PetroBakken Announces W. Brett Wilson as a New Director, Provides Operational Update, 2012 Guidance, and Implementation of a Dividend Reinvestment Plan

CALGARY, ALBERTA--(Marketwire - Dec. 13, 2011) - PetroBakken Energy Ltd. ("PetroBakken" or the "Company") (TSX:PBN), a 59% owned subsidiary of Petrobank Energy and Resources Ltd. (TSX:PBG), is pleased to announce a new director, provide an update on our current operating activities and our initial 2012 capital plan. We are also pleased to announce that we are implementing a Dividend Reinvestment Plan ("DRIP").

Appointment of New Director

We are very pleased to announce the appointment of W. Brett Wilson to the Board or Directors of PetroBakken. We are confident Mr. Wilson's 25 plus years of investment banking experience, primarily as co-founder of FirstEnergy Capital Corp., will be a valuable addition to our ongoing strategic direction and governance team at PetroBakken.

Operational Update

Production in early December has reached over 48,000 barrels of oil equivalent per day ("boepd") (87% light oil and NGLs), a 23% increase over third quarter 2011 production levels, based on field estimates. Our Bakken business unit production is over 23,000 boepd and our Cardium business unit production now exceeds 14,750 boepd (with over 1,450 boepd currently shut-in awaiting tie-in to gas conservation systems), with the remainder of the production generated by our Saskatchewan conventional and AB/BC business units. We continue to forecast a 2011 exit production rate of over 49,000 boepd.

Initial 2012 Capital Plan

We are also pleased to announce our initial capital plan for 2012, which allow us to build on our 2011 operational success. We anticipate capital development expenditures of approximately $700 million, primarily focused on horizontal drilling and completions, predominantly in the Bakken and Cardium light oil plays. We expect that this drilling-focused activity will generate a 2012 exit production rate of between 50,000 and 54,000 boepd. Our estimated year-over-year average production growth will exceed 15%, on an absolute and per-share basis. We expect this initial 2012 program to be executed entirely from funds from operations, with surplus cash flow available to fund dividends and debt repayment.

For 2012 we estimate that our corporate base decline rate will be in the range of 30-35%. In 2010, our base production declined approximately 40%, while the 2011 base decline rate is now forecast at approximately 35%. We have been encouraged by the results of our recently completed wells, and we are also beginning to see the benefit of the continued maturation of our producing assets with a significant proportion of our production now coming from older, shallower decline, horizontal wells.

Capital plans for 2012 will focus primarily on our light oil resource plays in southeast Saskatchewan for the Bakken and central Alberta for the Cardium, as well as our Mississippian conventional light oil play in southeast Saskatchewan. The majority of our 2012 capital spending is expected to be used to drill, complete and equip ("DC&E") over 183 net wells (due to bilateral wells this represents over 240 net horizontal well bores) for approximately $545 million. The plan also includes investments of approximately $155 million in facilities, land, seismic, recompletions and direct administration capital.

In southeast Saskatchewan, we expect to drill 96 net Bakken wells (including approximately 58 net bilateral wells) and 35 net conventional wells. Overall, we plan on spending $290 million of DC&E capital in southeast Saskatchewan, comprised of $225 million in the Bakken (including EOR spending) and $65 million in our conventional Mississippian plays. We will also continue to invest in our EOR pilots to evaluate several injection configurations, primarily using natural gas. Currently, we have five pilot projects underway that are in various stages of implementation. It is expected that we will have our second pilot on injection in Q1 2012, with three others being added by the end of Q3 2012.

In Alberta and British Columbia we plan to drill 49 net wells for DC&E capital of $225 million in our Cardium business unit and three wells in our AB/BC business unit for $30 million. The majority of our Cardium drilling will be focused on West Pembina. In our AB/BC business unit, activity will further delineate and evaluate our new oil resource plays building on our 2011 drilling program where we have drilled three wells and are currently drilling one additional well. At this time, we estimate we have identified over 100 drilling locations in the new oil resource play areas.

As part of our ongoing balance sheet management, and to reward continuing support from existing shareholders, we are pleased to announce the implementation of a DRIP. The DRIP provides eligible holders of common shares resident in Canada the opportunity to reinvest their monthly cash dividends in PetroBakken shares at a 5% discount to the then current market prices. Petrobank (59% shareholder of the Company) has indicated an intention to participate in the DRIP with respect to 50% of their PetroBakken shares, which will amount to $53 million in additional liquidity to the Company on an annual basis. Subject to the receipt of approval of the Toronto Stock Exchange, the DRIP will be implemented for the January 2012 dividend, which is payable in mid-February 2012. Additional information regarding the DRIP can be found below.

We are expanding our hedging program to hedge up to 20,000 bopd of our net production in the first half of 2012 in order to provide further cash flow security. This is an increase to our past practices in which we hedged approximately 25% of our production. To-date, we have 12,750 bopd hedged for the first half of 2012 at an average floor of $80.49 and a ceiling of $113.92. For the second half of 2012 we have 8,500 bopd hedged at an average floor of $76.62 and a ceiling of $119.77. This increased hedging program has been adopted to allow us to lock in strong oil prices as we move into 2012.

Dividend Reinvestment Plan

The DRIP provides eligible shareholders with the opportunity to reinvest their monthly cash dividends in new shares at a 5% discount to the then current market price. Only shareholders who are resident in Canada may participate in the DRIP. Shareholders not resident in Canada are not eligible to participate.

No commissions, service charges or brokerage fees will be payable by DRIP participants in connection with the reinvestment of their dividends in PetroBakken shares. However, beneficial shareholders who wish to participate in the DRIP through their broker, investment dealer, financial institution or other nominee who holds their shares should consult that nominee to confirm what fees, if any, the nominee may charge to enroll in the DRIP on their behalf or whether the nominee's policies might result in any costs otherwise becoming payable by the beneficial shareholder.

Participation in the DRIP will not relieve shareholders of any liability for taxes that may be payable on dividends. Shareholders should consult their own tax advisors concerning the tax implementations of their participation in the DRIP having regard to their own particular circumstances.

Shareholders who hold a physical share certificate to evidence their ownership of common shares (commonly referred to as registered shareholders) can enroll in the DRIP by delivering a completed enrolment and authorization form to Olympia Trust Company ("Olympia"). The enrolment and authorization form will be available on our website at www.petrobakken.com, or by contacting Olympia at 403-668-8887 or via email at corporateactions@olympiatrust.com. Enrolment and authorization forms must be received by Olympia by no later than 3:00 p.m. (Calgary time) on the business day prior to the record date in respect of a dividend in order to participate in the DRIP for the corresponding dividend. The first record date for which shares will be eligible for participation in the DRIP is anticipated to be January 31, 2012.

Shareholders who hold their common shares through a broker, investment dealer, financial institution or other nominee (commonly referred to as beneficial shareholders) can contact the party holding their common shares to request that their shares be enrolled in the DRIP. Beneficial shareholders should be aware that (i) certain brokers, investment dealers, financial institutions or other nominees may not allow participation in the DRIP and (ii) certain brokers and investment dealers may reinvest dividends received by their clients by purchasing additional shares in the open market at prevailing market prices (in which case such clients would not receive the discount offered under the DRIP for common shares acquired from treasury). Neither PetroBakken nor Olympia is responsible for monitoring or advising which brokers, investment dealers, financial institutions or other nominees allow participation in the DRIP.

Shareholders are not required to participate in the DRIP. Shareholders who do not participate will continue to receive monthly cash dividends on their PetroBakken shares.

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.

BOEs. Natural gas volumes have been converted to barrels of oil equivalent ("boe"). Six thousand cubic feet ("Mcf") of natural gas is equal to one barrel of oil equivalent based on an energy equivalency conversion method primarily attributable at the burner tip and does not represent a value equivalency at the wellhead. Boes may be misleading, especially if used in isolation.

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 financial results, results from operations, future capital costs, future production rates, proposed exploration and development activities, our drilling prospect inventory, the timing of certain projects, capital spending levels and anticipated sources of capital. The forward-looking statements are based on certain key expectations and assumptions, including expectations and assumptions concerning the availability of debt and equity capital, the success of future drilling, completion, recompletion and development activities, the performance of new and existing wells, prevailing commodity prices and economic conditions, the availability and cost of labour and services, and 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. 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.