Petrobank Announces Record 2008 Results

Petrobank Energy and Resources Ltd. ("Petrobank" or the "Company") (TSX:PBG) is
pleased to announce record year-end financial and operating results. 


(All references to $ are Canadian dollars unless otherwise noted)

HIGHLIGHTS

(Annual comparisons are 2008 compared to 2007 and quarterly comparisons are
fourth quarter 2008 compared to the fourth quarter of 2007)


- Production increased by 181% to 28,742 barrels of oil equivalent per day
("boepd") in 2008 from 10,243 boepd in 2007. Canadian Business Unit ("CBU")
production increased by 225% to 17,775 boepd and production from the Latin
American Business Unit ("LABU") increased by 130% to 10,967 barrels of oil per
day ("bopd") in 2008. 


- Fourth quarter average daily production increased by 111% in 2008 to 37,618
boepd from 17,829 boepd in the fourth quarter of 2007. CBU production increased
by 170% to 22,274 boepd and production from the LABU increased by 60% to 15,344
bopd. 


- Average daily production increased further to 47,897 boepd in February 2009
comprised of 22,000 boepd from the CBU and 25,897 bopd from the LABU.


- CBU operating netbacks increased 37% in 2008 to $67.99/boe and averaged
$39.04/boe in the fourth quarter. 


- LABU operating netbacks increased 21% in 2008 to $69.61/bbl and averaged
$42.45/bbl in the fourth quarter.


- Strong operating netbacks generated 2008 recycle ratios of 2.4 times in the
CBU and 2.1 times in the LABU based on "all-in" 2P FD&A costs. 


- Funds flow from operations increased by 281% in 2008 to $665.9 million or
$7.28 per diluted share.


- Funds flow from operations increased by 59% in the fourth quarter to $147.8
million or $1.63 per diluted share.


- Net income tripled in 2008 to $244.5 million or $2.76 per diluted share.

- Net income decreased by 30% in the fourth quarter to $28.1 million or $0.34
per diluted share.


A full Petrobank operational and reserves update was published on March 5, 2009
and can be found at www.petrobank.com. A full operational update of our 76.5%
owned LABU, Petrominerales Ltd., was published on March 1, 2009 and can be found
at www.petrominerales.com. Highlights of the March 5, 2009 release include:


- CBU proved plus probable ("2P") reserves increased by 95% to 59.5 million boe
at December 31, 2008 and we replaced 2008 production more than 5.5 times. 


- CBU proved plus probable plus possible ("3P") reserves increased by 83% to
86.2 million boe with net present value, before tax, discounted at 10% of $2.0
billion. 


- Heavy Oil Business Unit ("HBU") 2P reserves increased by 171% to 69.0 million
barrels with net present value, before tax, discounted at 8% of $392.8 million. 


- HBU 3P reserves plus high estimate contingent recoverable bitumen resources
totaled 814.7 million barrels with net present value, before tax, discounted at
8% of $3.6 billion. 


- LABU 2P reserves were flat year over year at 36.8 million barrels with net
present value, before tax, discounted at 10% of US$1.2 billion.


- LABU 3P reserves increased by 6% to 55.0 million barrels with net present
value, before tax, discounted at 10% of US$1.8 billion.


- Petrobank's total company 2P reserves increased by 61% to 156.7 million boe
with net present value of $3.0 billion up from $2.1 billion in 2007.


- Petrobank's total company 3P reserves increased by 12% to 205.9 million boe
with net present value of $4.2 billion up from $3.2 billion in 2007.


FINANCIAL & OPERATING HIGHLIGHTS

The following table provides a summary of Petrobank's financial and operating
results for the three and twelve month periods ended December 31, 2008 and 2007.
Consolidated financial statements with Management's Discussion and Analysis
("MD&A") are now available on the Company's website at www.petrobank.com and
will also be available on the SEDAR website at www.sedar.com.




                          Three months ended             Years ended
Financial                        December 31,     %      December 31,     %
($000s, except where noted)     2008    2007 change     2008    2007 change
----------------------------------------------------------------------------
Oil and natural gas revenue  206,161 127,308     62  950,068 257,736    269
Funds flow from operations
 (1)                         147,813  92,733     59  665,933 174,864    281
  Per share - basic ($)         1.78    1.20     48     8.09    2.31    250
  Per share - diluted ($)       1.63    1.05     55     7.28    2.10    247
Net income                    28,083  40,146    (30) 244,482  81,427    200
  Per share - basic ($)         0.34    0.52    (35)    2.97    1.08    175
  Per share - diluted ($)       0.34    0.45    (24)    2.76    0.99    179
EBITDA (1)                   138,529  94,200     47  683,253 180,030    280
Capital expenditures         279,982 136,528    105  909,913 510,264     78
Net debt / (net working
 capital) (1)                355,665 (16,068)     -  355,665 (16,068)     -
Common shares outstanding,
 end of year (000s)
  Basic                       83,525  77,271      8   83,525  77,271      8
  Diluted (2)                 99,043  90,038     10   99,043  90,038     10
Weighted average common
 shares outstanding (000s)
  Basic                       83,197  76,972      8   82,268  75,552      9
  Diluted                     83,344  88,494     (6)  90,096  83,800      8
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Operations
CBU operating netback ($/boe
 except where noted) (1)(3)
  Oil and NGL revenue ($/bbl)
   (4)                         57.71   80.83    (29)   92.80   75.64     23
  Natural gas revenue ($/mcf)
   (4)                          6.86    6.05     13     8.06    6.35     27
  Oil and natural gas revenue
   (4)                         55.90   72.42    (23)   86.78   62.62     39
  Royalties                     8.62    5.11     69    10.03    4.86    106
  Production expenses           8.24    7.99      3     8.76    8.19      7
----------------------------------------------------------------------------
  Operating netback (5)        39.04   59.32    (34)   67.99   49.57     37

LABU operating netback ($/bbl)
 (1)
  Oil revenue (4)              54.93   76.53    (28)   87.15   71.74     21
  Royalties                     4.68    7.74    (40)    8.46    6.68     27
  Production expenses           7.80    7.34      6     9.08    7.37     23
----------------------------------------------------------------------------
  Operating netback            42.45   61.45    (31)   69.61   57.69     21

Average daily production (3)
  CBU - oil and NGL (bbls)    19,841   6,691    197   15,369   3,579    329
  CBU - natural gas (mcf)     14,598   9,379     56   14,436  11,379     27
----------------------------------------------------------------------------
  Total CBU conventional
   (boe)                      22,274   8,254    170   17,775   5,476    225
  LABU - oil (bbls)           15,344   9,575     60   10,967   4,767    130
----------------------------------------------------------------------------
  Total Company conventional
   (boe)                      37,618  17,829    111   28,742  10,243    181
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(1) Non-GAAP measure. See "Non-GAAP Measures" within MD&A. 
(2) Assumes 8.8 million common shares will be issued upon conversion of the 
    Company's convertible debentures which were issued in 2007. 
(3) Six mcf of natural gas is equivalent to one barrel of oil equivalent 
    ("boe"). HBU bitumen volumes are excluded from average daily production
    as Whitesands operations are considered to be in the pre-operating stage
    and accordingly are capitalized.
(4) Net of transportation expenses.
(5) Excludes hedging activities.
(6) Calculated using the weighted average basic common shares for the
    period.
(7) Calculated using the end of year basic common shares outstanding.
(8) Total Company includes only Petrobank's 76.5% share of the LABU's
    reserves at December 31, 2008 and 2007.



DELIVERING PER SHARE GROWTH

Petrobank's exceptional growth in 2008 was achieved almost entirely through the
drill bit. With the exception of the Peerless acquisition in January 2008, all
the Company's organic production growth was driven by active and highly
successful drilling programs. Each of the Canadian and Latin American business
units more than doubled production year over year on both an absolute and per
share basis. Combined total Company production per share increased by 162% in
2008. On a reserves per share basis, the Company increased total proved reserves
by 57%, total proved plus probable reserves by 72%, and total proved plus
probable plus possible reserves by 15% in 2008. This performance reflects our
commitment to increasing per share value through focused high-impact capital
expenditures, and accretive acquisitions. 




                          Three months ended            Years ended
Per Share Growth                 December 31,     %     December 31,      %
($000s, except where noted)     2008    2007 change   2008     2007  change
----------------------------------------------------------------------------
Average daily production per million shares by Business Unit (1)
  CBU conventional (boe)         268     107    150    216       72     200
  LABU - Colombia (bbls)         184     108     70    122       57     114
----------------------------------------------------------------------------
  Total Company
   conventional (boe)            452     215    110    338      129     162
----------------------------------------------------------------------------
Total proved reserves per share (2)
  CBU (boe)                                           0.48     0.25      92
  LABU - Colombia (bbls)                              0.30     0.27      11
----------------------------------------------------------------------------
  Total Company (boe) (3)                             0.72     0.46      57
----------------------------------------------------------------------------
Total proved plus probable reserves per share (2)
  CBU (boe)                                           0.71     0.39      82
  HBU (bbls)                                          0.83     0.33     152
  LABU - Colombia (bbls)                              0.44     0.48      (8)
----------------------------------------------------------------------------
  Total Company (boe) (3)                             1.88     1.09      72
----------------------------------------------------------------------------
Total proved plus probable plus possible reserves per share (2)
  CBU (boe)                                           1.03     0.61      69
  HBU (bbls)                                          0.93     1.02      (9)
  LABU - Colombia (bbls)                              0.66     0.67      (1)
----------------------------------------------------------------------------
  Total Company (boe) (3)                             2.47     2.14      15
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Calculated using the weighted average basic common shares for the
    period.
(2) Calculated using the end of year reserves divided by basic common shares
    outstanding.
(3) Total Company includes only Petrobank's 76.5% share of the LABU's
    reserves at December 31, 2008 and 2007.



STRONG FINANCIAL RESULTS

Petrobank's production growth coupled with high world oil prices during the
first three quarters of the year combined to generate record levels of cash flow
and net income. Funds flow from operations increased 281% in 2008 to $665.9
million or $7.28 per diluted common share. Net income increased 200% to $244.5
million or $2.76 per diluted common share. 


In 2008, our CBU results were driven by ongoing development of our Bakken
properties in southeast Saskatchewan and we continued to add to our inventory of
opportunities for long-term growth. The acquisition of Peerless Energy Inc. on
January 28, 2008 added a combination of existing production and undeveloped land
in our CBU's core southeast Saskatchewan area. We also acquired Rocor Resources
Inc. on October 2, 2008 which provides us with longer-term natural gas assets
within the prolific Montney formation of northeast British Columbia.


Our LABU delivered similarly strong results in 2008, driven by strong production
growth at Corcel and progression of our significant exploration campaign,
building an inventory of opportunities for further growth.


Despite a significant drop in world oil prices, Petrobank delivered strong
results through the fourth quarter, fueled by continued production growth.
Fourth quarter production increased by 111% in 2008 to 37,618 boepd from 17,829
boepd in the fourth quarter of 2007. CBU production increased by 170% to 22,274
boepd and production from the LABU increased by 60% to 15,344 bopd. Production
continued to increase into 2009 averaging 47,897 boepd in February. Funds flow
from operations increased 59% in the fourth quarter to $147.8 million or $1.63
per diluted common share. Net income decreased 30% to $28.1 million or $0.34 per
diluted common share. 


Petrobank's results benefit from strong operating netbacks, especially in the
current commodity price environment. Our operating netbacks are reflective of
our high quality light oil production that receives premium pricing, excellent
fiscal regimes in Saskatchewan and Colombia, and our low cost operations. CBU
operating netbacks increased 37% in 2008 to $67.99/boe and averaged $39.04/boe
in the fourth quarter. LABU operating netbacks increased 21% in 2008 to
$69.61/bbl and averaged $42.45/bbl in the fourth quarter.


ECONOMIC CLIMATE

The past year was characterized by record oil prices during the first three
quarters and then sharp declines as the emerging world recession affected the
outlook for world oil demand. At the same time credit markets around the world
deteriorated. While this environment is challenging from both a commodity price
and credit perspective, we are well positioned with strong operating netbacks,
significant production and reserves growth, and the ability to execute a highly
flexible capital program in 2009 that can be readily increased or decreased as
commodity prices change. 


At December 31, 2008, we had $315.2 million of bank debt and we have Canadian
credit facilities with a combined borrowing base of $380 million. In addition to
this $65 million of available credit capacity, Petrobank had $32.9 million of
risk management assets relating to the fair value of our 2009 hedges that could
also be monetized to further increase our financial flexibility. In Colombia,
Petrominerales has an undrawn credit facility with a US$80 million borrowing
base. Petrobank's borrowing capacity is expected to benefit from significant
increases in proved developed producing reserves, up 222% to 26.5 million boe in
the CBU, and up 56% to 14.2 million barrels in the LABU. 


Petrobank is well positioned for success in the current economic environment. We
have a strong balance sheet, excellent assets that are providing strong
production growth, superior operating netbacks and an exciting inventory of
exploration and longer-term development prospects. The current economic
environment, while challenging, is opening up opportunities and has resulted in
lower costs, and more availability of equipment and services. In 2009, we intend
to balance capital spending with existing cash balances, expected future cash
flows, and prudent use of our credit facilities to execute our capital plans.


INTELLECTUAL PROPERTY PROTECTION

Petrobank's wholly owned subsidiary, Archon Technologies Ltd., has achieved an
important milestone with the granting of two new U.S. patents, for previously
filed patent applications covering improvements that add novel features to
Archon's existing THAI(TM) (Toe-to-Heel Air Injection) and CAPRI(TM)
technologies. These new patents enable pressure and temperature control in the
horizontal producer as well as the co-injection of oxygen and CO2 that combines
the benefits of thermal and solvent flooding. In addition, these patents extend
the life of our existing intellectual property to 2026. Three other patent
applications are pending, covering a "Heel-to-Toe" combustion design, our novel
well design and catalyst placement for CAPRI(TM), and downhole solvent
injection. The Archon suite of patents are filed under the Patent Convention
Treaty for worldwide coverage. Archon continues to develop additional patentable
intellectual property to further enhance and expand the effectiveness of our
core THAI(TM) and CAPRI(TM) technologies.


Petrobank Energy and Resources Ltd.

Petrobank Energy and Resources Ltd. is a Calgary-based oil and natural gas
exploration and production company with operations in western Canada and
Colombia. The Company operates high-impact projects through three business units
and a technology subsidiary. The Canadian Business Unit is focused on developing
a solid production platform from the Bakken light oil play in southeast
Saskatchewan, and exploiting a large undeveloped land base through the
application of new technology to large oil and gas resource opportunities. The
Latin American Business Unit, operated by Petrobank's 76.5% owned TSX-listed
subsidiary, Petrominerales Ltd. (TSX:PMG), is a Latin American-based exploration
and production company producing oil in Colombia with 16 exploration blocks
covering a total of 1.9 million acres in the Llanos and Putumayo Basins of
Colombia and 2.6 million acres in the Ucayali Basin of Peru. Whitesands Insitu
Partnership, a partnership between Petrobank and its wholly-owned subsidiary
Whitesands Insitu Inc., owns 75 net sections of oil sands leases in Alberta, 36
sections of oil sands licenses in Saskatchewan and operates the Whitesands
project which is field-demonstrating Petrobank's patented THAI(TM) heavy oil
recovery process. THAI(TM) 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(TM) and CAPRI(TM) are
registered trademarks of Archon Technologies Ltd., a wholly-owned subsidiary of
Petrobank. 


Barrels of Oil Equivalent ("boe")

Disclosure provided herein in respect of boe units may be misleading,
particularly if used in isolation. A boe conversion relationship of 6 mcf to 1
bbl is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the well head.


Non-GAAP Measures

This report contains financial terms that are not considered measures under
Canadian generally accepted accounting principles ("GAAP"), such as funds flow
from operations, funds flow per share, EBITDA, net debt and operating netback.
These measures are commonly utilized in the oil and gas industry and are
considered informative for management and shareholders. Specifically, funds flow
from operations and funds flow per share reflect cash generated from operating
activities before changes in non-cash working capital. Management considers
funds flow from operations and funds flow per share important as they help
evaluate performance and demonstrate the Company's ability to generate
sufficient cash to fund future growth opportunities and repay debt. EBITDA is
defined as earnings before interest, taxes, depreciation, amortization,
non-controlling interest and non-cash items. Net debt includes bank debt plus
accounts payable and accrued liabilities less current assets (excluding future
income tax asset) and is used to evaluate the Company's financial leverage.
Profitability relative to commodity prices per unit of production is
demonstrated by an operating netback. Funds flow from operations, funds flow per
share, EBITDA, net debt and operating netbacks may not be comparable to those
reported by other companies nor should they be viewed as an alternative to cash
flow from operations, net income or other measures of financial performance
calculated in accordance with GAAP. The following table shows the reconciliation
of funds flow from operations to cash flow from operating activities for the
periods noted:





                    Three months ended December 31, Years ended December 31,
                               2008    2007 Change      2008    2007 Change
----------------------------------------------------------------------------
Funds flow from
 operations: Non-GAAP       147,813  92,733     59%  665,933 174,864    281%
  Changes in non-cash
   working capital           75,853  23,384    224%  (12,323) 10,716      -
----------------------------------------------------------------------------
Cash flow from
 operating
 activities: GAAP           223,666 116,117     93%  653,610 185,580    252%
----------------------------------------------------------------------------
----------------------------------------------------------------------------



Forward-Looking Statements

Certain information provided in this press release constitutes forward-looking
statements. The words "anticipate", "expect", "project", "estimate", "forecast"
and similar expressions are intended to identify such forward-looking
statements. Specifically, this press release contains forward-looking statements
relating to results of operations and the timing of certain projects. 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,
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.