SOURCE: Arctic Oil & Gas Corp.

September 17, 2008 03:00 ET

Arctic Oil & Gas Corp.: Government Officials Should Vote for Energy Prosperity, Not Energy Poverty

LAS VEGAS, NV--(Marketwire - September 17, 2008) - Arctic Oil & Gas Corp. (PINKSHEETS: AOAG) (351 million shares issued), a petroleum exploration company, is pleased to announce that the Company and partners have proposed $2.50 gasoline, 30% discounted natural gas and hundreds of millions of dollars in royalties to Santa Barbara County from a proposed, (40% AOAG equity) Santa Barbara OCS-State petroleum lease development project, on known oil accumulations containing between 250-500 million barrels oil.

The Company looks forward to the likelihood of the Congressional offshore oil moratorium expiring at the end of September, which could enable the proposed development and others to move forward.

AOAG's proposed FPSO development would have a daily send-out capacity of 100,000 BBL/day oil-gas, enough to supply the daily needs of the entire Santa Barbara County as well as reduce imported oil needs for Southern California, generating over $4 billion per year in local oil revenues.

The proposed Santa Barbara offshore oil and gas production would be significantly net-positive for the environment.

Santa Barbara oil reservoirs could become the fastest way to generate hundreds of billions of dollars of new more affordable gasoline for Americans.

Santa Barbara and indeed all California Residents could be enjoying $2.50 gas from local oil supplies if the County, State and Federal governments would support new oil leases. There are adjacent larger oil reserve pools in the Santa Barbara Channel and Santa Maria Basin, owned by other companies, frozen by drilling moratorium, which could quickly and safely be bought into production to replace 30-60% of California's foreign oil imports, further reducing gasoline prices. And they would reduce pressure in oil reservoirs, lowering natural oil-gas seeps, which are causing significant air and ocean pollution. Much of this local oil could begin production within months! Thus ending the moratorium could result in an immediate drop in gasoline prices.

AOAG has offered significant energy and financial benefits to Santa Barbara County Residents as well as local, State and national treasuries. The case for drilling is compelling:

1.  $2.50 GASOLINE for Santa Barbara County residents and County vehicles
    from AOAG production.
2.  $2.50 GASOLINE for all hotel guests in Santa Barbara County.
3.  County-wide, Compressed Natural Gas (CNG) car conversions facilities.
4.  $1.50 CNG for Santa Barbara and Coast residents for flexi-fuel
5.  Substantial Annual Grants to environmental study groups and renewable
    energy programs.
6.  Significant decrease in County-wide Air pollution from lower natural
    reservoir seepage.
7.  Lower C02 emissions for the County and State of California.
8.  Significantly reduce greenhouse gas methane emissions from offshore
    gas seeps.
9.  Much cleaner Santa Barbara beaches and oceans by reduction in beach
    tar balls.
10. Large new natural gas supplies from Bering Sea, landing via Santa
    Barbara County, to lower America's C02 emissions from out of State
    coal-fired power plants.
11. Increased local, State and National energy income streams, with
    monies all staying inside America.
12. Provide Complete Santa Barbara energy self reliance and improve
    America's energy security.
13. Significant high-paying local jobs boost.
14. Significant increased cash energy royalties to County of approximately
    $250-500 million p.a. will improve the quality of life for all Santa
    Barbara residents.
15. Special Proposed Community royalty payment from Bering Sea Gas imports
    landings to fund FREE County-Wide clinics and a new FREE County
16. Lower-cost CNG for public transport-busses and vans, will enable
    disadvantaged and senior citizens to travel more freely.
17. Natural Gas for County home heating and cooking at a 30% discount
    to the prevailing rate.
18. Significant Increase in Local Property Values due to many of the
    above benefits.
19. Increased State and Federal royalties will help treasuries balance
    their budgets.

Technology has made drilling nearly risk-free and demand for energy is growing. According to the EIA, the U.S. will still need 47% more oil and 54% more natural gas by 2025.

AOAG President Asserts: "The US oil shortage is political, not geological"

Mr. Sterling, AOAG President, stated that "America could be energy self-sufficient within a decade if County, State and Congress eliminated the American energy blockade. This ongoing failure to develop America's oil and gas resources is costing the county state and federal governments hundreds of billions of dollars in royalties and taxes and consumers are paying double what they should pay for gasoline."

Mr. Sterling also asserted: "The MMS oil lease bonus payments system, by charging billions in up-front lease bids, keeps smaller American companies from getting access to local oil reserves and thus keeps OPEC and the big-oil monopoly in place. Additionally, government leasing is done way too slowly. Such laws were designed to gain maximum upfront money for bloated government bureaucracies, not for speedily fixing the American energy embargo problem. They have to be swept aside. "

Mr. Sterling stated, "The US Congress is considering a proposal this week to open up only the least prospective outer coastline of many states, including California's. Simply allowing the annual offshore drilling moratorium to expire this month would be far more beneficial to American consumers."

Mr. Sterling said he believes that "Opening AOAG's Lease Application areas and America's other domestic oil and gas resources, to responsible oil and gas development would produce more supply, lower gas prices, create greater US energy security, and lower taxes. As well as creating an influx of trillions in new income and excise taxes as well as creating millions of American jobs; prosperity here not there."

Bering Sea Natural Gas: The Company has offered to build a new free hospital and pay hundreds of millions in royalties to land substantial quantities of natural gas into the California gas pipeline grid via Santa Barbara County.

The Bering Sea 200,000 square kilometers natural gas project contains a speculative resource estimate made by USGS geologists, of approximately 900 Trillion cubic feet (Tcf) gas. This is possibly one of the world's largest undeveloped clean energy natural gas fields. When developed it could supply up to 20 million tons per year LNG, providing up to 10% of the US West Coast States, cleaner low C02 energy needs to power a substantial fleet of lower-C02 flexi-fuel vehicles and cleaner electric power stations for 50 years or more.

AOAG: The Company and partners have speculative Claims and lease applications over four large areas with significant proven and potential oil and or gas reserves.

1. Arctic Commons Abyssal Claim                   (AOAG: 30%)
2. Blake Ridge Claim and OCS lease Application    (AOAG: 30%)
3. Bering Sea Abyssal Commons Claim               (AOAG: 30%)
4. Santa Barbara Channel OCS and State Waters
   lease applications                             (AOAG: 40%)

There is significant political "Title Risk" but low geological "Reserve Risk" associated with each of these areas.

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This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's expectations. These forward-looking statements involve risks and uncertainties that include, among others, risks associated with oil & gas exploration risks related to competition, management of growth, new products, services and technologies, potential fluctuations in operating results, international expansion, commercial agreements, acquisitions and strategic transactions, government regulation and taxation. More information about factors that potentially could affect AOAG's financial results is included in its filings with the Securities and Exchange Commission.

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