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CORRECTED NEWS RELEASE: Chinook Energy Provides Operational Update

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CALGARY, ALBERTA--(Marketwire - Nov. 1, 2012) - Chinook Energy Inc. (TSX:CKE) ("Chinook" or the "Company") is pleased to provide the following operational update.

Bir Ben Tartar Concession, Tunisia

TT-11 Horizontal Well Initial Flow Rates

The TT-11 well is Chinook's third horizontal well test of the Ordovician Quartzite Reservoir on the Bir Ben Tartar Concession (the "BBT Concession"). Partners in the concession are block holder, Enterprise Tunisienne D'Activites de Petrolieres ("ETAP"), and contractors, Chinook (86% interest) and Cygam Energy Inc. (14% interest).

Completion operations on TT-11 commenced on October 22, 2012 and, following a 12-stage fracture stimulation placing a total of 447,810 pounds of proppant, production testing began on October 24, 2012. Over the initial 144 hour flow period, the TT-11 well flowed at an average oil rate of 1,744 barrels of oil per day ("bopd"), an average water rate of 1,363 barrels of water per day (44% water cut) and average gas-to-oil ratio of 1,311 standard cubic feet of gas per barrel of oil. Cumulative water recovered to date represents approximately 72% of the load fluid used during completion and water cuts have decreased from 73% to 43% over the flow period to date. Early trend data in these initial applications of a multi-staged completion of the tight Ordovician sand reservoir should be assessed on more mature initial production data of 30 and 90 days, which will be released as that data becomes available.

BBT Concession Production Update

Production from the BBT Concession continues to increase in 2012 and has averaged 4,183 bopd gross (2,253 bopd net) over the last 30 days compared to 2,236 bopd gross at the beginning of 2012. Production from the previously announced TT-13 well averaged 3,251 bopd gross over the first 10 days of production and was subsequently restricted to 1,500 bopd gross due to capacity constraints and limitations on crude oil trucking and surface water handling.

Gross production from the first horizontal well at TT-16 averaged 897 bopd over the first 10 days of production, 825 bopd over the first 30 days of production and 715 bopd over the first 60 days of production and is currently producing 515 bopd with 6% water cut after 101 days of production. Chinook estimates fourth quarter gross production from the BBT Concession to average between 4,500 bopd and 4,750 bopd with an estimated gross productive capacity 2012 exit rate of 5,000 bopd to 5,250 bopd.

TT-10 Well Drilling Update

Drilling operations on the fourth horizontal well at TT-10 commenced on October 19, 2012. As current production from the BBT Concession exceeds Chinook's current crude handling capacity, the TT-10 well will be the last well in the 2012 drilling program on the concession. Chinook is reviewing plans with the project participants to implement strategies to increase its crude oil trucking and surface water handling capacity by year end 2012 to support higher volumes in 2013.

Canadian Non-Core Asset Sale Process

Chinook has engaged FirstEnergy Capital Corp. and Macquarie Capital Markets Canada Ltd. to market certain of the Company's non-core Canadian assets. The assets represent approximately 5,500 boe/d, or 58% of Chinook's current Canadian production of 9,500 boe/d. Information memorandums are expected to be sent to prospective parties by mid-November 2012 with bids on properties anticipated to be received in January 2013. The asset sale process is anticipated to accelerate and complete the disposition of non-core Canadian assets which to date has generated proceeds of approximately $161 million, before closing adjustments, through 30 transactions over the last seven quarters. Based on Chinook's relatively low existing debt to cash flow, the Company is well positioned to consider a broad range of forms of consideration for the assets. Dispositions of Chinook's non-core assets will enable the Company to focus its efforts on its Grande Prairie and Peace River Arch prospect inventory where it holds approximately 200,000 acres of undeveloped land.

Cosmos Concession Reserves Update

Effective July 1, 2012, InSite Petroleum Consultants Ltd. ("InSite") provided an update to the evaluation of the reserves for the offshore Cosmos South field located in the Cosmos Concession. The update includes the assignment of 8.8 million barrels ("MMbbl") of proved plus probable reserves and 6.5 MMbbl of total proved reserves to the Cosmos South field. This represents a 39% increase in proved plus probable reserves at the Cosmos South field since December 31, 2011.

The following table summarizes the December 31, 2011 and updated July 1, 2012 InSite reserve estimate for 100% of the Cosmos South field.



December July 1, %
31, 2011 2012 Change Increase
------------------------------------
Gross Reserves
Proved (MMbbl) 3.9 6.5 2.6 65
Proved Plus Probable (MMbbl) 6.3 8.8 2.5 39



Chinook currently holds an 80% interest in the Cosmos Concession and associated reserves, however, its previously announced farmout agreement with a wholly-owned subsidiary of New Zealand Oil and Gas Ltd ("NZOG") enables NZOG to take ownership of one-half of Chinook's interest upon making a positive final investment decision ("FID") and delivering US$19 million by way of a financial carry of Chinook's preliminary costs of field development. Chinook anticipates the FID being made in the first quarter of 2013 upon completion and delivery of the front end engineering and design ("FEED") work and confirmed availability of critical equipment in line with FEED estimates of costs.

Contingent and Prospective Resource Assessment of Previously Unevaluated Prospects in Tunisia

To better represent the potential future value of Chinook's 1.5 million net acre position and the scale of growth that it can support, Chinook commissioned InSite to conduct an audit effective June 1, 2012 of the Company's estimates of contingent and prospective resources associated with 65 prospects identified on its eight blocks in Tunisia (three offshore in the Gulf of Hammamet and five onshore in the Ghadames Basin). The InSite audit report does not include the Contingent Resource booked on the BBT Concession as of December 31, 2011. Chinook's share of P50 risked Best Estimate Contingent Resource associated with the Tunisian prospects audited is 3.6 MMbbl of oil. Prospective Resource, on the same basis, is 34.1 MMbbl of oil. Potential volumes representing over 200% of Chinook's currently booked proved plus probable reserves confirms the prospectivity of Chinook's undeveloped lands and Chinook's expectations of continued growth in its Tunisian business.

The table below provides an estimate of Chinook's risked company interest Contingent and Prospective Resources on its eight blocks in Tunisia excluding the previously booked BBT Concession Contingent Resource of 6.8 MMbbl as at December 31, 2011 evaluated by InSite and as disclosed in Chinook's Annual Information Form dated March 23, 2012.



Company Interest Risked
------------------------------------
Low Best High
Estimate(3) Estimate(4) Estimate(5)
------------------------------------
P90 P50 P10
(MMbbl) (MMbbl) (MMbbl)
------------------------------------
Contingent Resource (1)(6)(8) 2.2 3.6 4.9
Prospective Resource (2)(7) 9.5 34.1 101.5



The estimate of the resources in Tunisia was prepared internally by Chinook by a qualified reserves evaluator (as defined in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101")) and audited by InSite. InSite carried out its independent audit in accordance with the current guidelines outlined in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and in accordance with NI 51-101. Pursuant to the COGE Handbook, an audit is the process whereby an independent qualified reserves auditor carries out procedures designed to allow the auditor to provide reasonable assurance that a reporting issuer's reserves data (or specific parts thereof) have, in all material respects, been determined and presented in accordance with the COGE Handbook and are, therefore, free of material misstatement.

Pursuant to the audit, InSite met with Chinook's technical team who provided a review of Chinook's methods and procedures for estimating recovery factors and risks associated with quantifying assigned resources. Chinook's seismic interpretation was reviewed including key seismic lines depicting Chinook's horizon picks and resulting seismic mapping. In addition, geological and reservoir engineering data including well logs, petrophysical reports, interpreted contacts, test data, and pressure data was presented for wells penetrating the evaluated structures, as well as analog wells. A field inspection of the properties was not made by InSite as it was not considered necessary in view of the information available to InSite.

InSite opined in its audit report that Chinook's estimates of the Contingent and Prospective Resources located in Tunisia are reasonable within the established audit tolerance guidelines of (+ or -) 20% and have been prepared in accordance with generally accepted petroleum engineering and evaluation principles as set forth in the standards pertaining to the estimating and auditing of oil and gas resources outlined in the COGE Handbook and are, therefore, considered to be compliant with NI 51-101 standards.

Notes:

(1) Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. It is also appropriate to classify as Contingent Resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. Contingent Resources are further classified in accordance with the level of certainty associated with the estimates and may be further sub-classified based on project maturity and/or economic status. For Chinook, the contingencies which must be overcome to enable the classification of the above noted Contingent Resources as Reserves are set forth below in note 8 below. The estimate of Contingent Resources has been adjusted for risk based on the chance of development.

(2) Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity.

(3) Low Estimate is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.

(4) Best Estimate is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.

(5) High Estimate is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

(6) Estimates of Contingent Resources described herein are estimates only; the actual resources may be higher or lower than those calculated in the estimate summarized herein. There is no certainty that it will be commercially viable to produce any portion of the Contingent Resources described in the estimate.

(7) There is no certainty that any portion of the Prospective Resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the Prospective Resources.

(8) Contingencies which must be overcome to enable the reclassification of Contingent Resources as reserves can be categorized as economic, non-technical and technical. The COGE Handbook identifies non-technical contingencies as legal, environmental, political and regulatory matters or a lack of markets. There are several non-technical contingencies that prevent the classification of the Contingent Resources estimated above as being classified as reserves. Although certain areas of the blocks subject to the estimates are currently undergoing development under approved plans, these plans do not include the areas of the reservoirs with which all of the Contingent Resources summarized in the table above are associated. As of the effective date of the evaluation, information was not available concerning the regulatory status or, in certain instances, conceptual development plans under which such Contingent Resources could be brought on production, nor was information available regarding the likelihood of any such development plans being approved by Chinook, by its partners in these fields, nor by ETAP. Other non-technical contingencies may include regulatory application submission with no major issues raised, access to markets and intent to proceed by the operator and other partners as evidenced by major capital expenditures planned. There are no applicable technical contingencies that prevent the classification of the Contingent Resources as reserves. While it is premature at this time to identify the economic viability of any of the Contingent Resources since evaluations are currently incomplete and as such, the economic status of the Contingent Resources is currently undetermined, Chinook is actively carrying out activities on certain of its blocks in order to enable it to complete the necessary economic assessment(s). Furthermore, certain of the reservoir areas evaluated in the Contingent Resources estimate cover extensive areas that will require considerable development activity and investment to fully exploit. As at the date of the audit, the eventual development of these areas is still in the preliminary stages and assessment of the economic viability is not possible due to the lack of even conceptual development plans and budgets. Accordingly, the Contingent Resources presented above have an economic status of "Undetermined." The most significant positive and negative factors with respect to the Contingent Resource estimates relates to the fact that the blocks are each at an evaluation/delineation stage.

About Chinook Energy Inc.

Chinook is a Calgary-based public oil and gas exploration and development company that combines multi-zone conventional production with resource plays in Western Canada with an exciting high growth oil business onshore and offshore Tunisia in North Africa.

Forward-Looking Statement Advisory

In the interest of providing shareholders and potential investors with information regarding Chinook, including management's assessment of the future plans and operations of Chinook, certain statements contained in this news release constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In particular, this news release contains, without limitation, forward-looking statements pertaining to future Tunisian operations to be completed and the timing thereof, TT-11 well expectations, estimates of fourth quarter production and the 2012 productive capacity exit rate for the BBT Concession, expectations regarding the drilling of the TT-10 well, expectations regarding the Company's ability to increase its crude oil trucking and surface water handling capacity and the timing thereof, expectations regarding a positive FID being made by NZOG and the timing thereof, that NZOG will earn a 40% interest in the Cosmos Concession in accordance with the terms of the farmout agreement and expectations of future plans regarding the Canadian non-core asset sales process. In addition, statements relating to "contingent resources", "prospective resources" and "reserves" contained herein are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves described can be economically produced in the future.

With respect to the forward-looking statements contained in this news release, Chinook has made assumptions regarding, among other things: the ability of Chinook to continue to operate in Tunisia with limited logistical security and operational issues, future capital expenditure levels, future oil and natural gas prices, future oil and natural gas production levels, Chinook's ability to obtain equipment in a timely manner to carry out exploration and development activities, that NZOG will make a positive FID and earn a 40% interest in the Cosmos Concession in accordance with the farmout agreement, the impact of increasing competition, the ability of Chinook to add production and reserves through development and exploitation activities, certain commodity price and other cost assumptions, the continued availability of adequate debt and equity financing and cash flow to fund its planned expenditures. Although Chinook believes that the expectations reflected in the forward-looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that predictions, forecasts, projections and other forward-looking statements will not occur, which may cause Chinook's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements.

These risks and uncertainties include, without limitation, political and security risks associated with Chinook's Tunisian operations, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve and resource estimates, the continued impact of shut-in production, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, delays in projects and/or operations resulting from surface conditions, wells not performing as expected, delays resulting from or inability to obtain the required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the forgoing list of factors is not exhaustive. Additional information on these and other factors that could affect Chinook's operations and financial results are included in Chinook's Annual Information Form dated March 23, 2012 and other reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at Chinook's website (www.chinookenergyinc.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Chinook does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Barrels of Oil Equivalent

Barrels of oil equivalent (boe) is calculated using the conversion factor of 6 mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl (barrel) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. 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.

FOR FURTHER INFORMATION PLEASE CONTACT:
Chinook Energy Inc.
Walter Vrataric
President
(403) 261-6883


Chinook Energy Inc.
L. Geoff Barlow
Vice-President, Finance and Chief Financial Officer
(403) 261-6883
www.chinookenergyinc.com

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