Fairborne Energy Ltd. is pleased to provide the following update.

Highlights

■ Successful Cardium horizontal exploration well at the south end of the Greater Harlech area flowed at 2.3 mmcf/d and 126 bbls/d of total liquids setting up potential for 200 follow up locations on Company lands

■ Estimated simple payout of a Cardium horizontal well is approximately one year •Successful, multi-zone vertical exploration well at the north end of the Greater Harlech area proving up the Cardium fairway that is 25 miles long and 12 miles wide

■ Strategic joint venture land and drilling agreement in the Greater Harlech area executed with an industry leading, intermediate sized deep basin focused producer

■ Land position increased in the Greater Harlech area through recent crown purchases and pooling with the Company's new joint venture partne

■ Record current production levels of 16,000 boe/d achieved; and on track to meet 2011 exit rate production guidance of 16,500 boe/d

■ Marlboro production reaches record levels of 7,100 boe/d

■ The Company's first Bluesky horizontal well at Marlboro has been drilled, with completion operations currently underway

■ Confirmation of repayment, in cash, of the principal amount of Fairborne's outstanding convertible debentures and accrued interest, which mature on December 31, 2011, using Fairborne's existing bank credit facilities

Recent Exploration Activity

Fairborne has successfully drilled and completed wells on two new exploration plays in its greater Harlech area; a Cardium horizontal discovery in the southern end and a multi-zone vertical discovery on the northern lands.

The Company's strategy, successfully executed in the Marlboro area for the Wilrich and repeated again in the Greater Harlech area for the Cardium, is to use vertical wells to test multiple horizons and identify candidates for horizontal drilling and multistage fracture stimulations.

Fairborne began work on these two new exploration plays in 2009, acquiring land positions in the Voyager area and adding to its already substantial land base in the Greater Harlech area in the deep basin of west central Alberta. Since 2009, oil and gas activity had slowed materially due to global economic concerns allowing Fairborne to accumulate significant lands at prices that were substantially less than current area prices. Fairborne's current land base in the Greater Harlech area now totals 124,800 net acres.

Greater Harlech Area - Cardium

During the first quarter of 2011, Fairborne recompleted a number of vertical wells on the southern portion of the Greater Harlech area in the Cardium Formation to test for flow capability as well as liquids yield.

Based on the encouraging vertical well results, the Company commenced drilling a horizontal Cardium well at Harlech located at 2-15-44-15W5 in October 2011. The well reached a measured depth of 3,955 metres and was completed with a 10 stage, 30 tonne per stage fracture treatment. This well is currently being tied in and is expected to commence production in early December at an initial rate of 400 boe/d. With anticipated netbacks in excess of $34 per boe, on-stream costs of less than $15,000 per flowing boe, simple payout is expected in approximately one year.

The Company anticipates that, like the Wilrich at Marlboro, continued refinement of fracture stimulation treatments and completion fluids will result in enhanced flow results. Drilling and completion costs are also expected to decline as more Cardium wells are drilled. Plans for the first quarter of 2012 include the drilling of another Cardium horizontal well to continue to de-risk this condensate rich resource play.

Greater Harlech Area - Multizone Vertical

Fairborne has also drilled a vertical well on the north end of the property located at 16-36-45-18W5 with a total depth of 3,900 metres. The 16-36 vertical well is located approximately 20 miles north west of the 2-15 horizontal Cardium well.

The Company is pleased to report flow rates from the 16-36 vertical well of 1.1 mmcf/d, which is similar to average rates in over 40 vertical multizone wells along trend.

Positive flow results were achieved from the Cardium, Falher and Wilrich. Of particular significance is the flow rate achieved in the Cardium, confirming significant potential for this condensate rich gas reservoir over a trend that extends for 25 miles.

Strategic Land Deal

In order to increase exposure to the three prolific reservoirs encountered and tested in the 16-36 vertical well, Fairborne has entered into a strategic joint venture land and drilling agreement with an industry leading, intermediate sized, deep basin focused producer. This strategic arrangement increases Fairborne's land exposure from 31 sections to 59 sections in the area around the 16-36 vertical well and extending to the northwest. The strategic joint venture also secures Fairborne's participation at 33.3% working interest in an Area of Mutual Interest covering approximately six townships of highly prospective land in the core liquids rich deep basin fairway.

Fairborne and its joint venture partner participated jointly in the November 16th landsale and successfully purchased 22 gross sections of land highly prospective for the Wilrich, Falher and Cardium bringing Fairborne's land position in the joint venture area to 81 gross sections.

This successful purchase brings Fairborne's total exposure to the Cardium play to 170 gross sections and in the Wilrich play to 99 gross sections and gives Fairborne an inventory of in excess of 200 net Cardium and 86 net Wilrich and Falher locations to pursue.

Marlboro Area - Wilrich Development and Bluesky Success

Fairborne drilled the first horizontal Wilrich well in western Canada in March of 2009 and, since then has successfully drilled and completed a total of 18 wells in the Marlboro/Pine Creek area of the deep basin.

The owned and operated Marlboro gas plant, built to handle Fairborne's growing Wilrich volumes, commenced operations in May 2011 and is currently processing gross volumes of 51 mmcf/d. The expansion of this facility to 60 million cubic feet per day is currently underway and is expected to be operational in late January 2012.

Fairborne's net production in the Company operated Marlboro area has grown from 1,700 boe/d in January, 2010 to current production in excess of 7,100 boe per day, made up of 41 million cubic feet per day plus liquids, an increase of 320 percent net of declines. Marlboro makes up approximately 44% of Fairborne's total corporate production and at current strip pricing, generates an operating netback of approximately $19 per boe.

Of note, Fairborne's horizontal Wilrich well with the longest production history has been producing for 2.5 years and is still producing at a rate of 1.5 million cubic feet per day having produced a cumulative 1.7 Bcf of gas and 17,000 bbls of liquids to date.

The Marlboro/Pine Creek area has also seen significant industry activity targeting the Notikewin and Bluesky formations with horizontal wells. Fairborne has mapped both these plays on its existing land base and has an inventory of 19 Notikewin and 20 Bluesky locations. Fairborne's first Bluesky well has been successfully drilled with a horizontal length of 1,210 metres and is currently awaiting completion operations.

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