KEC

Kallisto Energy Corp. (TSX VENTURE:KEC) ("Kallisto" or the "Company") announces
that the first two wells of the planned water-flood scheme at Pembina, Alberta
have been drilled, cased and are awaiting completion. The horizontal wells,
located at 100/12-04-048-03 W5M and 102/13-04-048-03 W5M, are expected to be
completed using multi-stage fracture stimulations within the next two weeks. 


The water-flood scheme is expected to result in the drilling of a total of five
horizontal oil wells in section 4-048-03 W5M, four in 2012 and one in 2013,
bringing the total number of wells in the section to seven. The new wells are
expected to be produced through the 5% royalty period for horizontal oil wells
(the earlier of two years or 60,000 bbls). Three of the seven wells in the
section will be converted to water injection wells; the first well in 2012 and
the next two wells in 2014/2015. Kallisto's share of the project costs is
estimated to be approximately $4.2 million. 


Following a successful evaluation of the results of the water-flood in section
4, the water-flood project is expected to be expanded to include part or all of
the remaining two sections of land in the Pembina project. 


The development of its Pembina lands has added significant reserve value and
cash flow to the Company. Current total gross production from the ten Pembina
wells is approximately 380 BOE per day, comprised of 323 bbls of oil per day and
343 mcf of gas per day. Since the beginning of production operations in November
2009, the ten Pembina wells have produced a total of approximately 413,000 BOE,
including 355,000 bbls of oil. Kallisto has a 30% working interest in the
Pembina project. 


The independent reserve evaluation completed for the Company as of December 31,
2011 placed the Company's 2P working interest reserves at Pembina at 816,200 BOE
with a discounted cash flow (discounted at 10%) of $16 million before tax. This
value does not include any potential value of a water-flood scheme. 


Kallisto is a Calgary-based junior resource company engaged in the exploration,
development and production of oil and natural gas in Alberta.


Forward Looking Information

The reader is advised that some of the information contained herein may
constitute forward looking statements within the meaning assigned by National
Instrument 51-102 and other relevant securities legislation. It includes, but is
not limited to, statements with respect to well production and performance,
timing of well drilling and completion and the conversion to water-flood
operations. Forward-looking information is frequently characterized by words
such as "plan", "expect", "project", "intend", "believe", "anticipate",
"estimate", "scheduled", "potential", or other similar words, or statements that
certain events or conditions "may", "should" or "could" occur. Forward-looking
information is based on the Company's expectations regarding its future growth,
results of operations, production, future capital and other expenditures
(including the amount, nature and sources of funding thereof), competitive
advantages, plans for and results of drilling activity, environmental matters,
business prospects and opportunities. Such forward-looking information reflects
management's current beliefs and assumptions and is based on information
currently available to it. The reader is cautioned that assumptions used in the
preparation of such information, although considered reasonable by the Company
at the time of preparation, may prove to be incorrect and readers are cautioned
not to place undue reliance on forward-looking information, which speaks only as
of the date hereof. The Company does not undertake any obligation to release
publicly any revisions to forward-looking information contained herein to
reflect events or circumstances that occur after the date hereof or to reflect
the occurrence of unanticipated events, except as may be required under
applicable securities laws.


Forward-looking information involves significant known and unknown risks and
uncertainties. A number of factors could cause actual results to differ
materially from the results discussed in the forward-looking information
including risks associated with the impact of general economic conditions,
industry conditions, governmental regulation, volatility of commodity prices,
currency fluctuations, imprecision of reserve and resource estimates,
environmental risks, competition from other industry participants, the lack of
availability of qualified personnel or management, stock market volatility and
the Corporation's ability to access sufficient capital from internal and
external sources. Additional risks and uncertainties are described in the
Company's Annual Information Form dated May 22, 2012 which is filed on SEDAR at
www.sedar.com.


Barrels of oil equivalent (BOE) are 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.

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