PetroBakken Announces Repurchase and Cancellation of US$450 Million Principal Amount of Senior Unsecured Convertible Bonds

CALGARY, ALBERTA--(Marketwire - Jan. 26, 2012) -

NOT FOR DISSEMINATION IN THE UNITE STATES OR RELEASE OVER UNITED STATES WIRE SERVICES

PetroBakken Energy Ltd. ("PetroBakken" or "Company") (TSX:PBN) announces that, subject to completion of our previously announced high yield notes offering (the "Notes Offering"), all conditions have been met for the completion of the repurchase of US$450 million of principal amount the Company's 3.125% Senior Unsecured Convertible Bond Issue bearing ISIN NO 001 0563240 (the "Existing Bonds") at a price of US$99,000 per US$100,000 of principal amount (the "Purchase Price").

As the aggregate principal amount of Existing Bonds validly tendered at or below the Purchase Price exceeded US$450 million, subject to certain terms and conditions, PetroBakken will repurchase Existing Bonds in the following order of priority: 1) all non-competitive offers will be accepted; 2) all competitive offers with an offer price below the Purchase Price will be accepted; 3) competitive offers with an offer price equal the Purchase Price will be accepted, subject to proration. All competitive offers with an offer price above the Purchase Price will be rejected. Settlement and immediate cancellation of US$450 million principal amount of Existing Bonds is expected to occur on or about January 31, 2012, subject to successful completion of the Notes Offering.

Following this transaction, Petrobakken will have US$300 million principal amount of Existing Bonds outstanding.

ABG Sundal Collier Norge ASA acted as manager of the repurchase of Existing Bonds on behalf of PetroBakken.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction. The securities referenced herein have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States except in transactions exempt from or not subject to the registration requirements of the U.S. Securities Act of 1933, as amended, and applicable state securities laws.

PetroBakken Energy Ltd. is an oil and gas exploration and production company combining light oil Bakken and Cardium resource plays with conventional light oil assets, delivering industry leading operating netbacks, strong cash flows and production growth. PetroBakken is applying leading edge technology to a multi-year inventory of Bakken and Cardium light oil development locations, along with a significant inventory of opportunities in the Horn River and Montney gas resource plays in northeast BC. Our strategy is to deliver accretive production and reserves growth, along with an attractive dividend yield.

Certain information provided in this press release constitutes forward-looking statements. Specifically, this press release contains forward-looking statements relating to the completion of the Notes Offering and the proposed future repurchase of the Existing Bonds. The forward-looking statements are based on certain key expectations and assumptions, including expectations and assumptions concerning the market conditions and the ability to complete the proposed transactions. Although we believe that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with general economic and market conditions impacting the successful completion of the Notes Offering and repurchase of Existing Bonds on acceptable terms. Except as may be required by applicable securities laws, PetroBakken 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.