PetroShale Announces Successful Mondak Test Results in the Upper Bakken Shale

PetroShale Inc. ("PetroShale") (TSX VENTURE:PSH) is pleased to announce initial
results from drilling activities in its Mondak field.


Highlights:



--  PetroShale, in partnership with operator Slawson Exploration Company,
    Inc. ("Slawson Exploration"), has successfully completed their initial
    appraisal of the 40,000 acre Mondak shale play with four stimulated
    horizontal test wells in the Upper Bakken Shale. Two more wells have
    been drilled and are awaiting flow back or completion. PetroShale owns a
    10% working interest ("WI") in the Mondak area of mutual interest
    ("AMI"). 

--  Based upon the results of these test wells, PetroShale and Slawson will
    start a two rig, two wells per month program immediately, increasing to
    three rigs in 2013. 

--  Early type curves on the preferred completion method to date indicate
    estimated ultimate recoveries ("EUR") analogous to the un-stimulated
    wells Slawson drilled in 1994 and 2007. Those wells average 730,000 BO
    EUR. 

--  Each well has been completed with different techniques. The preferred
    completion formula to date, used in the well called "Culverin," showed a
    24 hour initial production rate ("IP") of 476 bopd flowing, and after 90
    days Culverin is producing 200 bopd on pump. 

--  Well costs have dropped from $6 million to below $5 million for
    stimulated, one-mile laterals.  

--  Production is 98% oil with netbacks in the high $50s per barrel at $90
    WTI. Netbacks will increase as additional infrastructure is completed. 

--  Based on test well results and micro-seismic, Mondak has more than 200
    drilling locations in the Upper Bakken Shale. In 2013 PetroShale and
    Slawson intend to test three more formations in addition to the shale:
    Red River, Mission Canyon (analogous to Oklahoma Mississippian play),
    and the Tyler. 



Detailed Release:

PetroShale announces the initial results from its first four test wells in the
Mondak field of the Williston Bakken operated by Slawson Exploration. These four
horizontal test wells in the 40,000-acre Mondak play are noteworthy for having
been drilled and completed in the Upper Bakken Shale itself. These wells bracket
most of the play from East to West and North to South (30 mile spread) and are
significant step-outs from the original five un-stimulated wells drilled by
Slawson between 1994 and 2008 that originally defined the Mondak play. 


Based on the successful test results of these initial wells, Slawson and
PetroShale are moving to a three rig, three wells-per month program in the
fourth quarter of 2012. PetroShale's capex for Mondak in 2013 is expected to be
$25 million.


To date the results have been "tight hole" at Slawson's request due to an
ongoing leasing program and the advanced techniques used in drilling and
completing the actual Upper Bakken Shale rather than the middle Bakken. The
Mondak AMI with Slawson has grown from 35,000 acres to 40,000 acres.


"Slawson has been the only Bakken operator with experience drilling the Upper
Bakken Shale," says John Fair, CEO of PetroShale (US) Inc. "Slawson drilled 22
horizontal wells in the Billings Nose in the late 1980s and early 1990s. Then
they drilled five un-stimulated wells adjacent to Mondak from 1994 to 2007,
which had modest IPs but averaged 730,000 EURs, with at least two of those wells
expected to exceed one million barrels. These new test wells in Mondak prove
that the play is continuous. Now we are experimenting with completion techniques
to increase the early stage deliverability." 


Recently, Fidelity has begun drilling the shale within the Mondak AMI and other
important operators are now aware of the opportunity and assembling land
positions within the Upper Bakken Shale trend.


Fair added: "With these first five wells we have experimented with completion
techniques and micro-seismic data to hone in on the most efficient completion
formula. The history of the Bakken tells us that completion techniques and
economics continue to improve - field by field and year over year." 




Well Name           WI%          IP Rates (24 Hr BOPD)                      
                                                                            
Arrowhead           8.9          316 (on pump)                              
                                                                            
Dart                10.0         312 (on pump)                              
                                                                            
Culverin            10.0         476 (flowing rate)                         
                                                                            
Cleaver             10.0         296 (flowing rate)                         
                                                                            
Lasso               10.0         Flow back test underway                    
                                                                            
Pilum               10.0         Waiting on completion                      



"Recent micro seismic test results were very positive and gave us critical data
to help fine-tune the completions. This data also supports our original estimate
of being able to get three wells per section, and probably more," according to
Fair.


Slawson is still working on reducing costs. "The first well cost $6 million and
now we are under $5 million and still decreasing," says Todd Slawson, President
of Slawson Exploration. "The shale wells in the Mondak area will never have
flashy IPs but they exhibit very shallow decline curves, hence the high expected
EURs and projected recycle ratios of 4.5:1 or greater. As we fine tune the
completions we will continue to improve the IPs and economics," says Slawson.


"As we continue to work our way up the curve on our stimulation techniques we
are also anxious to try an innovative idea for unstimulated wells, which we
believe might offer the greatest ultimate recovery and even higher recycle
ratios."


In the June 17, 2012 Petroleum News Bakken, Dr. Steve Sonnenburg, holder of the
Charles Boettcher Distinguished Chair at the Colorado School of Mines, touted
the Upper Bakken Shale saying, "90 to 95% of the oil has not migrated from the
shale source rock intervals" and "they are world class source rocks. They
currently average about 11% by weight organic carbon content."


Petrochemist and PetroShale board member Daniel Jarvie analyzed a recent core
from the same Upper Bakken Shale trend "which indicated upwards of 30 million
barrels of oil in place per section." 


"In addition to the Upper Bakken Shale, Mondak is prospective in the Mission
Canyon, Tyler, False Bakken, and Red River formations," says Craig Slawson, VP
Slawson Exploration. "The Mondak play has more than 200 well locations." 


About PetroShale:

PetroShale Inc. (TSX VENTURE:PSH) was formed in March 2012 under a plan of
arrangement combining Mondak Petroleum Inc. and Algonquin Oil and Gas Limited.
PetroShale partners with Slawson Exploration in the Williston Bakken. Slawson
Exploration is the 6th largest oil producer in the Williston Bakken and the 7th
largest private oil producer in America. Slawson Exploration has been operating
in the Williston Basin for more than 35 years and it is known for its technical
innovation and efficient operations. PetroShale's non-operating model and low
overhead allows for extremely efficient conversion of Slawson Exploration
operations into both reserve and EBITA growth.
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