AVG Avidian Gold Corp

Avatar Energy Ltd. ("Avatar") (TSX VENTURE:AVG) is pleased to announce its 2011
yearend financial results. Copies of the financial statements and management
discussion and analysis (MD&A) for the year ended December 31, 2011, and
Avatar's Statement of Reserves Data and Other Oil and Gas Information (National
Instrument Forms 51-101F1, 51-101F2 and 51-101F3) are available for review at
www.sedar.com and on our website at www.avatarenergy.ca. Selected financial and
operational information is outlined below and should be read in conjunction with
our financial statements and MD&A.


2011 Summary



--  Production averaged 157 barrels of oil equivalent ("BOE") per day, a
    115% increase compared to 2010. Current production, after the March 2012
    disposition of our non-core assets, is approximately 70 BOEPD. 
--  Operating costs decreased approximately 21% to $17 per BOE.



As a result of changes in forecasted commodity prices and certain reserve
additions being lower than anticipated in relation to certain well costs, Avatar
incurred an impairment of approximately $4 million on its property, plant and
equipment in 2011.


Update on Operations and Credit Facilities:

Avatar and its joint venture partner plan to drill a well on our core Pembina
acreage before August 1, 2012. The well will have a 1,200 metre horizontal leg
into the Cardium sand and the completion program contemplates a 15 stage slick
water fracture stimulation. The estimated cost to drill, complete, equip and
tie-in this well is $2.7 million.


Initial three month production from offset wells in the same area average 120 to
245 BOE per day. Upon successful completion of the first well, Avatar's
development program proposes four wells per section for a total of 16 gross
wells.


Subsequent to year end, the Corporation renewed its existing credit facilities.
Its revolving line of credit limit has been reduced to $2.1 million and its
acquisition/development demand loan has been reduced to a maximum of $750,000.
The Corporation has received the lenders permission to draw $660,000 of the
acquisition/development loan to assist with the Corporation's portion of the
drilling costs on its next well. The terms and conditions for the revolving line
of credit and the acquisition/development demand loan remain as they were at
December 31, 2011. In addition, the Corporation has secured a bridge demand loan
for a maximum of $600,000. Interest is payable on the bridge demand loan at a
rate of prime plus 5%. Repayment terms are interest only and the lender's right
of demand. The bridge demand loan is payable in full upon the earlier of a
reduction of the Corporation's existing letters of credit (which the Corporation
is in the process of eliminating) and the next scheduled review which is May 1,
2012. The Corporation is currently in violation of its working capital ratio
covenant under its credit facilities which is required to not be less than 1 to
1. Management feels this is a temporary deficiency caused by its drilling
activities and purchase of additional lands in 2011, and expects to remedy this
deficiency by reducing expenditures and through increased revenue streams
created from the development of its purchased lands. The lenders have not
indicated any course of action in relation to this deficiency.


Avatar is an emerging junior oil and gas company with production in Alberta. The
Corporation's area of focus is on properties in the Pembina Cardium light oil
resource play that exhibit long life high quality reserves with repeatable
drilling upside.


BOEs

Reference to BOE means barrels of oil equivalent and is derived by converting
gas to oil in the ratio of six thousand cubic feet (mcf) of gas to one barrel
(bbl) of oil. BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion
method primarily applicable at the burner top and does not represent a value
equivalency at the wellhead. References to BOEPD means barrel of oil equivalent
per day.


FORWARD LOOKING STATEMENTS

This press release contains forward looking statements. More particularly, this
press release contains statements concerning future drilling plans, proposed
acquisition strategies, use of available funds and the likelihood of successful
future results. Although the Corporation believes that the expectations
reflected in these forward looking statements are reasonable, undue reliance
should not be placed on them because the Corporation can give no assurance that
they will prove to be correct. Since forward looking statements address future
events and conditions, by their very nature they involve inherent risks and
uncertainties. The risks to which the Corporation is subject include, but are
not limited to, operational risks inherent in the exploration, development and
production of oil and gas; availability of debt and equity financing; general
economic conditions and changes in the capital markets; volatility of oil and
gas prices; changes in development plans of Avatar or by third party operators
of Avatar's properties; competition; and changes in legislation and the
regulatory environment. The forward looking statements contained in this press
release are made as of the date hereof and the Corporation undertakes no
obligations to update publicly or revise any forward looking statements or
information, whether as a result of new information, future events or otherwise,
unless required by applicable securities laws.

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