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Press release from Marketwire

Pace Oil & Gas Ltd.: Rainbow Lake Update, June 6, 2012: Estimate of Volume Leaked Significantly Lowered to Less Than 800m3

Wednesday, June 06, 2012

Pace Oil & Gas Ltd.: Rainbow Lake Update, June 6, 2012: Estimate of Volume Leaked Significantly Lowered to Less Than 800m322:16 EDT Wednesday, June 06, 2012CALGARY, ALBERTA--(Marketwire - June 6, 2012) - The initial estimate of the volume leaked from the Company's water injection site in NW Alberta has been reduced by approximately 75%, to less than 800 m3 from the 3,500 m3 earlier estimated. Additional analysis and information from our work on the recovery provides for a more accurate estimate. In addition no indication of contaminated groundwater has been found as evidenced by chloride levels that continue to test well within acceptable levels. The site is located in a remote area of N.W. Alberta approximately 20 km S.E. of Rainbow Lake. To ensure technical and mechanical capacity as well as personnel on-site to clean-up and reclaim the area, the Company immediately focused its efforts to address the larger initial volume estimate. Pace implemented a large scale clean up that could be tailored to the situation as the various stages were worked through."We are committed to making this right for the local community, Albertans, our shareholders and our industry" said Fred Woods, Pace President and CEO.Reclamation efforts continue and remain a priority for Pace. At this stage a completion date for reclamation has not been determined.Updates and Facts:Pace Oil & Gas Ltd. in consultation with our on-site spill response specialists have significantly lowered the estimated size of the above ground leak at the company's water injection well to less than 800 m3 which is approximately 75% lower than initial estimates. The leak has been determined to be light sweet oil. No evidence of contaminated ground water has been found. Current analysis shows low level concentrations of chloride and a PH within the acceptable range for surface waters. A breach in an above-ground section of pipe connecting the line to the wellhead resulted in a temporary, uncontrolled release of fluid from the well. The exact cause of the incident is under investigation. A remediation plan is being executed by Pace Oil & Gas Ltd. and an environmental engineering firm. The Pace team is working in collaboration with and under the approval of ERCB and Alberta Environment and Sustainable Resource Development. The leak was found on May 19th and the containment of the spill area and recovery of the fluid commenced immediately. Water monitoring continues. There is no sheen on the surface of the water or water movement outside of existing containment. Pace has insurance for these types of incidents. A claim has been filed and preliminary cost estimates indicate the amount is within policy limits.Pace Oil & Gas Ltd. (TSX:PCE) 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. FORWARD-LOOKING STATEMENTS Certain statements contained within this press release constitute forward-looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. The use of any of the words "targeting", "continue", "until", "forecast", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although Pace believes 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 Pace 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. These statements speak only as of the date of this press release or as of the date specified in the documents incorporated by reference into this press release, as the case may be. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to:liabilities inherent in oil and natural gas operations and limitations on insurance; timing associated with work to be completed; estimated cost of the project; competition for, among other things, skilled personnel; Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this document speak only as of the date of this document and Pace does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable securities laws.Updates to the Rainbow Lake Spill Incident will be posted on Pace's website at www.paceoil.ca. FOR FURTHER INFORMATION PLEASE CONTACT: Communications & Stakeholder RelationsPace Oil & Gas Ltd.Colin Merrick(403) 930-3519www.paceoil.ca