Mr. Trent Yanko reports

LEGACY OIL + GAS INC. PROVIDES OPERATIONAL UPDATE - SPEARFISH LIGHT OIL RESOURCE PLAY OUTPERFORMING

Legacy Oil + Gas Inc. has provided an operational update for its activities in the Williston basin and an interim update of its recent Turner Valley drilling success.

In the first quarter of 2012, the company drilled 49 (35.1 net) wells all targeting light oil, with a 100-per-cent success rate. This total included 13 (10.2 net) horizontal wells in its Spearfish play at Pierson and Bottineau county, North Dakota. The company continues to be on track to meet its full-year production guidance.

Spearfish play

At Pierson, Manitoba, the company's drilling, completion design and production practices have demonstrated superior results in the Spearfish compared with both the previous operator's drilling and the type curve used in the 2011 year-end independent engineering report. Production from Legacy drilled wells are shown in the attached table.

Initial rate period  Barrels of oil per day  Number of wells producing

30-day average                           96                         16            
60-day average                           86                         12            
90-day average                           95                         10            

Legacy has achieved these rates while constraining production to maximize ultimate recovery. All the above wells carry significant fluid levels, with some wells having fluid just below surface. The company estimates that initial productive capability of these Pierson wells would be far in excess of the constrained rates shown in the attached table. Furthermore, five wells with the longest producing history (147 days on average) have averaged 101 barrels of oil per day per well over this period. The company believes these achievements will lead to superior long-term performance, higher per-well reserve bookings plus additional locations booked. A production graph depicting these results is included in the company's latest corporate presentation available on its website.

Legacy has identified 210 net locations on its lands at Pierson, approximately 77 per cent unbooked in the most recent independent reserves report. Current production in the area is greater than 2,000 barrels per day, and with the installation of a central oil battery and the tie-in of 29 wells thus far, operating costs are anticipated to improve significantly.

At North Dakota, the company has had similar success in the Spearfish. Legacy lands in Bottineau county represent a significant light oil development opportunity that has been essentially unbooked in the recent independent reserves report. Production results from Legacy drilled wells are shown in the attached table.

Initial rate period  Barrels of oil per day  Number of wells producing

30-Day average                           90                          5            
60-Day average                          102                          5            
90-Day average                           98                          5            

Legacy has achieved these rates while constraining production to maximize ultimate recovery as all wells carry fluid levels. The company estimates that initial productive capability of these Bottineau county wells would be in excess of the constrained rates shown in the attached table. Furthermore, three wells with the longest producing history have averaged 77 barrels of oil per day per well over the initial 180 days. The company believes these achievements will lead to superior long-term performance, higher per-well reserve bookings plus additional locations booked. A production graph depicting these results is included in the company's latest corporate presentation available on the company's website.

The company has also drilled two stratigraphic wells on the northern portion of its lands, confirming net pay of approximately nine metres, porosity of 13.1 per cent and original oil in place of greater than 10 million barrels per section.

Legacy has identified 230 net locations on the north portion only of its lands in Bottineau county, approximately 97 per cent unbooked in the most recent independent reserves report. This location count could grow significantly as Legacy derisks the opportunity on the southern portion of its lands over the coming years.

The total Spearfish play development drilling inventory of 440 net potential locations (88 per cent unbooked) is based on eight wells per section. Based on other operators' results in the play, Legacy's location count could increase by 50 per cent through downspacing. In addition, the company is evaluating the waterflood potential in the play and anticipates recovery factors of up to 14 per cent based on analogous pools.

Bakken play

At Taylorton, continuing refinements of the fracture stimulation treatments have led to continual improvements in production rates, with a number of recent wells achieving the highest initial production rates to date. Legacy drilled nine wells that had 30-day initial production rates in excess of 260 barrels of oil equivalent per day per well. These wells have continued to perform, with 90-day average production rates of 260 boe per day per well and six-month production rates averaging 190 boe per day per well. The company has plans to expand the 2011 waterflood project in 2012. This pilot waterflood could lead to incremental reserve bookings and lower production decline rates, and could be further expanded depending upon results.

At Star Valley, Legacy has applied its leading fracture stimulation design developed in Heward to this area with good success. The two Legacy-operated wells brought on in the first quarter or 2012 have 30-day initial rates of 225 boe per day per well, and current production is still approximately 195 boe per day per well. As a result, the company believes the Bakken play boundaries have expanded and has increased its drilling location inventory to more than 50 net wells in Star Valley.

Conventional Mississippian

Legacy has remained active drilling conventional Mississippian horizontal wells throughout its southeast Saskatchewan properties. These wells typically cost approximately $1-million to drill, complete, equip and tie in as they generally are not fracture stimulated, and have excellent rates of returns and quick payouts.

At Edenvale, four wells have been drilled targeting the Tilston. Two of these wells have demonstrated constrained 30-day initial production rates of 125 boe per day per well and 60-day initial production rates of 115 boe per day per well. Both of these wells carry high fluid levels. The two other wells have recently been brought on production and are producing at approximately 220 boe per day per well with low water cuts.

At Alameda/Steelman, Legacy's recent wells targeting the Frobisher and Midale have achieved good production results. The four wells drilled in the first quarter of 2012 have 30-day initial production rates of 215 boe per day per well. One well at Alameda continues to produce in excess of 325 boe per day after more than 40 days of production. A Steelman well has averaged a constrained 195 boe per day over the past 76 days. Both of these wells carry high fluid levels. The company has identified a number of follow-up locations in both areas.

At Manor, a step-out horizontal well in the Tilston has averaged 125 boe per day at a 26-per-cent water cut over the first 22 days of production. This well has led to a significant pool extension and the identification of eight (eight net) potential offset locations on Legacy lands.

Turner Valley interim update

At Turner Valley, Legacy's first Rundle light oil horizontal well at Hartell No. 6 has stabilized at approximately 170 boe per day. Horizontal wells in Turner Valley have typically come on production with a high water cut, and as load fluid is recovered, the water cuts decrease and the oil rates increase. This phenomenon has been observed in the 22 previously drilled, grassroots, unfractured horizontal wells in Hartell No. 6 and in the recently completed Legacy-drilled horizontals. In turn, the company expects the Turner Valley horizontal wells to produce at stable, low-decline rates based on the production profile demonstrated by the previously drilled, grassroots, unfractured horizontal wells in the pool. These wells have been declining at less than 5 per cent per year on average. Furthermore, 14 previously drilled, unfractured horizontal wells came on production in excess of 100 boe per day, and two of those came on production in excess of 400 boe per day. These 14 wells have recovered between 200,000 boe and 450,000 boe to date, showing the minimum potential of the Legacy fracture-stimulated horizontal well drilling program currently under way.

Three additional wells were drilled in late 2011, and were completed and put on production between late January and early March. These wells are exhibiting the expected improving oil cut profile since coming on production and should be reaching peak oil rates in the next two to six weeks. The three most recently drilled wells are producing with current capabilities averaging over 325 barrels per day per well of total fluid. Current early-time average production rates of approximately 100 boe per day per well are above the type curve used by the independent reserve evaluator in the most recent engineering report and continue to improve.

We seek Safe Harbor.