Online Energy Inc. Announces 2011 Financial Results

Online Energy Inc. ("Online" or the "Company") (TSX VENTURE:ONL) announces its
financial and operating results for the year ended December 31, 2011.


Selected financial and operational information is outlined below and should be
read in conjunction with the audited financial statements and related MD&A for
the year ended December 31, 2011 (collectively, the "Financial Statements") and
the Company's 2011 Annual Information Form, which are available on the SEDAR
website at www.sedar.com and on the Company's website at www.onln.ca.




2011 Highlights                                                             

--  Raised $14 million concurrent with the Company's reverse takeover of
    Jomar Capital Corp. in January 2011 and an additional $4.2 million in
    May 2011; 
--  capital expenditures in 2011 were $15.4 million, primarily focused in
    the greater Paddle River area. Activities in this area included four
    property acquisitions, four work-overs, the drilling and completion of
    one horizontal oil well and substantial mineral rights acquisitions; 
--  year-end proved plus probable reserves were 1,444 Mboe (44% crude oil
    and natural gas liquids) with a reserve value of $13.6 million (10%
    discount, before tax), as evaluated by McDaniel and Associates
    Consultants Ltd.; 
--  exited 2011 with over 86,000 net acres of land in the greater Paddle
    River area focused on Viking, Ostracod, Ellerslie, Rock Creek and
    Nordegg oil properties and liquids-rich gas projects involving the
    Notikewin, Wilrich, Nordegg and Duvernay formations; 
--  successfully drilled and fracture stimulated the 100% W.I. Paddle River
    8-31-055-07W5M Ostracod horizontal oil well. This was the first Ostracod
    horizontal well drilled in the greater Paddle River area and provides
    the Company with a repeatable oil project on the Company's 38 net
    sections of Ostracod rights; 
--  fourth quarter production averaged 447 boe/d (32% oil and NGLs), an
    increase of 110% over Q1 - 2011 production; and 
--  exited 2011 with positive working capital of $2.1 million. 

Financial and Operational Results                                           
                                 Three months ended                         
                                        December 31  Year ended December 31 
                                   2011        2010       2011         2010 
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Financial (In Canadian                                                      
 dollars)                                                                   
Petroleum and natural gas                                                   
 sales                        1,530,082           -   4,808,166           - 
Net loss                       (621,698)   (245,556) (2,458,340)   (265,101)
Per share - basic and                                                       
 diluted                          (0.02)      (0.11)      (0.07)      (0.33)
Capital expenditures                                                        
 Property, plant and                                                        
  equipment                     330,627           -   8,831,990           - 
 Exploration and evaluation   3,059,171      67,419   6,584,312     581,374 
Working capital               2,052,412   9,800,428   2,052,412   9,800,428 
                                                                            
Equity outstanding                                                          
Common shares                41,309,889   3,503,150  41,309,889   3,503,150 
Stock options                 3,988,333           -   3,988,333           - 
Performance warrants          3,166,316           -   3,166,316           - 
                                                                            
Operating                                                                   
Average Daily Production                                                    
 Natural gas - Mcf/d              1,810           -       1,304           - 
 Crude oil and condensate -                                                 
  Bbls/d                             56           -          40           - 
 NGLs - Bbls/d                       89           -          81           - 
 Total - boe /d                     447           -         338           - 
                                                                            
Average Sales Prices                                                        
 Natural gas - $/Mcf               3.25           -        3.64           - 
 Crude oil and condensate -                                                 
  $/Bbl                           86.55           -       84.78           - 
 NGLs - $/Bbl                     65.92           -       61.91           - 
 Total - $/boe                    37.19           -       38.90           - 
Operating Netbacks $/boe          10.00           -        7.96           - 
                                                                            
Wells Drilled                                                               
 Gross                                -           -         2.0           - 
 Net                                  -           -         2.0           - 
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(1) Refer to the "Non-GAAP Measurements" in Cautionary Statements.          
(2) Refer to - "Oil, Natural Gas Liquids and Natural Gas Conversions to     
    boe's" in Cautionary Statements.                                        
                                                                            
2012 Activities                                                             

--  The 8-31 oil well went on-stream in mid-February; 
--  a second 100% W.I. horizontal well on the Ostracod oil project, located
    at 1-5-056-07W5M, was drilled in March and reached a total depth of
    3,089m including a 1,254m horizontal trajectory. Completion operations,
    including a multi-stage frac program, are planned for Q2 -2012; 
--  established a $6 million credit facility with a Canadian chartered bank.
    The credit facility consists of a revolving operating demand loan to a
    maximum of $4.75 million and an acquisition / development demand loan to
    a maximum of $1.25 million; 
--  re-acted to sharply declining natural gas prices by temporarily
    shutting-in two gas wells during Q1 - 2012. The Company will continue to
    monitor the economics of its natural gas production and anticipates that
    additional wells will be shut-in during Q2-2012. The Company's average
    production forecast for Q1-2012 has been reduced by 25 boe/d to the
    range of 425 - 450 boe/d (40% oil and liquids); and 
--  raised approximately $1.2 million, in two separate closings on April 25,
    2012, with a syndicate of agents pursuant to which the Company issued
    2,716,700 common shares at a price of $0.26 per share and 1,541,500
    common shares issued on a "flow-through" basis at a price of $0.30 per
    share. 



Outlook

Online has revised its 2012 capital budget to $7.4 million, which will be funded
by year-end working capital of $2.1 million, the proceeds of the recently
completed equity financing, cash flow and utilization of the credit facility.


The Company has successfully assembled an extensive land position of 136 net
sections in the greater Paddle River area of west-central Alberta. This
concentrated acreage position supports a large inventory of horizontal
multi-frac well locations on a variety of resource plays including the
Notikewin, Wilrich, Ostracod, Rock Creek, Nordegg and Duvernay formations.
Online also maintains a growing inventory of low-risk vertical oil locations
targeting the Viking and Ellerslie formations as well as a number of low-cost
re-entry opportunities.


Interested parties are invited to view the Company's corporate presentation
which is periodically updated on its website at www.onln.ca. 


Cautionary Statements:

This press release contains certain forward-looking statements (forecasts) under
applicable securities laws relating to future events or future performance.
Forward-looking statements are necessarily based upon assumptions and judgements
with respect to the future including, but not limited to, the outlook for
commodity markets and capital markets, the performance of producing wells and
reservoirs, well development and operating performance, general economic and
business conditions, weather, the regulatory and legal environment and other
risks associated with oil and gas operations. In some cases, forward-looking
statements can be identified by terminology such as "may", "will", "should",
"expect", "projects", "plans", "anticipates" and similar expressions. These
statements represent management's expectations or beliefs concerning, among
other things, future operating results and various components thereof affecting
the economic performance of Online. Undue reliance should not be placed on these
forward-looking statements which are based upon management's assumptions and are
subject to known and unknown risks and uncertainties, including the business
risks discussed above, which may cause actual performance and financial results
in future periods to differ materially from any projections of future
performance or results expressed or implied by such forward-looking statements.
Accordingly, readers are cautioned that events or circumstances could cause
results to differ materially from those predicted.


In the interest of providing Online shareholders and potential investors with
information regarding the Company, including management's assessment of Online's
future plans and operation, certain statements throughout this press release
constitute forward looking statements. All forward-looking statements are based
on the Company's beliefs and assumptions based on information available at the
time the assumption was made. The use of any of the words "anticipate",
"continue", "estimate", "expect", "may", "will", "project", "should", "believe"
and similar expressions are intended to identify forward looking statements. By
its nature, such forward-looking information involves 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.
Online believes the expectations reflected in those forward looking statements
are reasonable but no assurance can be given that these expectations will prove
to be correct and such forward looking statements contained throughout this
press release should not be unduly relied upon. These statements speak only as
of the date specified in the statements.


In particular, this press release may contain forward looking statements
pertaining to the following:




--  the performance characteristics of the Company's oil and natural gas
    properties; 
--  oil and natural gas production levels; 
--  capital expenditure programs; 
--  the quantity of the Company's oil and natural gas reserves and
    anticipated future cash flows from such reserves; 
--  projections of commodity prices and costs; 
--  supply and demand for oil and natural gas; 
--  expectations regarding the ability to raise capital and to continually
    add to reserves through acquisitions and development; and 
--  treatment under governmental regulatory regimes. 



The material assumptions in making these forward-looking statements include
certain assumptions disclosed in the Company's most recent management's
discussion and analysis included in the material available on this press
release.


The Company's actual results could differ materially from those anticipated in
the forward looking statements contained throughout this press release as a
result of the material risk factors set forth below, and elsewhere in this press
release:




--  volatility in market prices for oil and natural gas; 
--  liabilities inherent in oil and natural gas operations; 
--  uncertainties associated with estimating oil and natural gas reserves; 
--  competition for, among other things, capital, acquisitions of reserves,
    undeveloped lands and skilled personnel; 
--  incorrect assessments of the value of acquisitions and exploration and
    development programs; 
--  geological, technical, drilling and processing problems; 
--  fluctuations in foreign exchange or interest rates and stock market
    volatility; 
--  failure to realize the anticipated benefits of acquisitions; 
--  general business and market conditions; and 
--  changes in income tax laws or changes in tax laws and incentive programs
    relating to the oil and gas industry.



These factors should not be construed as exhaustive. Unless required by law,
Online does not undertake any obligation to publicly update or revise any
forward looking statements, whether as a result of new information, future
events or otherwise.


Barrels of oil equivalent (boe) may be misleading, particularly if used in
isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural
gas to one barrel (bbl) of oil is based on an energy conversion method primarily
applicable at the burner tip and is not intended to represent a value
equivalency at the wellhead. All boe conversions in this press release are
derived by converting natural gas to oil in the ratio of six thousand cubic feet
of natural gas to one barrel of oil. Certain financial amounts are presented on
a per boe basis, such measurements may not be consistent with those used by
other companies.


Estimated values contained in this press release do not represent fair market value.

This press release uses the term "netback" which is a term that does not have
standardized meanings under GAAP and this non-GAAP measurement may not be
comparable with the calculation of other entities. The Company uses this measure
to analyze operating performance.


The term "netback", which is calculated as the average unit sales price, less
royalties and operating expenses, represents the cash margin for every barrel of
oil equivalent sold. The Company considers this a key measure as it demonstrates
its profitability relative to current commodity prices. This term does not have
any standardized meaning prescribed by GAAP and, therefore, might not be
comparable with the calculation of a similar measure for other companies.