Stetson Oil & Gas Ltd.
TSX VENTURE : SSN

Stetson Oil & Gas Ltd.

July 29, 2009 07:30 ET

Stetson Permits First Well in North Dakota and Completes Gas Well in Central Alberta

CALGARY, ALBERTA--(Marketwire - July 29, 2009) -

NOT FOR RELEASE IN THE UNITED STATES OR TO U.S. NEWS WIRE SERVICES

STETSON OIL & GAS LTD. (TSX VENTURE:SSN) ("Stetson" or the "Company") today announced that it has received a state Permit to Drill from the North Dakota Industrial Commission for its first horizontal well on landholdings in North Dakota.

Stetson and its partner expect to commence drilling operations in mid August, subject to receipt of the Federal Permit to Drill, expected to be issued in early August. Stetson plans to drill the well, Stetson Red Willow MHA 1-11H-148-90, to a vertical depth of approximately 9500 feet (2896 meters) and run open hole logs to evaluate the Bakken and Three Forks formations, following which, it is expected that the well will be plugged back and horizontally drilled in the Bakken formation for a length of approximately 4500 feet (1372 meters). The well is expected to take 26 days to drill and completion operations are planned to commence approximately two to three weeks following release of the drilling rig. Production results should be known in early October 2009. Stetson is the operator of the well and has a 48.75% working interest.

Stetson has also recently participated for a 37.5% interest in a gas well drilled in central Alberta. The well was completed in the Glauconite zone and flowed on clean-up at rates of about 1.7 mmcfd with minimal drawdown. The operator of the well expects to commence production operations in late August 2009 at a rate of approximately 1.0 mmcfd (375 mcfd, or 62 boepd, net to Stetson).

Stetson also reports that gas production from a horizontal well drilled into Mannville coals on the same property commenced in July 2009 at initial rates of approximately 75 mcfd of dry gas. This well experienced considerable drilling difficulties and the flow of dry gas is encouraging for establishment of gas reserves from the Mannville coal on the lands.

In addition to the Glauconite and Mannville gas reserves, there is potential to re-enter an abandoned well to produce Belly River gas, and to produce four Horseshoe Canyon formation CBM wells on the property. Horseshoe Canyon formation CBM is well established in the area, and individual wells typically produce at initial rates of 100 to 150 mcfd. Development of these reserves will likely be deferred until gas prices improve.

Stetson is an emerging junior oil and gas company with exploration, development, and production programs in Saskatchewan and Alberta, Canada and North Dakota, USA.

Bill Ward, President & CEO

Disclaimers:

BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Net present value, net present value per share, future projected net revenue and similar measures are estimated values and do not represent fair market value.

Cautionary Note Regarding Forward-Looking Information: This press release contains "forward-looking information", within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the effect of the permit on operation; the receipt of further required permits; the timeline, plan and effectiveness of the proposed drilling program; receipt of regulatory approval; benefits of the programs; reserve estimates; estimates regarding future production; expected management rationalization and benefits therefrom; and the future financial and operating performance of Stetson and its projects. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, political and social risks and uncertainties; risks relating to oil and gas exploration and exploitation activities and oil and gas prices. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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