Kallisto Energy Completes Acquisition of Cumberland Oil & Gas and Announces Two New Pembina Wells

NOT FOR DISTRIBUTION OR DISSEMINATION IN THE UNITED STATES.

Kallisto Energy Corp. (TSX VENTURE:KEC) ("Kallisto" or the "Company") and
Cumberland Oil & Gas Ltd. (TSX VENTURE:COG) ("Cumberland") are pleased to
announce that they have completed their previously announced arm's length
business combination by way of a plan of arrangement under the Business
Corporations Act (Alberta). The plan of arrangement was approved by an
overwhelming majority of more than 99% of the votes cast by the Cumberland
shareholders at the special meeting of Cumberland shareholders held on October
10, 2012. Final approval of the plan of arrangement was granted by the Court of
Queen's Bench of Alberta on October 10, 2012.


Pursuant to the terms of an arrangement agreement between the parties, Kallisto
acquired all of the outstanding common shares of Cumberland ("Cumberland
Shares") on the basis of 0.9180 of a common share of Kallisto ("Kallisto Share")
for each outstanding Cumberland Share (the "Transaction"). After completing the
Transaction, Kallisto has 93,601,536 Kallisto Shares outstanding with Kallisto
shareholders owning approximately 65% and Cumberland shareholders owning
approximately 35% of the combined Company. 


Following closing of the Transaction, Kallisto and Cumberland completed a short
form amalgamation and continued under the name Kallisto Energy Corp. 


Kallisto's existing executive team, led by Robyn Lore, continues to manage the
combined Company. Steven Cloutier and Martin Hislop, members of the board of
directors of Cumberland immediately prior to completion of the Transaction, were
appointed to the board of directors of Kallisto at closing.


The Cumberland Shares are currently halted from trading on the facilities of the
TSX Venture Exchange and it is expected that the Cumberland Shares will be
delisted on October 15, 2012. The Kallisto Shares continue to trade on the
facilities of the TSX Venture Exchange under the symbol "KEC".


Pembina, Alberta Wells

Kallisto also announces that wells three and four of the planned water-flood
scheme at Pembina, Alberta have been drilled, completed and placed on
production. The horizontal wells, located at 102/04-04-048-03 W5M and
100/05-04-048-03 W5M, were completed using multi-stage fracture stimulations.
The drilling of the first two wells of the water-flood scheme was announced on
August 13, 2012. Production from the four new horizontal wells is in line with
historical performance from previous wells. Kallisto now has an interest in
twelve producing Cardium oil wells at Pembina.


The water-flood scheme is expected to result in the drilling of a total of five
horizontal oil wells in section 4-048-03 W5M, four in 2012 (which have now all
been drilled, completed and are on production) and one in 2013, bringing the
total number of wells in the section to seven. The new wells are expected to be
produced through the 5% royalty period for horizontal oil wells (the earlier of
two years or 60,000 bbls). Three of the seven wells in the section will be
converted to water injection wells; the first well in Q4 2012 and the next two
wells in 2014/2015. Kallisto's share of the water-flood project costs is
estimated to be approximately $4.2 million.


Following a successful evaluation of the results of the water-flood in section
4, the water-flood project is expected to be expanded to include part or all of
the remaining two sections of land in the Pembina project.


The development of its Pembina lands has added significant reserve value and
cash flow to the Company. Since the beginning of production operations in
November 2009, the first ten Pembina wells have produced a total of
approximately 460,000 BOE, including 392,000 bbls of oil. Initial 30 day field
production rates from the first ten wells averaged approximately 230 BOE/d (69
net), including 210 bbls (63 net) of oil. Kallisto has a 30% working interest in
the Pembina project.


About the Combined Company

The combined Company is a Calgary-based junior resource company engaged in the
exploration, development and production of oil and natural gas in Alberta and
Saskatchewan. Key attributes of the combined Company include:




--  Healthy balance sheet; 
--  Positive cash flow from a current production base of approximately 430
    BOE/d (approximately 70% oil and liquids); 
--  A credit facility of $8.8 million to supplement growth capital
    expenditures; 
--  Tax pools of approximately $48.0 million; 
--  Proved Reserves of 1,302 MBOE and Proved plus Probable Reserves of 2,034
    MBOE based on the independent reserve reports effective December 31,
    2011 of each of Kallisto and Cumberland; 
--  A significant land base, including 78,000 net acres of undeveloped land;
--  A diversified asset base with abundant near term drilling opportunities
    including: 
    --  Cardium light oil at Pembina; 
    --  Doe Creek light oil at Valhalla; 
    --  Basal Quartz liquids rich gas and Elkton light oil at Crossfield;
        and 
    --  Shaunavon crude oil in southwest Saskatchewan;
--  Significant potential upside from a waterflood programs being
    implemented at Pembina and Valhalla.



Forward-Looking Statements

In the interest of providing shareholders and potential investors with
information regarding the combined Company, including management's assessment of
the future plans and operations of the combined Company and ongoing operations
in the Pembina, Alberta area, certain statements contained in this joint news
release constitute forward-looking statements or information (collectively
"forward-looking statements") within the meaning of applicable securities
legislation. Forward-looking statements are typically identified by words such
as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will",
"project", "could", "plan", "intend", "should", "believe", "outlook",
"potential", "target" and similar words suggesting future events or future
performance. In addition, statements relating to "reserves" are deemed to be
forward-looking statements as they involve the implied assessment, based on
certain estimates and assumptions, that the reserves described exist in the
quantities predicted or estimated and can be profitably produced in the future.
In particular, this joint news release contains, without limitation,
forward-looking statements pertaining to the potential attributes of the
combined Company, including the effect of the Transaction on Kallisto's balance
sheet, tax pools, production, reserves, asset base and undeveloped land
position, as well as statements pertaining to Kallisto's proposed activities in
the Pembina, Alberta area. 


With respect to forward-looking statements contained in this joint news release,
assumptions have been made regarding, among other things: Kallisto's
expectations regarding future growth, results of operations production, future
capital and other expenditures (including the amount, nature and sources of
funding thereof); and the ability of Kallisto to execute and realize on the
anticipated benefits of the Transaction. Although Kallisto believes that the
expectations reflected in the forward looking statements contained in this joint
news release, and the assumptions on which such forward-looking statements are
made, are reasonable, there can be no assurance that such expectations will
prove to be correct. Readers are cautioned not to place undue reliance on
forward-looking statements included in this joint news release, as there can be
no assurance that the plans, intentions or expectations upon which the
forward-looking statements are based will occur.


By their nature, forward-looking statements involve numerous assumptions, known
and unknown risks and uncertainties that contribute to the possibility that the
predictions, forecasts, projections and other forward-looking statements will
not occur, which may cause Kallisto's actual performance and financial results
in future periods to differ materially from any estimates or projections of
future performance or results expressed or implied by such forward-looking
statements. These risks and uncertainties include, among other things, the
following: volatility in market prices for oil and natural gas; incorrect
assessment of the value of the Transaction; failure to realize the anticipated
benefits and synergies of the Transaction; the general economic conditions in
Canada, the U.S. and globally; industry conditions; governmental regulation;
imprecision of reserve and resource estimates; environmental risks; competition
from other industry participants; stock market volatility; Kallisto's ability to
access sufficient capital from internal and external sources; and the other
factors described under "Risk Factors" in Kallisto's most recently filed Annual
Information Form available in Canada at www.sedar.com. Readers are cautioned
that this list of risk factors should not be construed as exhaustive.


The forward-looking statements contained in this joint news release speak only
as of the date of this joint news release. Except as expressly required by
applicable securities laws, we do not undertake any obligation to publicly
update or revise any forward looking statements, whether as a result of new
information, future events or otherwise. The forward-looking statements
contained in this joint news release are expressly qualified by this cautionary
statement.


Barrels of Oil Equivalent

Barrels of oil equivalent (BOE) are calculated using the conversion factor of 6
Mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil.
BOE may be misleading, particularly if used in isolation. A BOE conversion ratio
of 6 Mcf: 1 bbl (barrel) is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead. Given that the value ratio based on the current
price of crude oil as compared to natural gas is significantly different from
the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be
misleading as an indication of value.


This joint news release does not constitute an offer to sell or the solicitation
of an offer to buy any securities within the United States. The securities to be
offered have not been and will not be registered under the U.S. Securities Act
of 1933, as amended, or any state securities laws, and may not be offered or
sold in the United States absent registration or an applicable exemption from
the registration requirements of such Act or other laws.