AQX Algonquin Oil & Gas Ltd.

PetroShale Inc. ("PetroShale" or the "Company") (TSX VENTURE:AQX) is pleased to
announce that PetroShale (US), Inc., a wholly owned subsidiary of PetroShale,
has acquired production and proven developed reserves in Montrail County, North
Dakota in the Williston Bakken. The $4.5 million purchase price is for "borehole
only" production of 63 boepd, estimated proven net reserves of 172,526 boe and
an IRR of 14% at $90 WTI and a $7 differential (according to an independent
report by Ryder Scott dated July 11, 2012). Current differentials are running
less than $5. The effective date for the transaction was August 1, 2012 and the
production is 91% oil with approximately 80% of the gas being liquids.


The acquisition was funded with current cash and debt. PetroShale (US), Inc.
borrowed an aggregate US$2.1 million from an individual that is both: (i) a
principal with Slawson Exploration Company, Inc. ("Slawson Exploration"),
PetroShale's strategic partner in the Williston Bakken; and (ii) a principal
with Alameda Energy, Inc., a shareholder of the Company which owns 6.7 million
non-voting shares of PetroShale. The loan will bear interest at a rate of 12%
per annum, with a term ending October 12, 2013. As security for the payment of
the indebtedness, PetroShale (US), Inc. has executed a mortgage, assignment of
production, security agreement and financing statement covering these acquired
oil and gas interests. 


The majority of the production in this area is operated by Slawson Exploration.
The balance of production not operated by Slawson Exploration is predominately
operated by EOG and Whiting.


Reader Advisory

This release includes certain statements that may be deemed "forward-looking
statements". All statements in this release, other than statements of historical
facts, that address future production, reserve potential, exploration drilling,
exploitation activities and events or developments that the Company expects are
forward-looking statements. Although the Company believes the expectations
expressed in such forward looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and actual
results or developments may differ materially from those in the forward-looking
statements. Factors that could cause actual results to differ materially from
those in forward looking statements include market prices, exploitation and
exploration successes, continued availability of capital and financing, and
general economic, market or business conditions. Investors are cautioned that
any such statements are not guarantees of future performance and those actual
results or developments may differ materially from those projected in the
forward-looking statements. For more information on the Company, Investors
should review the Company's registered filings which are available at
www.sedar.com. 


The forward-looking information contained in this news release is expressly
qualified by this cautionary statement. PetroShale does not undertake any
obligation to update or revise any forward-looking statements to conform such
information to actual results or to changes in our expectations except as
otherwise required by applicable securities legislation. Readers are cautioned
not to place undue reliance on forward-looking information.


This press release does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities described herein. The securities have not
been and will not be registered under the United States Securities Act of 1933,
as amended (the "U.S. Securities Act"), or any state securities laws and may not
be offered or sold within the United States or to United States Persons unless
registered under the U.S. Securities Act and applicable state securities laws or
an exemption from such registration is available.


BOE presentation: 

Barrel ("bbl") of oil equivalent ("boe") amounts may be misleading particularly
if used in isolation. All boe conversions in this report are calculated using a
conversion of six thousand cubic feet of natural gas to one equivalent barrel of
oil (6 mcf=1 bbl) and is based on an energy conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
well head. Given that the value ratio based on the current price of crude oil as
compared to natural gas is significantly different from the energy equivalency
of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication
of value.


Trading in the securities of PetroShale Inc. should be considered highly
speculative.

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