CALGARY, ALBERTA -- (Marketwire) -- 05/29/12 -- On May 19th, an oil and water leak occurred in a remote area of N.W. Alberta approximately 20 km S.E. of Rainbow Lake, Alberta. The site well is used for water injection from the Bluesky Banff Gas Pool.

Upon leak identification, the well was immediately shut-in and clean-up efforts implemented.

The spill covers an approximate surface area of 4.3 hectares (10.6 acres) and an estimated volume of 3,500 m3. The fluid spill composition is an emulsion of oil and water.

The spill perimeter has been trenched and booms have been put in place to contain the spill. Site cleanup and remediation has commenced.

In addition to Pace staff and on-site reclamation expertise, the industry's oil spill cooperative has mobilized additional resources and one of North America's leading emergency spill response specialists, SWAT Consulting Inc., has been engaged and is on the incident site.

A cell tower booster has been installed to increase connectivity to the area.

Update:

--  As of May 28th, approximately 588 m3 of oil and water emulsion has been
    recovered. 
--  The recovered emulsion is 30 per cent oil and 70 per cent water. 
--  Additional booms have been put in place. 
--  A 50 person camp is being set up and located near the site. 
--  Additional towers have been set up to improve lighting for night
    operations. 
--  A local wildlife management firm, based in Rainbow Lake is on location. 
--  Snow fences and silt fences have been installed on the outside of the
    booms to prevent wildlife from entering the area. The bear response plan
    is being finalized and a wildlife seclusion area has been flagged off to
    protect potentially trapped animals. 
--  Pace's environmental consultants are doing continuous sampling with sand
    points placed around the site. 
--  Pace continues to work with environment consultants to install ground
    water monitors. Chlorides in water are being checked and sent to an
    outside agency for chemistry breakdown and ongoing sampling and
    monitoring of fluid in boom trench continues as does additional surface
    water sampling. 
--  On-site air monitoring is continuing using WASP units (Rig Rats). There
    are no detectable levels.  
--  HSE sentries are in place at all entry points and a site map is being
    constructed of all HSE emergency equipment placement. 
--  Additional emergency, ambulatory vehicles, fire and water trucks are on
    site on standby. 
--  The following operational activities will commence in the next 24 hours:
    --  Excavation and sampling of area bell holes. 
    --  Completion of additional socking. 
    --  Complete installation of additional matting around perimeter of
        incident site. 
    --  Initiate pumping back into tanks. 
    --  Establish and set up next skim points. 
    --  Complete containment around the laydown area. 

The Facts:

--  The source of the leak was completely shut-off May 19th. 
--  A containment trench 4 feet wide and 2-3 feet deep around the perimeter
    of the area has been completed. 
--  All government regulatory agencies have been notified of the line leak
    with representation of the ERCB and Alberta Environment and Sustainable
    Resource Development having assessed the area with Pace local field
    operations staff.  
--  Pace is engaged in daily and on-going dialogue with all impacted
    stakeholders. 
--  A remediation plan is being executed by Pace Oil and Gas Ltd. and an
    environmental engineering firm. The Pace Operations team is working in
    collaboration with and under the approval of ERCB and Alberta
    Environment and Sustainable Resource Development. 
--  The ERCB states there were no injuries and no direct public impact as a
    result of the leak. 

Pace Oil & Gas Ltd. (TSX:PCE) is a Calgary, Alberta based intermediate sized oil-weighted company with a large portfolio of near term oil resource opportunities in the Western Canadian Sedimentary Basin. TSX SYMBOL: PCE