immediately following the formal shareholders' meeting. The full
meeting and investor update is available via webcast at the following
and is also available on our website at: We will
welcome questions from shareholders in attendance at the meeting and
through the webcast immediately following the presentation. 
Petrobank Energy and Resources Ltd. is a Calgary-based oil and
natural gas exploration and production company with operations in
western Canada. Petrobank is applying its 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. 
Exploitable Oil/Bitumen Initially In Place: Exploitable Oil/Bitumen
Initially in Place is the estimated discovered volume of oil or
bitumen, as applicable, from known accumulations, before any
production has been removed, which is contained in a subsurface
stratigraphic interval that meets or exceeds certain reservoir
characteristics considered necessary for the application of known
recovery technologies. Examples of such reservoir characteristics
include continuous net pay, porosity, and mass bitumen content.
Exploitable Oil/Bitumen Initially in Place are resources that do not
constitute, and should not be confused with, reserves. There is no
certainty that it will be commercially viable to produce any portion
of the resource.  
Forward-Looking Statements: Certain information provided in this
press release constitutes forward-looking statements. Specifically,
this press release contains forward-looking statements relating to
financial results, results from operations, the timing of certain
projects, and anticipated sources of available financing.
Forward-looking statements are necessarily based on a number of
assumptions and judgments, including but not limited to, assumptions
relating to the outlook for commodity and capital markets, the
success of future resource evaluation and development activities, the
successful application of our technology, the performance of
producing wells and reservoirs, well development and operating
performance, general economic 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; weather conditions and access to our
properties; fluctuations in oil prices; the results of exploration
and development drilling, recompletions and related activities;
timing and rig availability; outcome of exploration contract
negotiations; fluctuation in foreign currency exchange rates; the
uncertainty of reserve estimates; changes in environmental and other
regulations; uncertainties associated with the regulatory review and
approval process in respect to our projects; risks associated with
the application of early stage technology; 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 forecasted. 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.
John D. Wright
Chairman and Chief Executive Officer
Petrobank Energy and Resources Ltd.
Peter Cheung
Vice President Finance and Chief Financial Officer
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