Petrobank Announces Year End Reserves & Production

Petrobank Energy and Resources Ltd. ("Petrobank" or the "Company") (TSX:PBG) is
pleased to announce strong reserves growth and production increases.


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

HIGHLIGHTS

- 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 (86% oil and NGLs) 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 (89% oil and NGLs) 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 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.


- CBU "all-in" 2P finding, development and acquisition costs of $28.41 per boe
representing a 2.4 times recycle ratio using unaudited 2008 CBU operating
netbacks.


- Unaudited CBU operating netbacks averaged $67.99 per boe in 2008 and despite a
steep decline in commodity prices in the period, fourth quarter operating
netbacks remained strong at $39.04 per boe.


- 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
totalled 814.7 million 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.




CORPORATE RESERVES / RESOURCES SUMMARY BY BUSINESS UNIT

Working Interest, Forecast Prices

                                  CBU     LABU      HBU   Total Company (1)
                                (mboe)  (mbbls)  (mbbls)             (mboe)
                                ------  -------  -------             ------
Developed Producing            26,501   14,229        -             37,386
Total Proved                   40,465   25,174        -             59,723
Proved + Probable (2P)         59,536   36,849   68,982            156,707
Proved + Probable + Possible
 (3P)                          86,186   54,965   77,670            205,904
High Estimate Contingent
 Resources                          -        -  737,062            737,062
3P + High Estimate Contingent
 Resources                     86,186   54,965  814,732            942,966

(1) Total Company includes only Petrobank's 76.5% share of the LABU's
    reserves at December 31, 2008.


Net Present Value, Before Tax, Forecast Prices (millions)(1)

                                CBU     LABU      HBU   Total Company (2)
                                 ($)    (US$)      ($)                ($)
                                 ---    -----      ---                ---
Developed Producing           874.8    487.2        -            1,331.2
Total Proved                1,068.4    831.9        -            1,847.7
Proved + Probable (2P)      1,489.9  1,229.4    392.8            3,034.4
Proved + Probable +
 Possible (3P)              2,001.0  1,808.6    522.6            4,217.9
High Estimate Contingent
 Resources                        -        -  3,102.6            3,102.6
3P + High Estimate
 Contingent Resources       2,001.0  1,808.6  3,625.2            7,320.5


Net Present Value, After Tax, Forecast Prices (millions)(1)

                                CBU     LABU      HBU   Total Company (2)
                                 ($)    (US$)      ($)                ($)
                                 ---    -----      ---                ---
Developed Producing           821.5    421.2        -            1,216.1
Total Proved                  938.6    676.5        -            1,572.4
Proved + Probable (2P)      1,238.3    933.3    274.2            2,386.8
Proved + Probable +
 Possible (3P)              1,605.7  1,320.6    374.4            3,217.3
High Estimate Contingent
 Resources                        -        -  2,175.1            2,175.1
3P + High Estimate
 Contingent Resources       1,605.7  1,320.6  2,549.5            5,392.4

(1) Net present values are discounted at 10% for the CBU and LABU, and at
    8% for the HBU.
(2) Total Company includes only Petrobank's 76.5% share of the LABU's
    reserves at December 31, 2008 converted using a US$/$ exchange rate
    of 1.2246.


Price Forecasts

                   CBU         CBU         LABU          HBU         HBU
--------------------------------------------------------------------------
                  AECO    
               Natural   WTI Crude    WTI Crude    WTI Crude    Hardisty
                 Gas(1)      Oil(1)       Oil(1)       Oil(1)   DilBit(1)
Year            ($/mcf)   (US$/bbl)    (US$/bbl)    (US$/bbl)     ($/bbl)
--------------------------------------------------------------------------
2009              6.82        53.73       57.00        60.00       53.65
2010              7.56        63.41       69.53        71.40       63.84
2011              7.84        69.53       76.38        83.20       70.26
2012              8.38        79.59       86.99        90.20       72.16
2013              9.20        92.01       94.74        97.40       74.02
Thereafter
 inflation %
 change              2%           2%        2.5%           2%          2%
--------------------------------------------------------------------------
--------------------------------------------------------------------------

(1) Actual prices used were adjusted for crude oil and bitumen quality
    differentials, natural gas heat content, transportation and marketing
    costs specific to the Company's operations.



The full reserve disclosure tables, as required under National Instrument
51-101, will be contained in the Company's Annual Information Form which will be
filed on the SEDAR website at www.sedar.com later in March.


CANADIAN BUSINESS UNIT (CBU)

Reserves

Our CBU reserve engineers, Sproule Associates Limited ("Sproule"), have
completed their evaluation of our conventional Canadian reserves as at December
31, 2008. All reserves are based on forecast prices and costs and are Company
gross reserves. Summary results of the Sproule reports are highlighted as
follows:


- Total proved reserves increased 108% to 40.5 million boe.

- Proved plus probable reserves increased 95% to 59.5 million boe.

- Proved, probable and possible reserves increased 83% to 86.2 million boe.

- NPV 10% (before taxes) of $1.5 billion (2P), $2.0 billion (3P) increases of
91% and 85%, respectively despite a significant drop in commodity prices.


- Proved plus probable reserve additions replaced 2008 production more than 5.5
times.




CBU Working Interest Reserves(1)
Forecast Prices(2)
                                   Light and
                                  Medium Oil     NGL  Natural Gas   Total
                                       (mbbl)  (mbbl)       (mmcf)  (mboe)
---------------------------------------------------------------------------
Developed Producing                   20,191   1,694       27,696  26,501
Total Proved                          29,948   2,532       47,910  40,465
Proved + Probable (2P)                44,529   3,667       68,037  59,536
Proved + Probable + Possible (3P)     65,517   5,227       92,654  86,186

(1) Company working interest reserves excluding royalty income reserves
    and before deduction of royalties payable.
(2) Based on the Sproule price forecast effective December 31, 2008.



Royalty income volumes are excluded from Company gross reserves noted above but
are included in calculating Company net reserves and net present values.
Production in 2008 included 401 boepd of royalty income production.




CBU Net Present Value - Before Tax ($ millions)
Forecast Prices
As at December 31, 2008

                                              0%       5%      10%      15%
                                         -----------------------------------
Developed Producing                      1,395.5  1,069.2    874.8    747.4
Total Proved                             1,840.3  1,356.4  1,068.4    880.4
Proved + Probable (2P)                   3,008.5  2,005.7  1,489.9  1,181.8
Proved + Probable + Possible (3P)        5,058.4  2,890.7  2,001.0  1,526.9


CBU Net Present Value - After Tax ($ millions)
Forecast Prices
As at December 31, 2008

                                              0%       5%      10%      15%
                                         -----------------------------------
Developed Producing                      1,265.3    988.8    821.5    710.1
Total Proved                             1,573.5  1,177.1    938.6    781.2
Proved + Probable (2P)                   2,420.4  1,643.7  1,238.3    992.8
Proved + Probable + Possible (3P)        3,904.0  2,282.9  1,605.7  1,239.4


Reserve Reconciliation - Forecast Prices (mboe)

                                                       Proved +
                     Developed   Total      Proved+   Probable+
                     Producing  Proved     Probable    Possible
-----------------------------------------------------------------
CBU reserves at
 December 31, 2007       8,239  19,433       30,469      47,073
2008 production net
 of royalty income      (6,359) (6,359)      (6,359)     (6,359)
Acquisitions             5,967   9,321       14,248      19,668
Net additions
 excluding
 acquisitions           18,654  18,070       21,178      25,804
-------------           ------  ------       ------      ------
CBU reserves at
 December 31, 2008      26,501  40,465       59,536      86,186

CBU year-over-year
 increase in reserves      222%    108%          95%         83%
CBU production
 replacement               387%    431%         557%        715%


CBU Finding, Development and Acquisition ("FD&A") Costs(1)

                     Finding &
                   Development       Acquisitions(2)                 FD&A
----------------------------------------------------------------------------
Capital 
 expenditures
 (unaudited - 
  $000s)(3)
 Capital
  expenditures         545,833                    -                545,833
 Acquisition 
  capital(4)                 -              391,502                391,502
 -------------------   -------              -------                --------
 Total capital         545,833              391,502                937,335
 Less: land            132,653               83,032                215,685
 ----------            -------              -------                --------
 Adjusted capital
  excluding land       413,180              308,470                721,650
Change in future
 development costs
 ($000s)
 Total Proved            6,621               52,598                 59,219
 Proved + Probable
  (2P)                  (6,623)              75,619                 68,996
 Proved + Probable +
   Possible (3P)       (30,513)              90,919                 60,406
Total costs ($000s)
 Total Proved          552,454              444,100                996,554
 Proved + Probable
 (2P)                  539,210              467,121              1,006,331
 Proved + Probable +
 Possible (3P)         515,320              482,421                997,741
Total costs
 excluding land
 ($000s)
 Total Proved          419,801              361,068                780,869
 Proved + Probable
  (2P)                 406,557              384,089                790,646
 Proved + Probable +
  Possible (3P)        382,667              399,389                782,056
Net reserve
 revisions (mboe)
 Total Proved           18,070                9,321                 27,391
 Proved + Probable
  (2P)                  21,178               14,248                 35,426
 Proved + Probable +
  Possible (3P)         25,804               19,668                 45,472
---------------------------------------------------------------------------
FD&A costs ($/boe)
 Total Proved            30.57                47.65                  36.38
 Proved + Probable
  (2P)                   25.46                32.79                  28.41
 Proved + Probable +
  Possible (3P)          19.97                24.53                  21.94
FD&A costs excluding
 land ($/boe)
 Total Proved            23.23                38.74                  28.51
 Proved + Probable
  (2P)                   19.20                26.96                  22.32
 Proved + Probable +
  Possible (3P)          14.83                20.31                  17.20
----------------------------------------------------------------------------

(1) The aggregate of the exploration and development costs incurred in
    the most recent financial year and the change during that year in
    estimated future development costs generally will not reflect total
    finding and development costs related to reserve additions for that
    year.
(2) Includes the acquisition of Peerless Energy Inc. ("Peerless") and
    Rocor Resources Inc. ("Rocor")
(3) The Company's annual audit of its consolidated financial statements is
    not yet complete and accordingly all financial amounts are management's
    best estimates which are unaudited and subject to change.
(4) Calculated from the total purchase price plus net debt or working
    capital assumed.



Canadian Business Unit Operational Update

Petrobank's CBU achieved record results in 2008 with significant increases in
high netback reserves and production. CBU production increased 225% to 17,775
boepd in 2008 from 5,476 boepd in 2007 and proved plus probable reserves
increased by 95% year-over-year to 59.5 million boe.


We believe 3P reserve estimates more accurately reflect the true potential of
our assets as our reserves are derived largely from low risk, expansive resource
accumulations. CBU 3P reserves increased by 83% year-over-year to 86.2 million
boe and reserve additions of 45.5 million boe replaced our 2008 working interest
production more than 7 times. These 3P reserves have a net present value,
discounted at 10 percent, before tax of $2.0 billion, an 85% increase from 2007
despite steep declines in commodity prices. Our production and reserves are
heavily weighted (over 85%) to high value Bakken light oil and associated gas
and liquids. This allows Petrobank to achieve industry-leading netbacks and
demonstrates our high quality asset base. Of our year-end inventory of over 530
undrilled Bakken locations, only 162 have been assigned 2P reserves with an
additional 19 assigned possible reserves.


The finding, development and acquisition (FD&A) costs associated with our
operations represent investment for our growth in 2008 and an expansion of our
inventory of opportunities for the future. "All-in" 2008 CBU 2P and 3P FD&A
costs including changes in future development costs, were $28.41 and $21.94/boe,
respectively. These costs reflect all investments, including acquisitions,
extensive growth in Bakken infrastructure and acquisitions of new large land
positions. Petrobank spent $225.3 million on building significant positions in
established and emerging resource plays, primarily in the Montney, Horn River
and Bakken plays of Saskatchewan and British Columbia. If we remove the capital
associated with these acquisitions, our 2P and 3P FD&A costs drop to $22.32 and
$17.20/boe, respectively.


Bakken Activity

Petrobank was the most active operator in the Bakken during 2008 and we are now
the largest Bakken producer. We drilled 161 net wells in 2008, surpassing our
internal target of 154 wells, with a 99.4% success rate. We operated an average
of eight rigs through the year, and at times had up to 10 rigs running to
execute our development drilling program, which resulted in approximately three
new wells being added per week. Our operational expertise was also refined
through 2008, compressing the time from spud to on-stream for our wells,
inclusive of the multi-stage fracture stimulation, to 35 days. The Peerless
acquisition, in January of 2008, also contributed to our strong production base
and inventory of drillable locations. We have now developed an innovative way to
re-enter old producing Peerless trilateral wells and perform multistage fracs in
the two outside horizontal legs, with results exceeding our initial
expectations. These types of innovations will continue to drive value growth
from the Bakken.


Petrobank pioneered the horizontal fracture stimulation techniques that opened
up the true potential of this substantial resource, and we continue to find new
ways to improve well performance and expected ultimate recoveries from the
Bakken. Our recent efforts to further improve Bakken production have focused on
increasing the intensity of fracture stimulation completions (fracs) by:


1. Increasing the number of staged fracs from 8 to 11 in our 1,400 metre long
horizontal wells, representing a 38% increase in frac intensity within a section
of land,


2. Doubling the number of wells per section with shorter 600 to 700 metre long
horizontals and with 8 staged fracs in each horizontal, representing a 200%
increase in frac intensity within a section of land, and


3. Doubling the number of locations per section with each well having two 600 to
700 metre horizontal legs from the single vertical well bore and each leg
receiving 8 staged fracs, representing a 400% increase in frac intensity within
a section of land.


We continue to build on our innovative approach to maximizing value from the
Bakken resource and are monitoring production performance from these operations
to optimize drilling and fracture stimulation design.


Driven by strong Bakken results, the CBU increased production by 225% to 17,775
boepd in 2008, and average fourth quarter 2008 production increased by 170% to
22,274 boepd. As commodity prices continued to decline in late 2008, Petrobank
started to reduce drilling activity and we are now operating two drilling rigs.
Based on field estimates, CBU production averaged 22,000 boepd in February 2009.


In 2009, our primary focus will be to maintain our low-cost advantage through
selective drilling in the Bakken. We are positioned for strong reserve and
production growth, although we have slowed the pace of development. At current
commodity prices we expect to drill 40 wells and if oil prices improve we could
drill as many as 120 wells in 2009. Our activity levels will be linked to
commodity prices as we manage capital expenditures to maintain a strong balance
sheet and financial flexibility in a challenging commodity price and capital
market environment.


Part of our strategy in the Bakken is to operate centralized facilities to
capture additional value from the gas and natural gas liquids associated with
the light oil, and to ensure field efficiencies that maintain low operating
costs. To strengthen our infrastructure, three new facilities at Viewfield,
Creelman, and Freestone were connected to our main Midale plant through 100
kilometres of new pipelines. Together our facilities are now conserving more
than 6.5 mmcf/d of natural gas plus associated natural gas liquids and allow us
to maintain low operating costs while improving our overall project economics.
Our future plans include two more pipeline-connected facilities that are
scheduled to be built as drilling activity extends to the north. At our current
drilling pace, construction is expected to commence in 2010.


Through 2008, we continued to strengthen our Bakken land base and expand our
inventory of drilling locations. Through acquisition, Crown land sales, and
direct arrangements with mineral rights owners including the Ocean Man First
Nation, we have expanded our Bakken land base to 270 (236 net) sections. These
investments provide the foundation for our ability to continue to add value from
the Bakken for many years to come.


Beyond Bakken

Petrobank has also established strong positions in two massive natural gas
resource plays; the Montney and the Horn River Basin. The key to unlocking the
potential of these plays is through the use of horizontal wells and multi-stage
fracture stimulation technologies, similar to those pioneered by Petrobank in
the Bakken. We intend to capitalize on our evolving experience with advanced
fracturing techniques, with the goal of building a substantial, long-term
inventory of drilling locations at a low near-term cost.


In October 2008, through the acquisition of a private company, we acquired a
highly prospective position in the Montney tight gas play at Monias in
northeastern B.C. We have a 100% working interest in 14 contiguous sections of
land, and a 5.0 mmcf/d gas plant.


In December 2008, we drilled our first Montney horizontal well, and in February
2009 we performed seven multi-stage fracture stimulations in the upper portion
of the 135 meter thick Montney interval. The well flow tested at initial rates
in excess of 7.5 mmcf/d plus 180 barrels of natural gas liquids per day. The
well will be put on production before the end of the first quarter at a
restricted rate of 5.0 mmcf/d, filling the capability of our existing gas plant.
The consistent geology across our 14 sections of land establishes a 55-well
inventory of prolific Montney drilling locations. Our next steps will be to
install additional compression to increase our plant capacity to 10.0 mmcf/d and
then drill another well later in 2009. Our independent reserve evaluators have
only assigned reserves to our initial well.


A second resource play where we can apply our innovative completion experience
is in the Horn River Shale Basin, north of the Montney play in northeast B.C. As
this emerging play has developed, we began to build an acreage position, which
now encompasses 65 sections (43,428 acres) of 100% working interest lands and 14
sections of 15.5% working interest lands. Our first horizontal evaluation well
initiated drilling in late February in an area with all-season access close to
the Alaska Highway. The majority of the basin is characterized by a short
three-month operating season (January to March) due to the presence of thick
muskeg. All-season access at this first location will allow us to complete the
multi-stage fracture stimulation during the second quarter of 2009. Our
immediate focus will be on drilling test wells and developing a multi-year
inventory of drilling locations in the Muskwa and Evie shales. No reserves have
been assigned to our Horn River asset base as at December 31, 2008.


Cornwall

Late in 2007, we drilled an exploration well in the Cornwall area which tested
gas at 6.5 mmcf/day with 200 barrels per day of condensate. We will be
completing a short pipeline tie-in with compression installation and we expect
to have this well on production in early April at pipeline-restricted rates of
2.5 mmcf/day.


HEAVY OIL BUSINESS UNIT (HBU)

The following tables summarize the McDaniel & Associates Consultants Ltd.
("McDaniel") Whitesands reserves report as at December 31, 2008. Reserves and
contingent resources were assigned to the Whitesands leases (62 sections) near
Conklin Alberta and the report does not include any reserves or recoverable
resources associated with our Glover lease (10 sections), the Sutton Creek lease
(36 sections), our 50% interest in the Dawson property (4 sections), or our 50%
interest in the Kerrobert property (3 sections).


The McDaniel's estimates are based on SAGD technology as it is the presently
recognized technology used to define in-situ oil sands reserves and resources.
This does not in any way reflect the technical merits of the THAI(TM) process;
it is simply the only way for the Company to presently recognize a portion of
our reserve and resource potential on the Whitesands leases using industry
accepted norms. Once McDaniel's can independently certify reserves associated
with the THAI(TM) process, this SAGD-based analysis will be phased out.


THAI(TM) has many potential benefits over SAGD including expected higher
resource recovery (70%-80% versus 30%-50% for SAGD), lower production and
capital costs, minimal usage of natural gas and fresh water, a partially
upgraded crude oil product, reduced diluent requirements for transportation, and
lower greenhouse gas emissions. The THAI(TM) process also has the potential to
operate in lower pressure, lower quality, thinner and deeper reservoirs than
current steam-based recovery processes. The continued field demonstration of
THAI(TM) is expected to have an enormous impact on resource recovery and
estimates of reserve volumes.




Reserves and Resources (1) as of December 31,       2008     2007  Change
                                                   (mbbl)   (mbbl)      %
                                                  -------   ------      -
Probable Reserves (2P)                            68,982   25,476     171
Probable plus Possible Reserves (3P)              77,670   78,904      (2)
Low Estimate Contingent Resources (2) (3)        485,162  482,108       1
Best Estimate Contingent Resources (2) (3)       599,215  635,422      (6)
High Estimate Contingent Resources (2) (3)       737,062  725,872       2

2P + Best Estimate Contingent Resources          668,197  660,898       1
3P + High Estimate Contingent Resources          814,732  804,776       1

(1) Gross reserves and/or resources include the working interest
    reserves/resources before deductions of royalties payable to others.
(2) Contingent resources, as evaluated by McDaniel, are those quantities
    of bitumen estimated to be potentially recoverable using SAGD
    technology from known accumulations but are classified as a resource
    rather than a reserve primarily due to the absence of regulatory
    approvals, detailed design estimates and near term development plans
    and are in addition to 3P reserves.
(3) A low estimate means higher certainty (P90), a best estimate (P50)
    means most likely and a high estimate means lower certainty (P10).


Whitesands Before Tax Net Present Value - December 31, 2008 - $ Millions
 (1)(2)(3)
Net Present Value Discounted
 at:                                    0%       5%         8%      10%
-----------------------------           --       --         --      ---

Probable Reserves (2P)             1,239.5    601.3      392.8    294.3
Probable plus Possible
 Reserves (3P)                     1,648.4    788.2      522.6    400.4
Low Estimate Contingent
 Resources                         8,341.1  2,928.0    1,482.8    879.3
Best Estimate Contingent
 Resources                        12,590.5  4,402.8    2,387.8  1,573.6
High Estimate Contingent
 Resources                        18,341.3  5,806.3    3,102.6  2,070.1

2P + Best Estimate Contingent
 Resources                        13,830.0  5,004.1    2,780.6  1,867.9
3P + High Estimate Contingent
 Resources                        19,989.7  6,594.5    3,625.2  2,470.5

(1) Based on McDaniel forecast bitumen netback prices.
(2) Interest expenses and corporate overhead, etc. were not included.
(3) The net present values may not necessarily represent the fair market
    value of the reserves and/or resources.


Whitesands After Tax Net Present Value - December 31, 2008 - $ Millions
 (1)(2)(3)
Net Present Value Discounted
 at:                                    0%       5%         8%      10%
-----------------------------           --       --         --      ---

Probable Reserves (2P)               924.3    434.3      274.2    198.6
Probable plus Possible
 Reserves (3P)                     1,231.3    576.4      374.4    281.5
Low Estimate Contingent
 Resources                         6,211.9  2,031.9      921.9    461.0
Best Estimate Contingent
 Resources                         9,384.2  3,153.3    1,627.4  1,013.5
High Estimate Contingent
 Resources                        13,684.6  4,209.5    2,175.1  1,400.9

2P + Best Estimate Contingent
 Resources                        10,308.5  3,587.6    1,901.6  1,212.1
3P + High Estimate Contingent
 Resources                        14,915.9  4,785.9    2,549.5  1,682.4

(1) Based on McDaniel forecast bitumen netback prices.
(2) Interest expenses and corporate overhead, etc. were not included.
(3) The net present values may not necessarily represent the fair market
    value of the reserves and/or resources.



Heavy Oil Business Unit Operational Update

- Increased 2P reserves by 171% to 69.0 million barrels.

- Entered into our second THAI(TM)/CAPRI(TM) licence and joint venture agreement
for the application of our technology in a conventional heavy oil reservoir in
Saskatchewan.


- Received approval for Whitesands expansion in December 2008.

- Completed a 6-well delineation drilling program over the May River Project
area confirming a high quality reservoir for the project.


- May River application deemed complete and regulatory review is underway.

Whitesands Project

During the fourth quarter and into early 2009, P3B operations were impacted by
maintenance and workover operations. These included the replacement of the
thermocouple string in mid-October, the replacement of the A-3 air injection
well's packer assembly, and the tie-in of the new wellhead separation system.
Severe cold weather at the end of the year and into early 2009 delayed the
timely completion of these projects. Due to these events P3B was taken off-line
and successfully re-started three separate times.


Since commencing production on P3B, the well has exhibited negligible sand
production proving the effectiveness of the new liner design. The well is
currently producing 800 barrels of fluid per day on restricted flow at oil cuts
between 40 and 50% with minor sediments typically associated with heavy oil
production. The well is currently being restricted to balance overall gas and
liquids production into the plant. The well bore is now operating at 250 degrees
Celsius, and we are targeting a well bore temperature of at least 300 degrees
Celsius to assess CAPRI(TM) catalyst efficiency. Until we are operating above
the target temperature we do not expect a significant contribution to upgrading
from the catalyst. The current degree of oil upgrading and the produced gas
analysis from P3B are consistent with the P1 and P2 wells, indicating high
temperature combustion. Produced oil quality is consistently averaging
approximately 12 degrees API, compared to the native eight degree API bitumen
in-situ. We continue to recover a light oil condensate stream in the secondary
separators that is being carried in the vapour phase by the overhead gas system
and condensed out in the secondary separators. This lighter oil can be over 30
degrees API and recent analysis indicates that this stream could be up to 10
percent of the total produced hydrocarbons. This lighter oil component further
demonstrates significant in-situ thermal cracking and the potential for
co-production of other high-value by-products.


In P1 and P2 we have started to see a reduction in produced sand through the
de-sand vessels, which has resulted in improved on-stream factors and the wells
have had periods of high productivity, up to 400 bopd. Despite these minor
operational improvements, these wells still pose major operational challenges
and as a result we plan to either re-complete them with narrower slotted liners
or drill at least one replacement well. Regulatory approval for our expansion at
Whitesands was received late in the fourth quarter and in anticipation of this
approval we positioned ourselves to immediately execute the project. However, we
have decided that there is little benefit to be gained from significantly
expanding the Whitesands site. We have decided to cost-effectively convert
Whitesands into a modified 3 to 4 well THAI(TM) and THAI(TM)/CAPRI(TM)
demonstration site.


Kerrobert Project

Late in the fourth quarter we entered into royalty, technology license and a
joint venture agreements with True Energy Trust to apply Petrobank's patented
THAI(TM) heavy oil recovery technology on portions of their Kerrobert heavy oil
property in west central Saskatchewan.


Under the agreement, Petrobank will initially earn a 50% working interest in
three sections of land in the Kerrobert Mannville heavy oil pool. Subject to
regulatory approval, Petrobank and True will develop a two-well project to
demonstrate the THAI(TM) technology in this 20+ metre thick conventional heavy
oil reservoir. Petrobank will earn an additional ten percent gross overriding
royalty on True's share of all THAI(TM) production following a threshold reserve
recovery.


Petrobank will also earn a 50% working interest in ten additional sections of
True lands upon the expansion of the initial THAI(TM) project or development of
another project on these lands. In addition, Petrobank and True have established
an area of mutual interest over 30 additional sections of land to jointly
develop additional THAI(TM) projects.


This joint venture brings the THAI(TM) technology to the conventional heavy oil
resource base in Saskatchewan. We estimate that Saskatchewan has approximately
20 billion of barrels of unrecovered conventional heavy oil resource that can be
commercialized using our THAI(TM) technology. We expect to file our Kerrobert
application early in the second quarter of 2009 and anticipate approval within
one month of filing. Saskatchewan is actively encouraging oil and gas
development and the application of advanced technologies.


May River Project

The May River Project is the commercial development of Petrobank's leases
(including the Whitesands project) west of Conklin, Alberta utilizing THAI(TM).
The May River design builds on the experience gained from the Whitesands pilot
plant and is intended to be built in phases, with initial production capacity of
10,000 barrels of THAI(TM) oil per day, and an ultimate capacity of 100,000
barrels per day.


The regulatory application for May River's first phase was filed with the Energy
Resources Conservation Board and Alberta Environment at the end of 2008. The
application has been deemed complete and is now moving through the regulatory
process.


The front end engineering and design for the project began in the fourth quarter
of 2008, and we expect to have completed this phase of engineering by mid-year.
The design incorporates power generation utilizing low energy produced gas,
sulphur recovery, is CO2 capture ready, and will be a net water producer rather
than a water user, making the May River project a leading environmentally
sustainable process for oil sands and heavy oil development. The Project is
utilizing a modular approach that is designed to be installed and operated on
heavy oil projects world-wide.


Dawson Project

The Dawson Project is a joint venture involving our first Alberta-based, third
party THAI(TM) license. Our joint venture partner is now Shell Canada Limited
who acquired Duvernay Oil Corp. in August 2008. The project is located near
Peace River Alberta and will be developed in the Bluesky formation. The upper
portions of this formation contain 11 degree API heavy oil, comparable to other
conventional heavy oil reservoirs throughout western Canada. The project scope
consists of two well pairs and our simplified facility design. In August 2008, a
stratigraphic well was drilled on the project site that will be used as a
thermal observation well during the project's operating phase. The regulatory
application for the project is complete, and, following review with our new
partner, is expected to be filed by the end of March.


Sutton Creek, Saskatchewan

We have acquired 35 kilometres of 2D seismic on our 23,040 acre oil sands lease
in northwest Saskatchewan. We are currently processing the data in order to
identify potential exploration drilling targets.


Business Development

Our wholly-owned subsidiary, Archon Technologies Ltd., continues to evaluate a
number of innovative engineering, environmental, and other value-added
technology options to improve operational efficiency and reliability, and to
reduce the overall environmental impact of heavy oil recovery. Other
technologies being assessed include enriched oxygen injection, power generation
using produced lean gas, enhanced produced water quality, and incremental
surface upgrading.


We continue to receive world-wide interest in our technology because of its
superior economic and environmental benefits. Our joint venture strategy is to
demonstrate and commercialize THAI(TM) in a wide range of large global resource
opportunities. The current economic environment has influenced our negotiations
and we continue, to make progress and expect to successfully conclude an
additional joint venture in the near term.


LATIN AMERICAN BUSINESS UNIT (LABU) - PETROMINERALES LTD. (TSX:PMG - OWNED 76.5%)

Petrobank is also pleased to report on our 2008 year-end third party reserve
report with respect to our LABU. Total proved reserves in Colombia have
increased by 22%, based on the DeGolyer and MacNaughton ("D&M") evaluation as at
December 31, 2008. All reserves stated herein are based on forecast prices and
costs and are company interest reserves after Ecopetrol's (the State oil
company) share, and before royalties. D&M's work incorporates an update of their
comprehensive geological and petrophysical evaluation of the Corcel, Orito,
Neiva and Joropo properties. The evaluation does not include any reserves
associated with our recent exploration successes on the Mapache Block, our
Corcel D-3 well, or our remaining 13 exploration blocks. 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.


Summary results of the D&M report are highlighted as follows:

- Total proved reserves increased by 22% to 25.2 million barrels.

- Total proved plus probable reserves remained constant at 36.8 million barrels.

- Total proved, probable and possible reserves increased by 6% to 55.0 million
barrels.


- Proved reserve additions replaced 214% of 2008 production.

- Total proved plus probable forecasted production for 2009 is 23,148 bopd.

- Proved, and total proved plus probable F&D costs of US$24.95/bbl and
US$30.66/bbl in 2008, respectively, which includes changes in future development
costs and expenditures incurred on our 13 exploration blocks that were not
evaluated by our reserve evaluators.




LABU Gross Reserves Reconciliation (mbbls)
                                     Proved                       Proved +
                                  Developed    Total  Proved +  Probable +
                                  Producing   Proved  Probable    Possible
---------------------------------------------------------------------------
December 31, 2007 reserves            9,118   20,597    36,977      51,930
2008 production                      (4,014)  (4,014)   (4,014)     (4,014)
Net additions                         9,125    8,591     3,859       7,022
-------------                         -----    -----     -----       -----
December 31, 2008 reserves           14,229   25,174    36,849      54,965
Year over year increase in
 reserves                                56%      22%        0%          6%
Production replacement                  227%     214%       96%        175%


Net Present Value - Before Tax - Forecast Prices (US$ millions)
                                      0%              5%      10%      15%
                                 ------------------------------------------
Proved Developed Producing         606.9           540.9    487.2    454.1
Total Proved                     1,201.3           989.1    831.9    726.9
Proved + Probable                1,812.5         1,476.6  1,229.4  1,063.8
Proved + Probable + Possible     2,738.7         2,199.9  1,808.6  1,554.6


Net Present Value - After Tax - Forecast Prices (US$ millions)
                                      0%              5%      10%      15%
                                 ------------------------------------------
Proved Developed Producing         529.1           469.6    421.2    390.8
Total Proved                       960.3           798.3    676.5    593.1
Proved + Probable                1,357.4         1,114.2    933.3    809.2
Proved + Probable + Possible     1,979.1         1,598.9  1,320.6  1,136.3



Conference Call

Petrobank management will hold a conference call on Thursday, March 5, 2009 at
9:00am (Mountain Time) to discuss Petrobank's reserves results for the year
ending December 31, 2008.


John D. Wright, President and Chief Executive Officer of Petrobank, along with
Chris J. Bloomer, Senior Vice President and Chief Operating Officer, Heavy Oil,
Corey C. Ruttan, Senior Vice President and Chief Financial Officer, Gregg Smith,
Senior Vice President and Chief Operating Officer, Canada and Jack Scott,
Executive Vice President and Colombian Country Manager, will chair the investor
conference call. The investor conference call details are as follows:




Date:        Thursday, March 5, 2009
Time:        9:00am (Mountain Time)
Webcast 
 Link:       http://events.onlinebroadcasting.com/petrobank/030509/index.php
Dial-in
 Number:     1-800-769-8320
Taped 
 Re-play:    1-416-695-5800 or 1-800-408-3053
Reference 
 Number:     8832083
Available
 until:      March 12, 2009



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.


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.


Resources and Contingent Resources

In this press release, Petrobank has disclosed estimated volumes of "contingent
resources" or "resource" estimates. "Resources" are oil and gas volumes that are
estimated to have originally existed in the earth's crust as naturally occurring
accumulations but are not capable of being classified as "reserves" as described
below. The following are excerpts from the definitions of resources and
reserves, contained in Section 5 of the COGE Handbook, which is referenced by
the Canadian Securities Administrators in "National Instrument 51-101 Standards
of Disclosure for Oil and Gas Activities": Contingent Resources are those
quantities of petroleum estimated, as of a given date, to be potentially
recoverable from known accumulations using established technology or technology
under development, but which are not currently considered to be commercially
recoverable due to one or more contingencies. Contingencies may include factors
such as economic, legal, environmental, political, and regulatory matters, or a
lack of markets. It is also appropriate to classify as contingent resources the
estimated discovered recoverable quantities associated with a project in the
early evaluation stage. Contingent Resources are further classified in
accordance with the level of certainty associated with the estimates and may be
subclassified based on project maturity and/or characterized by their economic
status. Resources and contingent resources do not constitute, and should not be
confused with, reserves.


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.