Petrobank Receives License for Exploratory CBG Well

Calgary, AB – October 27, 2004: Petrobank Energy and Resources Ltd. (“Petrobank”) announces that it has received all government and regulatory approvals to drill an exploratory coalbed gas (CBG) well near Princeton.

“We are truly pleased that our CBG exploration program is finally getting underway,” said Gregg Smith, Vice-President, Canada, Petrobank. “Our drilling activities will help us assess the potential of this field and moreover, if the reserves are sufficient to warrant further development in 2005.”

Petrobank will drill a test well located 4.5 km southwest of Princeton. As the well is drilled, a constant monitoring of well bore characteristics will be conducted. All findings from drilling activity will be provided confidentially to the Government of British Columbia to allow it to monitor regulatory compliance.

“While here in Princeton, we will make every effort to conduct our business in a safe and environmentally friendly manner with particular emphasis on local traffic management, noise control, and effective water-handling,” said Smith. “All produced water from the well will be transported by truck and disposed of in government-approved disposal wells. We will ensure this CBG project is managed properly, incorporating best industry practices every step of the way.”

Petrobank expects that its project will have numerous tangible benefits for the residents of Princeton during the construction period through local purchase of construction materials, supplies, services and hotels, equipment, and fabrication. If gas production is commercial, provincial royalties will be paid which will benefit the entire province.

Petrobank will comply, and in many situations, exceed, government regulations (among the leading requirements in North America). Community members concerns will be addressed throughout the life of this project. The company encourages area residents who may have specific questions, suggestions or concerns to call them immediately at 1.866.764.4571.

“Producing natural gas from coalbeds can be a viable and environmentally sound way to meet this province’s future natural gas needs. Like conventional natural gas, NGC is a cost effective and clean burning fuel that has many applications, such as heating your home,” said Smith.

Petrobank has considerable experience in conventional oil and gas operations. Like conventional wells, this exploratory CBG test well will involve drilling down to the reservoir, completing the well, connecting it to pipelines and pending successful results, producing gas.

Petrobank Energy and Resources Ltd. (Petrobank) is a Calgary-based oil and natural gas production company with operations in western Canada and Colombia, South America. Petrobank pursues new strategic domestic and international opportunities, which complement its existing operating base, where risk factors can be managed and significant return on investment may be achieved. Petrobank is publicly traded on the Toronto Stock Exchange under the symbols PBG and PBG.NT.A. Additional corporate information can be found at www.petrobank.com