PetroBakken Replaces 274% of Production and Increases Reserves by 18% in 2010

CALGARY, ALBERTA--(Marketwire - Feb. 22, 2011) - PetroBakken Energy Ltd. ("PetroBakken" or the "Company") (TSX:PBN) a 59% owned subsidiary of Petrobank Energy and Resources Ltd. ("Petrobank") (TSX:PBG) is pleased to announce the Company's year-end reserves and provide an operational update.

HIGHLIGHTS

(Annual comparisons are 2010 compared to 2009 and quarterly comparisons are fourth quarter 2010 compared to the fourth quarter of 2009 unless otherwise noted. All references to $ are Canadian dollars unless otherwise noted.)

• 2010 average production of 41,688 barrels of oil equivalent per day ("boepd") increased 58% over 2009.
• Proved plus probable ("2P") Company Interest⁽¹⁾ reserves increased by 18% to 171.4 million barrels of oil equivalent ("MMboe") at December 31, 2010, replacing production by 274% (2P Company Gross⁽²⁾ reserves increased 18% to 169.2 MMboe).
• Our new entry into the Cardium play in Alberta during 2010, through three corporate acquisitions and our initial drilling campaign, has yielded incremental 2P reserve additions of 43 MMboe. Our first 55 operated wells drilled in 2010 resulted in reserve recognition for 149 of our undeveloped Pembina Cardium locations (out of our current inventory of over 650). This drilling campaign has accelerated into 2011.
• From July 2010 to mid-February 2011, we drilled 80 (65.9 net) PetroBakken-executed Cardium wells, of which:
  • 44 (39 net) wells are producing,
  • 16 (11.4 net) wells are completed but not yet producing, and
  • 20 (15.5 net) wells are waiting on completion.
• Production results from single-leg horizontal multi-stage fracture stimulated Cardium wells continue to meet our expectations with:
  • seven day average rates of 423 barrels of oil per day ("bopd") from 40 wells,
  • thirty day average rates of 246 bopd from 38 wells, and
  • sixty day average rates of 176 bopd from 21 wells.
• In our 2010 reserve report, producing Bakken bilateral horizontal wells received, on average, an incremental 35,000 barrels ("bbls") of oil over our 2009 reserve report assignments for 2P undeveloped bilateral horizontal locations.
• Activity in the Bakken play continues to move forward with bilateral drilling and enhanced oil recovery ("EOR") projects.

Notes:

1. "Company Interest" reserves represent the Company's working interest share of reserves including the Company's royalty interests in reserves and before deduction of the Company's royalty obligations.
2. "Company Gross" reserves represent the Company's working interest share of reserves excluding the Company's royalty interests in reserves and before deduction of royalty obligations.

RESERVES

Sproule Associates Limited ("Sproule") has completed their evaluation of PetroBakken's reserves, dated February 18, 2011, effective as at December 31, 2010 ("Sproule Evaluation"). All reserves are based on forecast prices and costs and are Company Gross reserves unless otherwise noted.

PetroBakken was very active in 2010, through both organic activity and acquisitions and divestitures. During the year we drilled 325 (239 net) wells, completed several corporate and property acquisitions to create our Cardium core area, and completed the sale of certain non-core properties. The Cardium acquisitions have added over 650 light oil locations to our drilling inventory to-date. The Sproule Evaluation reflects the impact of these acquisitions and divestitures.

In the Bakken, during 2010 we concentrated on drilling bilateral horizontal wells to improve capital efficiencies with primary recoveries. Performance of bilateral wells over this time frame has allowed Sproule to increase average reserve bookings for producing bilateral wells by 35,000 bbls of oil per well compared to expectations for 2P undeveloped bilateral locations in 2009. We continue to experiment with a number of new completion techniques in the Bakken to improve well performance (to obtain increased flow rates, reduced water cuts and reduced costs) and are encouraged by the initial results obtained.

PetroBakken Reserves
Forecast Prices(1)
As at December 31, 2010									Royalty		Company
			Company Gross(2)						Interests (3)		Interest(4)
	Total Oil		NGL		Natural Gas		Sub-total		Sub-total		Total
	(Mbbl	)	(Mbbl	)	(MMcf	)	(Mboe	)	(Mboe	)	(Mboe	)
Proved Developed Producing	50,888		3,807		63,790		65,326		857		66,183
Total Proved	80,866		5,414		94,337		102,003		1,025		103,028
Proved + Probable (2P)	136,153		8,871		148,754		169,816		1,561		171,377

PetroBakken Net Present Value – Before Tax ($ millions)(5)
Forecast Prices(1)
As at December 31, 2010
	0	%	5	%	8	%	10	%	15	%
Proved Developed Producing	3,355.3		2,574.1		2,285.9		2,135.0		1,849.3
Total Proved	4,765.3		3,541.1		3,084.3		2,844.8		2,392.2
Proved + Probable (2P)	8,367.7		5,521.1		4,598.1		4,141.6		3,325.6

PetroBakken Net Present Value – After Tax ($ millions)(5)
Forecast Prices(1)
As at December 31, 2010
	0	%	5	%	8	%	10	%	15	%
Proved Developed Producing	3,043.6		2,355.2		2,099.8		1,965.7		1,711.0
Total Proved	4,072.5		3,037.6		2,649.5		2,445.6		2,059.1
Proved + Probable (2P)	6,707.4		4,471.5		3,736.6		3,370.9		2,713.0

Working Interest Reserve Reconciliation – Forecast Prices(1)(Mboe)(2)
	Developed		Total		Proved+
	Producing		Proved		Probable
PetroBakken reserves at December 31, 2009	59,412		89,470		143,638
2010 production net of royalty interest	(15,031	)	(15,031	)	(15,031	)
Net acquisitions	3,283		5,344		6,817
Net additions and revisions	17,662		22,220		34,393
PetroBakken reserves at December 31, 2010	65,326		102,003		169,816
PetroBakken year-over-year increase in reserves	10	%	14	%	18	%
PetroBakken production replacement	139	%	183	%	274	%

Notes:

1. Based on the Sproule price forecast effective December 31, 2010.
2. Company Gross reserves, which represent the Company's working interest share of reserves excluding the Company's royalty interests in reserves and before deduction of royalty obligations.
3. Royalty interest reserves owned by the Company.
4. "Company Interest" reserves, which represent the Company's working interest share of reserves including the Company's royalty interests in reserves and before deduction of the Company's royalty obligations.
5. Company working interest reserves value plus royalties received less royalties and burdens.

PetroBakken FD&A Costs(1)
For the year ended December 31, 2010
		F&D		Acquisitions(2)		Dispositions		FD&A(5)
Capital expenditures (unaudited-$000s)(3)
	Capital expenditures	781,523		-		-		781,523
	Acquisition/(Disposition) capital(4)	-		714,305		(133,632	)	580,673
	Total capital	781,523		714,305		(133,632	)	1,362,196
	Less: Land value	94,751		352,002		-		446,753
	Total capital excluding land value	686,772		362,303		(133,632	)	915,443
Change in FDC ($000s)
	Total Proved	44,932		133,724		(22,835	)	155,821
	Proved + Probable (2P)	116,303		173,837		(32,540	)	257,600
Total costs ($000s)
	Total Proved	826,455		848,029		(156,467	)	1,518,017
	Proved + Probable (2P)	897,826		888,142		(166,712	)	1,619,796
Net reserve additions (mboe)
	Total Proved	22,220		13,608		(8,264	)	27,564
	Proved + Probable (2P)	34,393		21,235		(14,419	)	41,209
FD&A costs ($/boe) (including land)
	Total Proved	37.19		62.32		18.93		55.07
	Proved + Probable (2P)	26.11		41.82		11.52		39.31
FD&A costs ($/boe) (excluding land)
	Total Proved	32.93		36.45		18.93		38.86
	Proved + Probable (2P)	23.35		25.25		11.52		28.47
For the year-ended Dec. 31, 2009
FD&A costs ($/boe) (including land)
	Total Proved	45.22		46.81		43.57		46.83
	Proved + Probable (2P)	33.02		32.42		32.89		32.48
FD&A costs ($/boe) (excluding land)
	Total Proved	40.52		42.97		43.57		42.56
	Proved + Probable (2P)	30.37		29.96		32.89		29.81
For the three years-ended Dec. 31, 2010
FD&A costs ($/boe) (including land)
	Total Proved	36.17		49.63		27.94		46.31
	Proved + Probable (2P)	27.41		34.12		18.38		33.29
FD&A costs ($/boe) (excluding land)
	Total Proved	30.74		41.31		27.94		38.29
	Proved + Probable (2P)	23.66		28.77		18.38		27.94

1. The aggregate of the 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 total finding and development costs related to reserve additions for that year.
2. Includes the corporate acquisitions of Berens Energy Ltd., Rondo Petroleum Inc. and Result Energy Inc. and certain other asset acquisitions.
3. The Company's annual audit of our consolidated financial statements is not yet complete and accordingly all financial amounts are management's best estimates which are unaudited and subject to change.
4. Portion of the purchase prices allocated to property, plant & equipment and reflects the net present value of each corporate acquisition as at its acquisition date based on 2P NPV10%, before tax.
5. The Company uses FD&A as a measure of the efficiency of its overall capital program including the effect of acquisitions and dispositions.

PetroBakken had an active drilling program in 2010 and achieved 2P F&D costs of $26.11/boe (2009: $33.02/boe) on our operational capital expenditure program (including FDC and land acquisitions). Corporate acquisition and disposition transactions had a material impact on our FD&A costs for 2010, and resulted in 2P corporate FD&A costs of $39.31/boe (including FDC and land value) (2009: $32.48/boe). A significant portion of the acquisitions included land value associated with the Cardium light oil resource play, which generated 2P acquisition FD&A metrics of $41.82/boe, including land value (2009: $32.42/boe), and $25.25/boe excluding land value (2009: $29.96/boe). In addition, FDC represents $8.19/boe of our 2P acquisition FD&A ($4.22/boe on corporate 2P FD&A). The land value and FDC associated with the acquisitions represent potential future reserves additions and over time we expect the overall 2P FD&A for the Cardium area will not exceed $25.00/boe. Disposition activity has driven up corporate FD&A in 2010 by approximately 20%, as we sold gas weighted non-core properties at an average price of $11.52/boe. Overall, our non-core disposition program (including our December 2009 transaction) generated $312 million of net proceeds at an average 2P reserve value of of $18.38/boe.

OPERATIONAL UPDATE

PetroBakken's 2010 average production increased 58% to 41,688 boepd from 26,333 boepd in 2009. The increase is primarily due to acquisition activity in 2009 and early 2010. In the fourth quarter, PetroBakken production averaged 41,333 boepd, a decrease of 9% compared to the fourth quarter of 2009 due to dispositions, delayed operational activity and natural production declines from wells. Production increased 3% over third quarter 2010 levels of 40,095 due to increased completion activities in the Cardium area. Average January production is estimated at approximately 41,400 boepd and reflects a backlog of 36 Cardium wells that are drilled but still waiting to come on production.

PetroBakken drilled 239 net wells in 2010 (140 Bakken light oil wells and 42 conventional Mississippian light oil wells in southeast Saskatchewan, 53 Cardium light oil wells and 2 Notikewin gas wells in central Alberta, and 2 gas wells in northeast British Columbia). Of these wells, 3 net wells were dry & abandoned, for a 99% success rate. We had 15 net Bakken wells bought on production in 2010 where fracture stimulations were intentionally delayed until 2011 to test and improve completion techniques. Completion activities in the Cardium lagged drilling activities and at the end of the year we had 15 net Cardium wells waiting to be completed and/or brought on production. The results from the Cardium wells with slickwater completions continue to meet our expectations. The following table illustrates early results from our core areas within the Cardium play.

	West Pembina				East Pembina				Other				Total
	Average		Number		Average		Number		Average		Number		Average		Number
	Production(1)		of Wells		Production(1)		of Wells		Production(1)		of Wells		Production(1)		of Wells
	(bopd	)			(bopd	)			(bopd	)			(bopd	)
7 days	409		19		415		19		629		2		423		40
30 days	245		17		229		19		319		2		246		38
60 days	176		8		162		11		247		2		176		21

⁽¹⁾ Represents oil production only until gas and natural gas liquids are conserved.

Pipelining activities within the Cardium fairway, which will conserve gas and the associated natural gas liquids and result in higher production rates, are ongoing and we expect to have a significant number of wells tied in by the end of March 2011. Currently, we have 36 (26.9 net) wells waiting to be completed and/or brought on production.

PetroBakken currently has eight rigs drilling in the Cardium play in central Alberta and eight rigs drilling in southeast Saskatchewan, with seven of those rigs working in the Bakken and one in our conventional Mississippian plays. Two major oil batteries are nearing completion in southeast Saskatchewan to tie-in more Bakken production and conserve solution gas and natural gas liquids. Our recently expanded Midale gas plant now has the technology to process slightly sour gas, increasing our ability to handle third party production.

On the EOR front, based on compelling results from our 2010 pilot, we have drilled two Bakken EOR gas injection wells that are currently on primary production and are expected to begin gas injection early in the second quarter and late in the third quarter, respectively. We expect preliminary results in offset wells later in 2011.

In northeast British Columbia, PetroBakken continues to undertake a limited 3 well drilling program to preserve our land position (and our inventory of more than 400 undeveloped drilling locations) in the extensive Montney and Horn River tight gas plays until the natural gas price improves. A drill rig continues to work in the Monias area to finish drilling the last of two horizontal locations, targeting liquids-rich Montney gas. We anticipate these wells will be completed prior to spring breakup.

PetroBakken's 2011 plan is predominantly focused on our large inventory of light oil locations and we intend to invest approximately $590 million to drill over 200 net wells, about half of which will be in the Cardium play in central Alberta and the other half in southeast Saskatchewan. Exit production for 2011 is forecast to be between 46,000 and 49,000 boepd, with most of the growth in production generated from our Cardium play. Our results to- date continue to support strong investment in the Cardium resource play. We also look forward to implementing a $20 million investment in five Bakken EOR projects that will continue to build understanding for expansion of this concept beyond primary recovery. The 2010 year-end reserve report began to recognize the strong results from both the Bakken bilateral wells and early drilling results in the Cardium play. Our 2011 capital program will continue to build on these successes while also benefitting from our 2010 pre-investment in a number of drilled horizontal wells that are waiting to be fraced and put on production.

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 st rategy 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, future finding and development costs, anticipated facilities constr uction and the resulting efficiencies, and expected production rates. 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 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 an d 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 res ults 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 natur al 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.