Chinook Energy Inc. Announces its December 31, 2011 Reserves and Updated 2012 Guidance

CALGARY, ALBERTA--(Marketwire - Feb. 26, 2012) - Chinook Energy Inc. ("Chinook" or the "Company") (TSX:CKE) today announced the results of its year-end reserve evaluations effective December 31, 2011 as prepared by its independent evaluators. The Company has also provided certain unaudited year end financial information and an update to previously provided guidance for 2012 resulting from adjustments to the capital program in response to natural gas prices and asset dispositions.

Chinook's audit of its 2011 annual consolidated financial statements is not yet complete and accordingly all financial amounts referred to in this news release are unaudited and represent management's estimates. Readers are advised that these financial estimates are subject to audit and may be subject to change as a result.

2011 Reserves Highlights

Three evaluators, which were largely responsible for the previous evaluations of the same assets, have evaluated all of Chinook's crude oil, NGL and natural gas reserves in accordance with National Instrument 51-101. Chinook's Reserves Committee and Board of Directors have reviewed and approved the evaluations prepared by the evaluators. Highlights of such evaluations are as follows:

• Proved reserves totaled 32.2 million barrels of oil equivalent. The proved reserve life index ("RLI") is 5.8 years using fourth quarter 2011 production.
• Proved plus probable reserves totaled 55.8 million barrels of oil equivalent. The proved plus probable RLI is 10 years using fourth quarter 2011 production.
• Proved plus Probable reserves are down 11% from 2010. Assets representing 6.7% of the 2010 reserves were sold during the year and Economic Factors and Technical Revisions represented a 5.8% decline from 2010 reserve levels. 2011 reserve additions from drilling exceeded production by 15%.
• The proved finding and development cost, as per NI 51-101 requirements, was $54.45 per barrel of oil equivalent and the proved plus probable finding and development cost, as per NI 51-101 requirements, was $54.53 per barrel of oil equivalent. The change in future development costs ("FDC") and revisions were included in the calculation and the effect of acquisitions and divestitures was excluded.
• The net asset value amounted to $773.5 million which results in the estimated net asset value per basic share (214.2 million shares) at December 31, 2011, being $3.61 per share based on the net present value of proved and probable reserves, discounted at 10% after tax and after deducting year end total net debt and adding an estimated value for undeveloped land in Canada. On a before tax basis, with a similar 10% discount rate, the net asset value is $1.1 billion or $5.03 per basic share.
• Commodity prices used in the independent evaluation were down approximately 13% for natural gas which represents 49% of the corporate reserve volumes and up approximately 11% for the slate of liquids which represent 51% of the corporate reserve volumes.
• The present value of reserves, and the NAV per share, was largely unchanged from 2010 as the decrease in reserve volumes and natural gas pricing attributable to the natural gas-weighted assets in Canada was offset almost entirely by increased value in the Tunisian oil-weighted assets.
• Gross Discovered Petroleum Initially in Place ("DPIIP") associated with the Bir Ben Tartar (TT) discovery on the Sud Remada permit in Tunisia, after the addition of five development wells in 2011, is estimated to be 153.7 million barrels of oil. Proven and probable reserves net to the Company of 3.4 million barrels of oil represents the Company's 46% Contractor's share of the 7.3 million barrels of oil remaining recoverable. Proven and probable reserves have been assigned to areas representing 40% of the DPIIP up to a 13 percent recovery, or an average of 5% recovery for the entire structure. An additional 2.0 million barrels of oil of possible reserves and a Best Case Contingent Resource of 6.8 million barrels net to the Company's interest is attributable to the DPIIP area to which 2P reserves have not been assigned up to the date of evaluation. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will exceed the sum of proved plus probable reserves. On this basis, 28% of the reserve and resource potential recognized on the block is reflected in the Company's NI 51-101 reserves and net asset value. The net present value after tax discounted at 10% for the proved plus probable reserves is $139 million or $41.00 per barrel.
• The Company established a recycle ratio on a proven plus probable reserve basis, before commodity price contracts, and using NI 51-101 finding and development costs, of 0.4 times in Canada and 0.8 times in Tunisia.
• Chinook has 28 gross sections of Bitumen rights in the Portage/Thornbury area of NE Alberta proximal to pilot projects being initiated by other operators. An initial evaluation of the Company's bitumen assets has identified Best Case Company Share of Exploitable Bitumen in Place of 271 mboe and Best Case Contingent Resource of 102.6 mboe in the McMurray and Grande Rapids Formations net to the Company's 74.55% working interest.

2011 Operational Highlights and Unaudited Full Year Results

Chinook's average daily production for fiscal 2011 was 14,602 barrels of oil equivalent per day. Production for the last half of 2011 was 14,780 barrels of oil equivalent per day and for the fourth quarter was 15,118 barrels of oil equivalent per day. Projected cash flow from operations (before changes in non-cash working capital) for 2011 is estimated at $84.9 million or $0.40 per weighted average basic common share outstanding (unaudited). Year end 2011 net debt is $135 million.

The Canadian business focused on crude oil project development in the core areas of West Central Alberta and Grande Prairie and the sale of non-core assets to improve the ratio of growth assets in the remaining domestic asset base and improve the boe meterics. The Tunisian business focused on the conversion of probable reserves to proven producing and an initial ramp up in production at the Bir Ben Tartar discovery. Tunisian production grew 150% and 2011 was the Company's most active year ever against a backdrop of the Arab spring revolution, a year of civil unrest, and the introduction of a new political system. The corporate drilling program consisted of 43 (26.84 net) wells of which 34 were operated and 9 were non-operated wells. The results are outlined in the table below:

Wells Drilled
Year ended December 31, 2011		Tunisia				Canada				Total
		Gross		Net		Gross		Net		Gross		Net
Exploration
	Oil	2.00		0.15		10 00		5.28		12.00		5.43
	Gas	-		-		5.00		4.00		5.00		4.00
	Dry	-		-		-		-		-		-
		2.00		0.15		15.00		9.28		17.00		9.43
Development
	Oil	6.00		5.16		15.00		8.52		21.00		13.68
	Gas	-		-		5.00		3.73		5.00		3.73
	Dry	-		-		-		-		-		-
		6.00		5.16		20.00		12.25		26.00		17.41
Total		8.00		5.31		35.00		21.53		43.00		26.84

Revised Guidance

As a result of the continuing downward pressure on the North American natural gas price and the completion of two disposition transactions, it is appropriate to revise the guidance for 2012 from the initial 2012 budget which was prepared in November 2011.

On the basis of current natural gas prices not covering fixed and variable costs and an adequate return on the depletion of certain assets, the Company has shut in a large portion of its Northeast Alberta shallow dry natural gas production which represents approximately 430 boe/d included in the initial 2012 forecast. In addition, given current AECO spot prices, the natural gas price used in the forecast has been adjusted from $3.74/mcf to $2.70/mcf.

Given the near term forecast for natural gas prices the Company has deferred approximately $10 million worth of capital from the Canadian capital program with an effect of eliminating approximately 225 boe/d of volumes previously included in the 2012 forecast.

On February 15, 2012, Chinook closed the previously announced disposition of its Manyberries property, located in southeastern Alberta, to the City of Medicine Hat for consideration of approximately $36.2 million. Chinook has also reached an agreement to sell a package of unit interests for $20 million, subject to normal closing adjustments, with an expected closing date of March 15, 2012. Chinook's current bank debt subsequent to the closing of the Manyberries property disposition is $101 million. The Company intends to use the proceeds from the disposition of the unit interests to further reduce debt such that it expects debt to be approximately $80 million after the completion of the sale, prior to factoring in Q1 2012 capital expenditures which are expected to exceed quarterly cash flow by $15-20 million. The production adjustment to previous 2012 guidance as a result of these two 2012 transactions, and two transactions that closed in December 2011 (after previous guidance was released) is an average reduction of 830 boe/d.

The Company will also reduce the capital program in Tunisia by $15 million in an attempt to better manage the balance sheet early in the year. This will be accomplished with an expected one quarter delay in the commencement of the central facility and pipeline projects but will not effect forecast production.

($ millions)	Revised Guidance(1	)	Previous Guidance(2	)
Production (boe/d)	13,500-14,000		15,000-15,400
Cash flow	$120 - 125		$135 - 140
Capital expenditures	$165		$190
Net debt (year end 2012)	$120 - 125		$180 - 190
Debt facility	$182		$194
Net operating expenses ($/boe)	$16.53		$17.50
G&A expense ($/boe)	$2.80		$2.50
Cash flow per share (fully diluted)	$0.54		$0.61

Notes:

1. Revised guidance is based on: AECO gas price of $2.70/mcf; Edmonton light oil price of $96.20/bbl (CDN); Brent oil price of $104.00/bbl (CAD); 55% natural gas production; 45% liquids.
2. Previous guidance was based on: AECO gas price of $3.74/mcf; Edmonton light oil price of $95.00/bbl (CDN); Brent oil price of $104.00/bbl (CAD); 55% natural gas production; 45% liquids.

Asset sales and natural gas price related technical revisions were key contributors to decreasing reserves in Canada. The increased value of the light oil assets in Tunisia supported the Net Asset Value being unchanged from year end 2010. Chinook's balance sheet is in very good shape and able to support the forecast capital program of 1.3 times cash flow which will be focused on developing Chinook's Brent priced oil production in Tunisia. In Canada, the Company will continue to work to improve the netbacks of its domestic natural gas weighted production, focus capital on oil prospects, and dispose of assets as it has successfully done over the last 15 months.

2011 Independent Reserves Evaluation

The independent evaluators of the Company's year-end reserves are as follows:

• McDaniel & Associates Consultants Ltd. ("McDaniel") evaluated all of the Canadian properties effective December 31, 2011 and report dated February 27, 2012;
• InSite Petroleum Consultants Ltd. ("InSite") evaluated all of the Tunisia interests, except Cosmos effective December 31, 2011 and report dated February 24, 2012; and
• Sproule International Limited ("Sproule") evaluated Cosmos in Tunisia effective December 31, 2011 and report dated January 30, 2012.

The independent reserve evaluations effective December 31, 2011 were prepared in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and National Instrument 51-101 ("NI 51-101"). The reserve evaluation was based on McDaniel forecast pricing and foreign exchange rates at December 31, 2011.

Reserves included herein are stated on a company gross basis (working interest before deduction of royalties without including any royalty interests) unless noted otherwise. This news release contains several cautionary statements that are specifically required by NI 51-101 under the heading "Reader Advisory" and throughout the release. In addition to the information contained in this news release more detailed information will be included in Chinook's Annual Information Form for the year ended December 31, 2011 ("AIF"), which will be filed on SEDAR at www.sedar.com on or before March 30, 2012.

Reserves Breakdown (Company interest before royalties) (1)

(December 31, 2011, escalated price forecast)

(mboe)	2011		2010
Proved Producing
Canada	20,906		26,224
Tunisia	1,294		555
Total proved producing	22,200		26,780
Proved
Canada	25,227		31,283
Tunisia	6,940		6,133
Total proved	32,167		37,416
Proved Plus Probable Additional
Canada	38,995		45,803
Tunisia	16,816		16,655
Total proved plus probable additional	55,811		62,459

Note: (1) Columns may not add due to rounding.

Gross and Net Company Interest Reserves as at December 31, 2011

The following table summarizes the Company's gross and net interest reserve volumes utilizing McDaniel's forecast pricing and cost estimates at December 31, 2011.

		Light and medium oil				Heavy oil				Natural Gas					Natural gas liquids				Oil equivalent (6:1)
Reserves category		Gross (1) (mbbl	)	Net (2) (mbbl	)	Gross (1) (mbbl	)	Net (2) (mbbl	)	Gross (1) (mmcf	)	Net (2) (mmcf	)		Gross(1) (mbbl	)	Net (2) (mbbl	)	Gross (1) (mboe	)	Net (2) (mboe	)
Canada
Proved
	Developed producing	4,648		3,931		154		149		83,241		69,332			2,231		1,613		20,906		17,249
	Developed non-producing	780		663		40		37		11,277		9,493			181		134		2,880		2,417
	Undeveloped	468		403		-		-		5,010		3,970			138		109		1,441		1,174
Total proved		5,895		4,997		194		186		99,527		82,796			2,550		1,857		25,227		20,840
Probable additional		2,962		2,404		66		63		56,405		45,768			1,340		965		13,769		11,060
Total proved plus probable		8,857		7,402		260		249		155,931		128,564			3,890		2,821		38,995		31,900
Tunisia
Proved
	Developed producing	1,105		1,048		-		-		1,131		1,029			-		-		1,294		1,219
	Developed non-producing	434		397		-		-		2,274		2,074			-		-		813		742
	Undeveloped	4,503		4,152		-		-		1,358		1,322			-		-		4,834		4,456
Total proved		6,042		5,596		-		-		4,763		4,425			-		-		6,940		6,417
Probable additional		9,526		8,387		-		-		2,727		2,387			-		-		9,876		8,701
Total proved plus probable		15,568		13,983		-		-		7,490		6,812			-		-		16,816		15,118
Total company
Proved
	Developed producing	5,753		4,979		154		149		84,372		70,362			2,331		1,613		22,200		18,468
	Developed non-producing	1,213		1,060		40		37		13,550		11,567			181		134		3,692		3,159
	Undeveloped	4,971		4,555		-		-		6,368		5,292			138		109		6,275		5,630
Total proved		11,937		10,594		194		186		104,290		87,221			2,550		1,857		32,167		27,257
Probable additional		12,488		10,791		66		63		59,132		48,155			1,340		965		23,644		19,761
Total proved plus probable		24,425		21,385		260		249		163,421		135,376			3,890		2,821		55,811		47,018

Notes:

1. Gross reserves are the company's working interest reserves before royalty deductions and do not include royalty interest volumes.
2. Net reserves are after royalty deductions and include royalty interest volumes.

Gross Company Reserve Reconciliation for 2011 (1)

(Gross company interest reserves before deduction of royalties payable)

	6:1 Oil Equivalent (mboe)
	Total Proved		Probable		Proved Plus Probable
December 31, 2010 - opening balance	37,415		25,044		62,459
Additions and extensions	2,840		3,272		6,112
Improved performance	-		-		-
Discoveries	273		95		368
Acquisitions	-		-		-
Dispositions	(2,596	)	(1,605	)	(4,200	)
Technical revisions	701		(3,145	)	(2,444	)
Economic factors	(1,141	)	(18	)	(1,159	)
Production	(5,324	)	-		(5,324	)
December 31, 2011 - closing balance	32,167		23,644		55,811

Note: (1) Columns may not add due to rounding.

Consolidated

Net Present Value ("NPV") Summary (before tax) as at December 31, 2011

(December 31, 2011, escalated price forecast)

Benchmark oil and NGL prices used are adjusted for quality of oil or NGL produced and for transportation costs. The calculated NPVs include a deduction for estimated future well abandonment but does not include a provision for interest, debt service charges and general and administrative expenses. It should not be assumed that the NPV estimated represents the fair market value of the reserves.

($ thousands)	Undiscounted	Discounted at 5	%	Discounted at 10	%	Discounted at 15	%	Discounted at 20	%
Proved producing	556,191	458,4356		393,751		347,502		312,702
Proved non-producing	116,845	90,562		73,293		61,163		52,201
Total proved developed	673,035	548,997		467,044		408,665		364,903
Proved undeveloped	236,834	190,527		155,656		128,486		106,803
Total proved	909,869	739,524		622,700		537,151		471,706
Probable additional	1,014,038	722,284		544,496		426,004		342,459
Total proved plus probable	1,923,907	1,461,808		1,167,196		963,154		814,165

Canada

Net Present Value Summary (before tax) as at December 31, 2011

(December 31, 2011, escalated price forecast)

($ thousands)	Undiscounted	Discounted at 5	%	Discounted at 10	%	Discounted at 15	%	Discounted at 20	%
Proved producing	468,820	378,214		319,286		277,759		246,898
Proved non-producing	67,193	50,613		40,369		33,448		28,450
Total proved developed	536,014	428,827		359,655		311,206		275,348
Proved undeveloped	33,962	25,828		20,160		16,029		12,919
Total proved	569,975	454,655		379,815		327,236		288,266
Probable additional	359,780	223,928		155,167		115,201		89,687
Total proved plus probable	929,755	678,583		534,982		442,436		377,954

Tunisia

Net Present Value Summary (before tax) as at December 31, 2011

(December 31, 2011, escalated price forecast)

($ thousands)	Undiscounted	Discounted at 5	%	Discounted at 10	%	Discounted at 15	%	Discounted at 20	%
Proved producing	87,371	80,222		74,465		69,743		65,804
Proved non-producing	49,651	39,949		32,924		27,715		23,752
Total proved developed	137,022	120,170		107,388		97,459		89,555
Proved undeveloped	202,872	164,700		135,497		112,456		93,885
Total proved	339,894	284,870		242,885		209,915		183,440
Probable additional	654,259	498,355		389,329		310,803		252,772
Total proved plus probable	994,153	783,225		632,214		520,718		436,211

Consolidated

Net Present Value Summary (after tax) as at December 31, 2011

(December 31, 2011, escalated price forecast)

The after-tax NPV of Chinook's oil and natural gas properties reflects the tax burden on the properties on a stand-alone basis and does not consider the business-entity-level tax situation, or tax planning. It does not provide an estimate of the value at the level of the business entity, which may be significantly different. The financial statements and the management's discussion and analysis ("MD&A") of Chinook should be consulted for information at the level of the business entity.

($ thousands)	Undiscounted	Discounted at 5	%	Discounted at 10	%	Discounted at 15	%	Discounted at 20	%
Proved producing	543,337	447,679		384,494		339,356		305,401
Proved non-producing	87,566	69,329		56,993		48,100		41,385
Total proved developed	630,902	517,007		441,487		387,456		346,787
Proved undeveloped	163,670	130,458		105,073		85,118		69,118
Total proved	794,572	647,465		546,560		472,574		415,905
Probable additional	601,009	421,960		316,340		247,324		199,212
Total proved plus probable	1,395,581	1,069,425		862,899		719,897		615,117

Canada

Net Present Value Summary (after tax) as at December 31, 2011

(December 31, 2011, escalated price forecast)

($ thousands)	Undiscounted	Discounted at 5	%	Discounted at 10	%	Discounted at 15	%	Discounted at 20	%
Proved producing	468,820	378,214		319,286		277,759		246,898
Proved non-producing	60,222	46,956		38,360		32,300		27,772
Total proved developed	529,042	425,170		357,646		310,059		274,670
Proved undeveloped	25,419	20,171		16,317		13,362		11,032
Total proved	554,461	445,340		373,963		323,421		285,702
Probable additional	270,556	169,028		118,110		88,646		69,853
Total proved plus probable	825,018	614,368		492,074		412,066		355,555

Tunisia

Net Present Value Summary (after tax) as at December 31, 2011

(December 31, 2011, escalated price forecast)

($ thousands)	Undiscounted	Discounted at 5	%	Discounted at 10	%	Discounted at 15	%	Discounted at 20	%
Proved producing	74,516	69,465		65,208		61,597		58,503
Proved non-producing	27,344	22,373		18,633		15,800		13,613
Total proved developed	101,860	91,838		83,841		77,397		72,117
Proved undeveloped	138,251	110,288		88,756		71,756		58,086
Total proved	240,111	202,125		172,596		149,153		130,203
Probable additional	330,453	252,931		198,230		158,678		129,359
Total proved plus probable	570,563	455,056		370,826		307,831		259,562

McDaniel & Associates Consultants Ltd. Escalating Price Forecast as at December 31, 2011 (1)

	WTI Crude Oil (US$/bbl	)	Brent (US$/bbl	)	Edmonton Light Crude Oil (Cdn$/bbl	)	Henry Hub Natural Gas (US$/mmbtu	)	AECO Natural Gas (Cdn$/mmbtu	)		Edmonton Condensate and Natural Gasoline (Cdn$/bbl	)	Propane (Cdn$/bbl	)	Butane (Cdn$/bbl	)	US/Cdn Exchange (US$/Cdn	)
2012	97.50		107.50		99.00		3.75		3.50			106.00		54.60		76.20		0.975
2013	97.50		102.60		99.00		4.50		4.20			104.10		56.40		79.80		0.975
2014	100.00		102.60		101.50		5.05		4.70			104.60		58.90		81.80		0.975
2015	100.80		103.50		102.30		5.50		5.10			105.50		60.40		82.40		0.975
2016	101.70		104.40		103.20		5.95		5.55			106.40		62.00		83.20		0.975
	99.50		104.12		101.00		4.95		4.61			105.32		58.46		80.68		0.975

Note: (1) Prices escalate at two percent per year after 2016.

Future Development Costs ("FDC")

NI 51-101 requires that future development costs be calculated including changes in FDC. Changes in forecast FDC occur annually as a result of development activities, acquisition and disposition activities and capital cost estimates that reflect the independent evaluators' best estimate of what it will cost to bring the proved undeveloped and probable reserves on production.

($ millions)
		2011		2010
Proved
	Canada	27.4		37.4
	Tunisia	158.6		131.1
Total proved		186.0		168.6
Proved Plus Probable
	Canada	60.4		59.3
	Tunisia	301.0		278.5
Total proved plus probable		361.4		337.8

Chinook's approved 2012 budget includes the drilling of 31 wells (20.5 net) in Canada and 17 wells (10.6 net) in Tunisia.

NI 51-101 Finding and Development Costs ("F&D")

Total Proved Finding and Development Cost($ thousands, except per unit amounts)	2011	2010	Two year total
Capital expenditures excluding acquisitions and dispositions,abandonment and furniture and fixtures (unaudited)	124,981	45,861	170,842
Net change from previously allocated future development capital	20,471	19,107	39,578
Total capital including the net change in future capital	145,452	64,968	210,420
Reserve additions excluding acquisitions and dispositions (mboe)	2,671	2,404	5,075
Total proved finding and development costs (per boe)	54.45	27.02	41.46
Total Proved Plus Probable Finding and Development Cost($ thousands, except per unit amounts)	2011	2010	Two year total
Capital expenditures excluding acquisitions and dispositions,abandonment and furniture and fixtures (unaudited)	124,981	44,994	169,975
Net change from previously allocated future development capital	31,893	30,026	61,919
Total capital including the net change in future capital	156,874	75,020	231,894
Reserve additions excluding acquisitions and dispositions(mboe)	2,877	4,090	6,967
Total proved plus probable finding and development costs (per boe)	54.53	18.34	33.28

Finding and Development Costs ("F&D")

Total Proved Finding and Development Cost Including FDC, excluding Acquisitions, Dispositions, Revisions, and Economic Factors($ thousands, except per unit amounts)	2011	2010	Two year total
Capital expenditures excluding acquisitions and dispositionsabandonment and furniture and fixtures (unaudited) (1)	124,981	59,139	184,120
Net change from previously allocated future development capital	12,685	4,782	17,467
Total capital including the net change in future capital	137,666	63,921	201,587
Reserve additions including acquisitions, dispositions and revisions (mboe)	3,942	2,353	6,295
All-in total proved finding and development costs (per boe)	34.92	27.17	32.02

Note: (1) Excludes non-cash costs, including Asset Retirement Obligations.

Total Proved Plus Probable Finding and Development Cost Including FDC, excluding Acquisitions, Dispositions, Revisions, and Economic Factors($ thousands, except per unit amounts)	2011	2010	Two year total
Capital expenditures excluding acquisitions and dispositions,abandonment and furniture and fixtures (unaudited) (1)	124,981	59,139	184,120
Net change from previously allocated future development capital	39,390	9,232	48,622
Total capital including the net change in future capital	164,371	68,371	232,742
Reserve additions including acquisitions, dispositions and revisions (mboe)	6,480	3,654	10,134
All-in total proved plus probable finding and development costs (per boe)	25.37	18.71	22.97

Note: (1) Excludes non-cash costs, including Asset Retirement Obligations.

Total exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs, generally will not reflect the total cost of reserve additions in that year.

Recycle Ratio

The recycle ratio is calculated as the fourth quarter netback per barrel divided by the finding and development costs (excluding acquisitions and dispositions, abandonment and furniture and fixtures). It is a measure of the profitability and efficiency of the Company.

Total Proved	Consolidated	Canada	Tunisia
Operating netback before commodity price contracts ($/boe) (unaudited) (1)	23.15	15.69	83.92
51-101 F&D costs ($/boe) (unaudited)	54.45	55.01	53.77
Recycle ratio	0.4x	0.3x	1.6x
Total Proved Plus Probable	Consolidated	Canada	Tunisia
Operating netback before commodity price contracts ($/boe) (unaudited) (1)	23.15	15.69	83.92
51-101 F&D costs ($/boe) (unaudited)	54.53	41.80	107.10
Recycle ratio	0.4x	0.4x	0.8x

Note: (1) Operating netback is calculated by deducting royalties and production expenses from revenue.

Corporate Net Asset Value

The Company's net asset value as of December 31, 2011, is detailed in the following table. This net asset value determination is a "point-in-time" measurement and does not take into account the possibility of Chinook being able to recognize additional reserves through successful future capital investment in its existing properties beyond those included in the 2011 year-end reserve reports.

December 31, 2011	Before Tax NPV 5%				Before Tax NPV 10%					Before Tax NPV 15%
	($ thousands	)	$/share		($ thousands	)	$/share			($ thousands	)	$/share
Proved plus probable reserves NPV(1,2)	1,461,807		6.82		1,167,195		5.45			963,155		4.50
Undeveloped acreage(3)	45,484		0.21		45,484		0.21			45,484		0.21
Net debt(4)	(134,931	)	(0.63	)	(134,931	)	(0.63	)		(134,931	)	(0.63	)
Net asset value (basic)(5)	1,372,361		6.41		1,077,749		5.03			873,708		4.08

December 31, 2011	After Tax NPV 5%				After Tax NPV 10%					After Tax NPV 15%
	($ thousands	)	$/share		($ thousands	)	$/share			($ thousands	)	$/share
Proved plus probable reserves NPV(1,2)	1,069,425		4.99		862,900		4.03			719,897		3.36
Undeveloped acreage(3)	45,484		0.21		45,484		0.21			45,484		0.21
Net debt(4)	(134,931	)	(0.63	)	(134,931	)	(0.63	)		(134,931	)	(0.63	)
Net asset value (basic)(5)	979,979		4.58		773,453		3.61			630,451		2.91

Notes:

1. Evaluated by independent reserve evaluators as at December 31, 2011. Net present value of future net revenue does not represent the fair market value of the reserves.
2. Net present values for before and after tax are based on McDaniel's December 31, 2011 escalated price forecast.
3. Undeveloped land value has been calculated based on internal estimates of $100/acre for all Canadian lands.
4. Net debt as at December 31, 2011, including working capital deficit (estimated and unaudited).
5. Basic shares at December 31, 2011 total 214,187,681 common shares.

Chinook's audited consolidated financial statements and its annual information form for the year ended December 31, 2011, which will include more detailed reserves information, are expected to be filed on SEDAR (www.sedar.com) on or about March 22, 2012.

Bir Ben Tartar - Discovered Petroleum Initially-in-Place

Insite assigned 153.7 million barrels of Discovered Petroleum Initially-In-Place to the Bir Ben Tartar (TT) discovery.

DPIIP is the quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of DPIIP is divided into commercial (reserves), and sub-commercial (Contingent Resources); the remainder is by definition unrecoverable. Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies.

Contingencies in respect of the Bir Ben Tartar (TT) discovery that prevent such Contingent Resources to be classified as reserves include the lack of a reasonable expectation that all internal and external approvals will be forthcoming to fully develop the asset, further reservoir studies, delineation drilling, facility design, preparation of firm development plans and regulatory applications. Other commercial considerations that may preclude the classification of contingent resources as reserves include factors such as legal, environmental, political and regulatory matters or a lack of markets. Estimates of DPIIP and Contingent Resources described herein are estimates only; the actual resources may be higher or lower than those calculated in Insite's report. There is no certainty that it will be commercially viable to produce any portion of the resources described herein.

The most significant positive and negative factors with respect to the Contingent Resource estimates in respect of the Bir Ben Tartar (TT) discovery relate to fact that the field is currently at an evaluation/delineation stage.

The table below summarizes the DPIIP, Reserves, Cumulative Production, Contingent Resources and portion of the unrecoverable portion of DPIIP associated with the Bir Ben Tartar (TT) discovery.

Category	MBbls
DPIIP	157,300
Gross Proved + Probable Reserves	3,360.8
Cumulative Production	458.8
Contingent Resource (Best Estimate)	6,800.6
Unrecoverable DPIIP	128,900

Alberta Oil Sands - Exploitable Bitumen in Place

The table below reflects the Company's Contingent Bitumen Resources as of December 31, 2011, as evaluated by McDaniel reflected the Company's 74.55% working interest in its oil sands leases in the Portage and Thornbury areas of Alberta.

Actual resources may be greater than or less than the estimates provided herein. Contingent Resources can be sub-classified into economic and uneconomic factors based on a number of assumptions such as capital costs, timing, price forecasts and other considerations. Currently sub-classification of these estimates has not been completed pending a determination of the above parameters. The contingencies which currently prevent the classification of the Contingent Resources disclosed in the tables below as reserves consist of: further reservoir studies, delineation drilling, facility design, preparation of firm development plans, regulatory applications and corporate approvals. There is no certainty that it will be commercially viable for the Corporation to produce any portion of the Contingent Resources on any of its properties. The most significant positive and negative factors with respect to the Contingent Resource estimates relates to the fact that property is currently at an evaluation/delineation stage.

The information provided hereunder for Thornbury is based on an evaluation conducted by McDaniel effective December 31, 2011. The information provided hereunder for Portage is based on an evaluation conducted by McDaniel effective June 1, 2010. McDaniel carried out the evaluations in accordance with standards established by the Canadian Securities Administrators in NI 51-101.

Contingent Resources - Thornbury Oil Sands
Volumes (mboe)	Gross		Net
High	74,738		61,044
Best	46,285		39,674
Low	30,835		27,490
Contingent Resources - Portage Oil Sands
Volumes (mboe)	Gross		Net
High	90,173		73,251
Best	56,333		48,379
Low	40,609		36,449
Contingent Resources - Portage & Thornbury Oil Sands
Volumes (mboe)	Gross		Net
High	164,911		134,295
Best	102,618		88,053
Low	71,444		63,939

Note:	(1) See "Definitions of Oil and Gas Resources and Reserves" herein.
	(2) Net volumes are defined as gross volumes, less royalty deductions payable.
	(3) There is no certainty that it will be commercially viable to produce any portion of the resources.

About Chinook Energy Inc.

Chinook is a Calgary-based public oil and gas exploration and development company that combines high quality natural gas-weighted assets in Western Canada with an exciting high growth oil business onshore and offshore Tunisia in North Africa.

Definitions of Oil and Gas Resources and Reserves

Reserves are estimated remaining quantities of oil and natural gas and related substance anticipated to be recoverable from known accumulations, as of a given date, based on the analysis of drilling, geological, geophysical and engineering data; the use of established technology, and specified economic conditions, which are generally accepted as being reasonable. Reserves are classified according to the degree of certainty associated with the estimates as follows:

Proved Reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

Probable Reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

Possible Reserves are those additional reserves that are less certain to be recovered than probable reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves. There is 10% probability that the quantities recovered will exceed the sum of proved and probable reserves.

Resources encompasses all petroleum quantities that originally existed on or within the earth's crust in naturally occurring accumulations, including Discovered and Undiscovered (recoverable and unrecoverable) plus quantities already produced. "Total resources" is equivalent to "Total Petroleum Initially-In-Place". Resources are classified in the following categories:

Discovered Petroleum Initially-In-Place ("DPIIP") is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered petroleum initially-in-place includes production, reserves, and contingent resources; the remainder is unrecoverable.

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development but which are not currently considered to be commercially recoverable due to one or more contingencies.

Unrecoverable is that portion of DPIIP and UPIIP quantities which is estimated, as of a given date, not to be recoverable by future development projects. A portion of these quantities may become recoverable in the future as commercial circumstances change or technological developments occur; the remaining portion may never be recovered due to the physical/chemical constraints represented by subsurface interaction of fluids and reservoir rocks.

Uncertainty Ranges are described by the COGE Handbook as low, best, and high estimates for reserves and resources as follows:

Low Estimate: This is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.

Best Estimate: This is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.

High Estimate: This is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

Reader Advisory

Forward-Looking Statements

In the interest of providing shareholders and potential investors with information regarding Chinook, including management's assessment of the future plans and operations of Chinook, certain statements contained in this news release constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In addition, statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and can be profitably produced in the future. In particular, this news release contains, without limitation, forward-looking statements pertaining to: the recognition of significant additional reserves under the heading "2011 Independent Reserve Evaluation"; the volumes and estimated value of Chinook's oil and natural gas reserves; the life of Chinook's reserves; the volume and product mix of Chinook's oil and natural gas production; future oil and natural gas prices and Chinook's commodity risk management program; future results from operations and operating metrics; and future development, exploration, acquisition and development activities (including drilling plans) and related production expectations as well as management's future expectations set out under the heading "Revised Guidance".

With respect to the forward-looking statements contained in this news release, Chinook has made assumptions regarding, among other things: that Chinook will continue to conduct its operations in a manner consistent with past operations, the ability of Chinook to continue to operate in Tunisia with limited logistical security and operational issues, future capital expenditure levels, future oil and natural gas prices, future oil and natural gas production levels, Chinook's ability to obtain equipment in a timely manner to carry out development activities, the impact of increasing competition, the ability of Chinook to add production and reserves through development and exploitation activities, certain commodity price and other cost assumptions, the continued availability of adequate debt and equity financing and cash flow to fund its planned expenditures. Although Chinook believes that the expectations reflected in the forward-looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that predictions, forecasts, projections and other forward-looking statements will not occur, which may cause Chinook's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, without limitation, political and security risk associated with Chinook's Tunisian operations, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve and resource estimates, the continued impact of shut-in production, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, delays in projects and/or operations resulting from surface conditions, wells not performing as expected, delays resulting from or inability to obtain the required regulatory approvals and ability to access sufficient capital from internal and external sources.
As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the forgoing list of factors is not exhaustive. Additional information on these and other factors that could effect Chinook's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at Chinook's website (www.chinookenergyinc.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Chinook does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Barrels of Oil Equivalent

Barrels of oil equivalent (boe) is calculated using the conversion factor of 6 mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl (barrel) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Reserve Life Index

The reader is also cautioned that this news release contains the term reserve life index ("RLI"), which is not a recognized measure under GAAP. Management believes that this measure is a useful supplemental measure of the length of time the reserves would be produced over at the rate used in the calculation. Readers are cautioned, however, that this measure should not be construed as an alternative to other terms determined in accordance with IFRS as a measure of performance. Chinook's method of calculating this measure may differ from other companies, and accordingly, they may not be comparable to measures used by other companies.

Operating Netback

The reader is also cautioned that this news release contains the term operating netback, which is not a recognized measure under GAAP and is calculated as a period's sales of petroleum and natural gas, net of royalties less net production and operating expenses as divided by the period's sales volumes. Management uses this measure to assist them in understanding Chinook's profitability relative to current commodity prices and it provides an analysis tool to benchmark changes in operational performance against prior periods and to peers on a comparable basis. Readers are cautioned, however, that this measure should not be construed as an alternative to other terms such as net income determined in accordance with IFRS as a measure of performance. Chinook's method of calculating this measure may differ from other companies, and accordingly, they may not be comparable to measures used by other companies.

Cash flow from operations

The reader is also cautioned that this news release contains the term cash flow from operations, which is not a recognized measure under GAAP and is calculated from cash flow from continuing operations adjusted for changes in non-cash working capital. Management believes that cash flow is a key measure to assess the ability of Chinook to finance capital expenditures and debt repayments. Readers are cautioned, however, that this measure should not be construed as an alternative to other terms such as cash flow from operating activities, net income or other measures of financial performance calculated in accordance with IFRS. Chinook's method of calculating this measure may differ from other companies, and accordingly, they may not be comparable to measures used by other companies.