Bonterra Energy Corp. Announces 2012 Budget and Guidance

CALGARY, ALBERTA--(Marketwire - Dec. 19, 2011) - Bonterra Energy Corp. (Bonterra or the Company) (www.bonterraenergy.com) (TSX:BNE) is pleased to announce its Board of Directors has approved a 2012 capital expenditure program budgeted at $65 million which targets production growth of approximately 10 percent in 2012.

In 2011, Bonterra maintained its focus on providing investors with continued growth on a per share basis, a sustainable pace of development and monthly income through its dividend policy. The Company will continue to follow this corporate strategy in 2012 by mainly pursuing the development of its horizontal drilling program on its significant Cardium light oil play that will consist of an aggressive multi-well horizontal drilling program in the main Pembina Cardium pool.

Bonterra currently estimates that it has a 15 year drilling inventory predominantly in the Pembina and Willesden Green Cardium pools that will allow the Company to sustain its current business model.

2012 Corporate Guidance

• The Board of Directors has approved a capital development program of $65 million which will fully target light oil prospects. All 2012 Cardium wells are expected to be horizontal multi-stage frac wells.

• Currently 33 gross (23.83 net) wells are planned with 21 gross (13.33 net) wells targeting the main pool of the Pembina Cardium, most notably in the Blue Rapids and Berrymoor Cardium units and 11 gross (9.5 net) wells targeting the halo area of the Pembina Cardium and Willesden Green fields. Bonterra will also be drilling at least one new oil play using horizontal technology in 2012.

• Full year production levels are expected to average between 6,700 and 7,000 BOE per day, an increase of approximately 10 percent over 2011 levels. The Company's 2011 exit rate is expected to be between 6,800 and 6,900 BOE per day.

• The corporate production profile is anticipated to be approximately 73 percent light oil and liquids and 27 percent natural gas (mainly solution gas).

• Operating costs are expected to be approximately $15.00 per BOE, relatively consistent with estimated 2011 costs of $14.50 to $15.25 per BOE.

• Bonterra anticipates fully funding its capital expenditure program out of cash flow, proceeds from the exercise of employee stock options, sale of investments and its bank borrowing facility.

• The dividend payout ratio is estimated to range between 50 and 65 percent of funds flow in 2012. Bonterra will consider increasing the dividend should crude oil pricing remain strong coupled with the anticipated production increases.

• Bonterra will continue to maintain its balance sheet strength and forecasts its net debt to annualized cash flow from operations to be within a range of 1.0 to 1.5 times.

Bonterra's capital development program may be affected by items such as drilling results, commodity prices, and industry, regulatory and economic conditions. The Board of Directors and management will regularly review the capital program during the year and will make any adjustments to the amount and targets if required. The corporate guidance for 2012 is based on estimated future crude oil and natural gas prices and as such, guidance estimates may fluctuate with changes in commodity prices. Capital expenditure guidance excludes potential acquisitions which will be separately considered and evaluated and will result in an increase to the existing capital expenditure estimate of $65 million.

Caution Regarding Engineering Terms

Disclosure provided herein in respect of barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio of 6 MCF to 1 barrel has been used in all cases in this disclosure. This BOE conversion ratio is based on an energy equivalency conversion method primarily available at the burner tip and does not represent a value equivalency at the wellhead.

Caution Regarding Forward Looking Information

Certain information set forth in this press release, including management's assessment of Bonterra's future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Bonterra's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Bonterra's actual results, performance or achievement could differ materially from those expressed in, or implied by these forward-looking statements, and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Bonterra will derive therefrom. Bonterra disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.