Mr. John Wright of Petrobank Energy reports

PETROBANK AND PETROMINERALES ANNOUNCE SPINOUT OF PETROMINERALES HOLDINGS BY PETROBANK

Petrobank Energy & Resources Ltd. and Petrominerales Ltd., a 66-per-cent-owned subsidiary of Petrobank, are conducting a corporate reorganization that will see Petrobank shareholders receive Petrobank's proportionate interest in Petrominerales. Petrobank and Petrominerales have signed an arrangement agreement detailing the terms and conditions of the reorganization. The board of directors of each company, after having received a recommendation from an independent committee of its directors, has unanimously approved the reorganization.

Pursuant to the reorganization, a new Alberta corporation will be formed (New Petrominerales), which will, through a series of transactions under the reorganization, directly or indirectly acquire all of the outstanding shares of Petrominerales. Existing Petrominerales shareholders will receive one share of New Petrominerales for every share of Petrominerales they hold. Petrobank shareholders will receive approximately 0.62 share of New Petrominerales and one replacement common share of Petrobank for each Petrobank common share held. There will be no change in the total number of shares outstanding for either Petrobank or Petrominerales.

This transaction is designed to enhance long-term value for Petrobank and Petrominerales shareholders. The reorganization is consistent with the Petrobank's long-held corporate goal of enhancing shareholder value by creating strong, independent companies. Benefits of the reorganization include:

• Petrobank shareholders will receive direct ownership in the shares of New Petrominerales;
• All new and existing Petrominerales shareholders will directly receive future dividends from New Petrominerales;
• Canadian individual shareholders of New Petrominerales will receive dividends eligible for the Canadian dividend tax credit;
• New Petrominerales's public float will increase, providing additional liquidity to shareholders;
• New Petrominerales is expected to qualify for inclusion in the S&P/TSX Composite Index following the reorganization;
• Increased valuation for Petrobank and New Petrominerales may result from the reduction or elimination of any holding company and parent company share price trading discounts;
• The expected date of the reorganization of Dec. 31, 2010, may allow U.S. Petrobank shareholders to benefit from a lower tax rate on the transaction as the receipt of the New Petrominerales shares are expected to be treated as qualified dividends, eligible for lower tax rates in 2010, compared with the ordinary income tax rates that are expected in 2011.

The reorganization will not result in any changes to the existing board and senior management of Petrominerales. Petrominerales will continue to pursue a repeatable, high-impact exploration strategy, focused in Colombia and Peru. The reorganization will not affect the Petrominerales dividend policy and shareholders are expected to continue to receive 12.5 cents per share paid on a quarterly basis. The first dividend payable on New Petrominerales common shares is expected in mid-April for shareholders of record on March 31, 2011.

Following the reorganization, Petrobank will continue to own all existing assets, other than Petrominerales, including the heavy oil and bitumen assets, Archon Technologies Ltd., including the THAI and other related technologies, and ownership of 109.8 million shares of PetroBakken Energy Ltd. Petrobank is well positioned to finance its heavy oil and oil sands projects, and monetize its THAI and other related technologies. It expects to continue to receive approximately $105-million of dividends annually from PetroBakken. In addition, it is in discussions with its lead bank to increase its credit facility and extend it to a three-year term. With the continuing Kerrobert expansion, and progress on regulatory approvals at its Dawson and May River developments, Petrobank's heavy oil business unit expects to become fully commercial in the near future.

Petrobank will apply to have the new Petrobank common shares trade on the Toronto Stock Exchange under the existing PBG symbol. New Petrominerales will apply to have the New Petrominerales common shares trade on the Toronto Stock Exchange under the existing PMG symbol. Petrominerales is updating the listing documentation to apply to list New Petrominerales common shares for trading on the Bolsa de Valores de Colombia (Colombian stock exchange).

The reorganization is subject to the approval of the shareholders of each of Petrobank and Petrominerales. It is anticipated that a joint management information circular containing additional information with respect to the reorganization will be mailed to each Petrobank and Petrominerales shareholder in mid-November, and meetings of the shareholders of each of Petrobank and Petrominerales will be held in mid-December, 2010. The directors of each company, upon considering the recommendations of their respective independent committee, have unanimously recommended that their shareholders approve the reorganization. Pending approvals from the shareholders of each company, approval of applicable courts, receipt of appropriate regulatory approvals and satisfaction of other customary closing conditions, including the receipt of relevant tax rulings, the transaction is scheduled to become effective on Dec. 31, 2010.

TD Securities Inc. acted as sole financial adviser to the independent committee of Petrobank.

The reorganization is expected to be non-taxable to Petrobank and Petrominerales, as well as Canadian resident shareholders of both companies. Canadian resident shareholders of Petrominerales will be required to file a joint tax election with New Petrominerales to achieve a tax-deferred exchange of their Petrominerales shares for New Petrominerales shares. For U.S. shareholders of Petrobank, this transaction will be treated as a taxable dividend according to U.S. tax laws. It is expected that the dividend will be considered a qualified dividend for U.S. tax purposes, subject to the reduced tax rates applicable to long-term capital gains for individuals, provided shareholders meet the holding-period requirements. For U.S. shareholders of Petrominerales, this transaction is expected to be non-taxable. Tax information will be published on the websites of both Petrobank and Petrominerales in the near future; however, shareholders are encouraged to seek the advice of their own tax professionals.