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Press release from Marketwire

Petrobank Completes Petrominerales Reorganization and Enters Into New $200,000,000 Credit Agreement

Friday, December 31, 2010

Petrobank Completes Petrominerales Reorganization and Enters Into New $200,000,000 Credit Agreement19:01 EST Friday, December 31, 2010CALGARY, ALBERTA--(Marketwire - Dec. 31, 2010) - Petrobank Energy and Resources Ltd. ("Petrobank") (TSX:PBG) is pleased to announce the completion of the distribution of our ownership in Petrominerales Ltd. ("Petrominerales") (TSX:PMG) to our shareholders. Each Petrobank shareholder of record on December 31, 2010 received our proportionate interest in Petrominerales, approximately 0.614 Petrominerales shares for each Petrobank share held, through the receipt of shares of a newly incorporated company which acquired all of the shares of Petrominerales ("New Petrominerales"). New Petrominerales trades on the Toronto Stock Exchange under the symbol PMG.Petrobank shareholders will find tax information regarding the Petrominerales reorganization on our website at Petrobank has entered into a new three-year $200,000,000 credit agreement with a syndicate of lenders effective January 4, 2011. The credit agreement is secured by a portion of our shares of PetroBakken Energy Ltd. (TSX: PBN) and a general security assignment on other corporate assets. This new credit agreement will be used to support our planned capital requirements for our heavy oil assets at Kerrobert and Dawson, as well as our oil sands development at May River, in 2011 and beyond.Forward-Looking Statements. Certain information provided in this press release constitutes forward-looking statements. Specifically, this press release contains forward-looking statements relating to the anticipated use of our credit facility. Forward-looking statements are necessarily based upon assumptions and judgments with respect to the future including, but not limited to, the results of existing projects and the opportunity to undertake new projects, the outlook for commodity markets and capital markets, success of future evaluation and development activities, the successful application of technology, performance of new and existing wells and reservoirs, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. 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; fluctuations in oil prices; the results of exploration and development drilling, risks associated with the development and application of technology, 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; 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 forecast. 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. is a Calgary-based oil and natural gas exploration and production company with operations in western Canada. The Company operates high-impact projects through two business units and a technology subsidiary. Petrobank's 59% owned TSX-listed subsidiary, PetroBakken Energy Ltd. (TSX:PBN), is a premier light oil production company combining, high growth, long-life Bakken reserves and production with legacy 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. PetroBakken's strategy is to deliver accretive production and reserves growth, along with an attractive dividend yield. Whitesands Insitu Partnership, a partnership between Petrobank and its wholly-owned subsidiary Whitesands Insitu Inc., owns 104 net sections of oil sands leases in Alberta, 36 sections of oil sands licenses in Saskatchewan and 4 net sections of petroleum and natural gas rights in Kerrobert, Saskatchewan, and operates the Whitesands project which is field-demonstrating Petrobank's patented THAI® heavy oil recovery process. THAI®is an evolutionary in-situ combustion technology for the recovery of bitumen and heavy oil that integrates existing proven technologies and provides the opportunity to create a step change in the development of heavy oil resources globally. THAI®and CAPRI®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.FOR FURTHER INFORMATION PLEASE CONTACT: John D. WrightPetrobank Energy and Resources Ltd.President and Chief Executive Officer403.750.4400ORChris J. BloomerPetrobank Energy and Resources Ltd.Senior Vice President and Chief Operating Officer, Heavy Oil403.750.4400ORPeter CheungPetrobank Energy and Resources Ltd.Vice President Finance and Chief Financial