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Press release from Marketwire

Pace Oil & Gas Ltd. Containment Update: Rainbow Lake Crude Emulsion Leak

Friday, May 25, 2012

Pace Oil & Gas Ltd. Containment Update: Rainbow Lake Crude Emulsion Leak17:53 EDT Friday, May 25, 2012CALGARY, ALBERTA--(Marketwire - May 25, 2012) - On May 19th an oil and water leak occurred in a remote area of NW Alberta approximately 20 km S.E. of Rainbow Lake reports Pace Oil & Gas Ltd (TSX:PCE). Update: The calculated release volume is 3,500 m3 of emulsion. As of today, approximately 400 m3 of oil and water emulsion has been recovered. The amount of emulsion recovered is 11 per cent of the total fluid released. The emulsion is 50 per cent oil and 50 per cent water. The leak was detected on May 19th. There are no detected or anticipated harmful emissions. Ambient air modelling shows levels below criteria. A cell tower booster has been installed to increase connectivity to the area. By end of day today, the impact area will be fully accessible. The source of the leak was completely shut-off May 19th. President and CEO Fred Woods is meeting with the Dene Tha' today to discuss collaborative efforts. Western Canadian Spill Services, the industry's oil spill cooperative has mobilized additional resources. In addition to existing on-site reclamation expertise, one of North America's leading emergency spill response specialists, SWAT Consulting Inc. has been engaged and dispatched to the incident site and will arrive today.The Facts:The water injection pipeline and associated water injection well have been isolated. Equipment was mobilized starting Sunday, May 20th with fluid recovery beginning at 3:00 p.m. Tuesday, May 22nd.Remaining water injection lines in the area have been shut down until the surface piping can be inspected. Any suspect piping will be replaced before going back into operation. A containment trench 4 feet wide and 2-3 feet deep around the perimeter of the area has been completed. Containment booms will be installed within the perimeter trench by end of day today. Oil skimming equipment is on-site and recovery operations continue. Technology, manpower, and equipment are on-site and working to maximum capacity. Over 40 personnel have been mobilized and are on-site. A local wildlife management firm, based out of Rainbow Lake is on location and ensuring wildlife does not migrate into the affected area. To date, one deceased duck has been identified. All government regulatory agencies have been notified of the line leak with representation of the ERCB and Alberta Environment and Water having assessed the area with our local field operations staff. Pace is engaged in daily and on-going dialogue with all impacted stakeholders. A remediation plan is being executed by Pace Oil and Gas Ltd. and environmental engineering firm. Operations team in collaboration with and under the approval of ERCB and Alberta Environment and Water. The ERCB states there were no injuries and no direct public impact as a result of the leak.Pace Oil & Gas Ltd. is a Calgary, Alberta based intermediate sized oil-weighted company with a large portfolio of near term oil resource opportunities in the Western Canadian Sedimentary Basin. (TSX:PCE)Fred Woods, President & CEO is at the Rainbow Lake incident site and not within reliable cell phone range. For immediate response, contact Colin Merrick.FOR FURTHER INFORMATION PLEASE CONTACT: Colin MerrickPace Oil & Gas Ltd.Vice President,Human Resources, Investor Relations and Administration(403) 461-9740cmerrick@paceoil.ca