Online Energy Inc. Announces Strategic Acquisition

Online Energy Inc. (the "Company" or "Online") (TSX VENTURE:ONL) is pleased to
announce that it has entered into an agreement with an arm's length public
company pursuant to which Online has acquired producing oil and gas assets and
approximately 2,508 net acres of associated undeveloped land in the Paddle River
area of west-central Alberta (the "Acquisition"). Total consideration paid for
the Acquisition was $1.0 million. The effective date of the Acquisition is May
1, 2011, and closing occurred on June 28, 2011.


The Acquisition has the following characteristics:



--  Current production of 28 boe/d (46% oil and liquids) 
--  12.25 sections of land (64% average working interest ("WI")) 
--  2,508 net acres of undeveloped land 
--  20% WI in the vertically developed Paddle River Ostracod A & C Oil Pools
--  100% and 96.5% WI in 2 vertically developed Notikewin liquids-rich gas
    pools 



The Acquisition is within Online's Greater Paddle River core area of operations
located in west-central Alberta. Acquired production is from 7 vertical wells
including 3 (0.60 net) Ostracod light oil wells and 2 (1.96 net) operated
Notikewin liquids-rich natural gas wells.


The Acquisition is strategic in that it provides additional horizontal
multi-frac development drilling locations on the Company's two primary
development projects within its core area. This additional drilling inventory
consists of 38 gross (21.89 net) potential Ostracod horizontal oil locations and
2 gross (1.96 net) potential Notikewin horizontal gas locations.


Within the Greater Paddle River area, Online continues to focus on oil
exploration and development projects in the Viking, Ostracod and Nordegg
formations and liquids-rich natural gas opportunities in the Notikewin and
Nordegg formations. As of the closing of the Acquisition, the Company controls
approximately 32,220 net acres of undeveloped land in this area and will
continue to accumulate assets through Crown land sales and third-party
acquisitions. In addition, the Company controls an upside potential of 163 gross
(124.0 net) Ostracod horizontal oil locations, 6 gross (4.2 net) Notikewin
horizontal gas locations, 16 gross (16.0 net) Viking and Nordegg vertical oil
locations and in excess of 27 gross re-activations, re-entries and
re-completions of existing wellbores. This significant and multi-year inventory
provides a substantial platform for ongoing reserve and production growth.


The Company is currently preparing to drill its initial Ostracod horizontal
multi-frac oil well at Paddle River and is ultimately planning for a multi-well
project. Drilling of the initial well is expected to commence upon completion of
licensing procedures and the securing of drilling equipment.


Online is also designing an initial horizontal multi-frac well into the
Notikewin liquids-rich gas pool on its Niton property.


In addition, the Company's re-entry and re-activation program is set to
recommence. Three additional operations are planned and will proceed as
equipment availability and surface conditions allow.


Second quarter 2011 production is anticipated to average 315 boe/d and,
including production associated with the Acquisition, is currently approximately
350 boe/d.


The Company has 41.3 million shares outstanding and working capital is estimated
to be $8.8 million at June 30, 2011.


Online Energy Inc. is a domestic junior oil and gas exploration and production
company with assets in Alberta. Online trades on the TSX Venture Exchange under
the symbol ONL. The Company has posted an updated shareholder presentation 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 judgments
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.