Stetson Oil & Gas Ltd.
TSX VENTURE : SSN

Stetson Oil & Gas Ltd.

September 21, 2009 07:30 ET

Stetson Provides Operational Update on North Dakota Drilling and Acquires Producing Oil and Gas Properties

CALGARY, ALBERTA--(Marketwire - Sept. 21, 2009) - Stetson Oil & Gas Ltd. (TSX VENTURE:SSN) ("Stetson") is pleased to announce that it has now completed the drilling of its first Bakken horizontal well in North Dakota. The well was drilled to a total measured depth of 13,837 feet, with a 3932 ft. horizontal leg. Stetson is currently running a production liner and packer assembly that will allow for an 11 stage fracture stimulation. Stetson expects to commence the completion of the well in early October 2009 and production results should be known shortly thereafter.

Stetson and Longford Energy Inc. ("Longford") also announced that they have signed a letter of intent whereby Stetson will acquire Canadian oil and gas properties from Longford for a purchase price of $425,000 (the "Transaction") effective September 1, 2009. Closing of the Transaction is expected to occur on or before September 30, 2009, subject to TSX Venture Exchange approval.

Longford's Canadian oil and gas assets are situated in the Lashburn area of Saskatchewan, and the Brazeau and Alder Flats areas of Alberta. Total net production is approximately 45 boepd and net operating income is approximately $25,000 per month. Following completion of the Transaction, Stetson expects to have daily production of approximately 175 boepd which is expected to increase in September as additional gas volumes from central Alberta are brought on-stream.

At Lashburn, Saskatchewan Longford has working interests ranging from 16.67% to 85% in four producing oil wells that produce approximately 30 bopd net to Longford. Stetson is currently a partner with Longford in Lashburn and the Operator of these wells. At Brazeau and Alder Flats, Longford owns interests of 49% and 100% respectively in two wells that have net production of approximately 15 boepd.

Longford's oil and gas reserves were evaluated by GLJ Petroleum Consultants Ltd. ("GLJ") effective July 31, 2009. The GLJ evaluation estimated total proven and probable reserves of 96,000 barrels of oil equivalent ("boe"), with a net present value, before tax and discounted at 10%, of $1,281,000. Stetson will acquire proven and probable reserves at a cost of $4.43 per barrel of oil equivalent ("boe"). As part of the Transaction, Stetson will also assume abandonment liabilities on two wells and an oil battery located at Alder Flats.

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

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.

The Transaction will be considered to be a non-arm's length transaction for the purposes of the TSX Venture Exchange because Stetson and Longford have two common directors, being Stan Bharti and Ahmed Said, and two common officers, being Gary Lobb and Patrick Gleeson.

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 completion of the Transaction; reserve estimates; estimates regarding future production; the receipt of regulatory approvals; 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; oil and gas prices; acquisition risks; risks relating to greater resources, time and attention will be spent on the Acquisition than anticipated; and delays in obtaining regulatory approvals. Although Stetson 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. Stetson does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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