Cardium Success Drives 19 % Increase in Reserves as PetroBakken Replaces 315% of 2011 Production

CALGARY, ALBERTA--(Marketwire - Feb. 27, 2012) - PetroBakken Energy Ltd. ("PetroBakken" or the "Company") (TSX:PBN) is pleased to announce the Company's 2011 year-end proved plus probable Company Interest⁽¹⁾ reserves ("Reserves").

• Reserves increased by 19% to 203.5 million barrels of oil equivalent ("MMboe") at December 31, 2011, replacing 2011 production by 315%.
• The average light oil weighting of our Reserves is 80%; 85% when natural gas liquids are included.
• In 2011, PetroBakken delivered finding, development and net acquisition ("FD&A") costs of $18.95/boe excluding changes in Future Development Capital ("FDC"), and $30.74/boe, including changes in FDC.
• The Cardium business unit replaced production by 800% and increased Reserves by 66% in 2011. Incremental Reserve additions in this business unit of 32.7 MMboe resulted in total reserves of 72.2 MMboe at the end of the year.
• The Bakken business unit replaced production by 173% in 2011, and increased Reserves by 7%. The Reserves for the Bakken increased by 12.9 MMboe and at year-end totalled 88.5 MMboe.

RESERVES

Sproule Associates Limited ("Sproule") has completed their evaluation of PetroBakken's Reserves, dated February 24, 2012, effective as of December 31, 2011 ("Sproule Evaluation"). All values are based on Sproule's forecast prices and costs at December 31, 2011 and are Company Interest reserves unless otherwise noted.

Year-end 2011 Reserve results reflect PetroBakken's 19% growth to 203.5 MMboe. Total Reserve additions in 2011 were 54.5 MMboe, prior to revisions and net disposition activity. The net present value of our Reserves, based on Sproule's year-end forecast prices (which incorporates WTI prices through 2014 that are, on average, at least US$10/bbl lower than February 24, 2012 NYMEX strip prices) and a 10% discount rate is $4.7 billion, up 12% from the prior year. Our operating recycle ratio for 2011 was 2.9 times based on FD&A costs of $18.95/boe, excluding FDC. These results were driven primarily by strong performance in the Cardium business unit and continued maturation of our Bakken business unit.

In 2011, the Cardium business unit replaced production by 800% and increased Reserves by 32.7 MMboe to 72.2 MMboe. From 2010 to 2011, we grew our Reserves by 66%, far exceeding Sproule's original forecasts for the area. Reserves from our drilling activity vastly outpaced minor negative revisions of 6.9 MMboe that were booked, the majority of which resulted from reducing Reserves on certain east Pembina Cardium wells to approximately 150,000 boe per well on average.[ I think this reduction was far more severe and incorporated some lost PUDS as well; John my recollection is this accounted for slightly more than half the reduction, 3.8 MMboe, and is based on all undeveloped locations (PUDS + Pas); next biggest reduction was WI changes 1.8 MMboe, then Cardium BU gas 0.6 MMboe and I am not sure how big performance revisions were] In 2011, FD&A costs for this business unit were $14.35/boe, excluding FDC, generating an operating recycle ratio of 4.0 times based on our operating netback for the year. The Cardium business unit will continue to be a key source of growth for PetroBakken with a development drilling inventory of over 650 net locations, of which only 232 net locations have been booked at year-end 2011.

In 2011, we grew the Bakken business unit Reserves by 7% and replaced production by 173%. Net additions were 12.9 MMboe, resulting in total reserves of 88.5 MMboe for the business unit. The Bakken business unit continues to be an accretive play for the Company with average FD&A costs (excluding FDC) of $24.73 per boe,, and an average operating recycle ratio of 2.4 times based on our 2011 operating netback.

PetroBakken had an active program in 2011, drilling 205 net wells with a 99% success rate and realized finding and development ("F&D") costs of $19.66/boe excluding FDC, and $31.22/boe including FDC on our 2011 capital expenditure program (2010: $22.72/boe excluding FDC and $26.11/boe including FDC). Total net capital expenditures in 2011 were $892 million, with $909 million spent on exploration and development activities, $34 million spent on land acquisitions less net dispositions of $52 million. Our F&D per boe costs excluding FDC improved from 2010 to 2011 due to the recognition of additional undeveloped reserves associated with our drilling program, particularly in the Cardium business unit. When FDC is included, our F&D costs per boe increased by about 20% compared to 2010, as industry activity in 2011 drove up drilling and completion costs significantly, resulting in increases to the FDC associated with our historical and future Reserves. The Company's three-year weighted average F&D cost, including expenditures on facilities, land and seismic, is $29.74/boe.

Prior to 2011, we invested a significant portion of our capital in land and acquisitions in order to establish our light oil focused, resource play asset base. While we continue to add to this portfolio, land expenditures and resource capture activities represented a materially smaller portion of our 2011 capital expenditures. As we continue to develop reserves on our established resource plays, we expect our long-term average reserve costs to be in the low $20/boe range assuming, current capital costs.

OPERATIONAL UPDATE

Current production, based on field estimates, is in excess of 49,000 barrels of oil equivalent per day ("boepd"), up from our fourth quarter 2011 average production of approximately 48,000 boepd (86% light oil). Our Bakken business unit is currently producing over 21,250 boepd, while our Cardium business unit production exceeds 17,750 boepd, with the remainder of the production generated by our southeast Saskatchewan Conventional and AB/BC business units. Cardium production growth is temporarily outpacing expansion of our facility infrastructure, which should be alleviated by the end of the first quarter. We continue to execute on our business plan and currently have eleven drilling rigs operating: five within the Cardium business unit of Alberta, five within the Bakken business unit in southeast Saskatchewan and one drilling conventional prospects in southeast Saskatchewan. Drilling activity year to date has resulted in 20 (14 net) wells, with 10 (7 net) wells drilled in the Bakken, 7 (5 net) wells drilled in the Cardium, and 3 (2 net) wells drilled in our Saskatchewan Conventional business unit. We continue to execute according to our initial 2012 capital plan of $700 million, with the anticipation of updated guidance being released in March.

Production in January 2012 was approximately 47,500 barrels boepd based on field estimates. Slightly lower production was primarily due to the anticipated slow down of our drilling program in December, a brief period of cold weather which impacted operations and the disposition of 450 boepd of non-core, primarily gas production in central Alberta, in late December, for gross proceeds of $16 million.

The previously announced sale of our non-core working interest in the southeast Saskatchewan Weyburn unit (approximately a 2% interest) for gross proceeds of $105 million has now closed. The assets disposed of included approximately 580 boepd of production (December 2011 average) and December 31, 2011 Reserves of 5.3 MMboe with approximately $32 million of associated FDC, representing sales proceeds equivalent to $25.85 per boe. Our other recently announced sale of non-core assets in the Bakken business unit for gross proceeds of $427 million represented production of 2,900 boepd in January (based on field estimates) and Reserves of 10.5 MMboe (including FDC of $67 million) for total expected proceeds of $47.13/boe.

PetroBakken Energy Ltd. is an oil and gas exploration and production company combining light oil Bakken and Cardium resource plays with conventional light oil assets, delivering industry leading operating netbacks, strong cash flows and production growth. PetroBakken is applying leading edge technology to a multi-year inventory of Bakken and Cardium light oil development locations, along with a significant inventory of opportunities in the Horn River and Montney gas resource plays in northeast BC. Our strategy is to deliver accretive production and reserves growth, along with an attractive dividend yield.

Forward-Looking Statements.

This press release contains forward-looking statements. More particularly, it contains forward-looking statements concerning potential exploration and development activities, our 2012 capital budget and future finding and development costs. The forward-looking statements are based on certain key expectations and assumptions, including expectations and assumptions concerning the availability of capital, the success of future drilling, completion, recompletion and development activities, the performance of existing wells, the performance of new wells, prevailing commodity prices and economic conditions, the cost and availability of labour and services, the ability to market our production, weather and access to drilling locations.

Although we believe that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; reliance on industry partners, availability of equipment and personnel, uncertainty surrounding timing for drilling and completion activities resulting from weather and other factors; changes in applicable regulatory regimes and health, safety and environmental risks), commodity price and exchange rate fluctuations and general economic conditions. Certain of these risks are set out in more detail in our Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com. There is no representation by PetroBakken 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, PetroBakken 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.

When used in this press release, Boe means a barrel of oil equivalent on the basis of 1 Boe to 6 thousand cubic feet of natural gas. Boe per day means a barrel of oil equivalent per day. Boe's may be misleading, particularly if used in isolation. A Boe conversion ratio of 1 Boe for 6 thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.