Stetson Oil & Gas Ltd.

Stetson Oil & Gas Ltd.

July 11, 2008 15:47 ET

Stetson Acquires Leases Covering 8,570 Acres of Bakken Prospective Lands in North Dakota

CALGARY, ALBERTA--(Marketwire - July 11, 2008) - STETSON OIL & GAS LTD. (TSX VENTURE:SSN) ("Stetson" or the "Company") is pleased to announce that it has received a signed resolution from the Tribal Council of the Three Affiliated Tribes of the Fort Berthold Reservation in North Dakota to lease oil and gas mineral rights to approximately 8,570 acres of land (the "Tribal Lands"). Stetson has secured the rights to this land through the unique working relationships that it has established with First Nations bands over the past year. The Tribal Lands are proximal to approximately 4,500 additional acres of Freehold lands that Stetson has leased, subject to approval of the Bureau of Indian Affairs (U.S.A.).

Stetson considers the Tribal Lands and the leased Freehold lands to be prospective for development of light oil (43 degrees API) and solution gas from the Bakken formation.

These lands are located approximately 25 miles south of the Parshall Bakken field, which has the highest reported initial production rates from horizontal wells drilled into the Bakken formation within the Williston Basin. In their public disclosure, several operators in Parshall are reporting initial well production rates over 2,000 barrels of oil per day ("bopd"), with some wells eclipsing 3,000 bopd. The Bakken formation has recently been developed utilizing horizontal drilling and new "multi-stage" fracturing techniques that have resulted in significant production rates. Many Bakken horizontal wells drilled in North Dakota have reported initial production rates in excess of 500 bopd.

Several older vertical wells drilled on, or in close proximity to, Stetson's leased land have provided key information regarding the Bakken formation. Based on interpretation of well logs from these wells, Stetson expects to encounter a minimum thickness of 25 feet in the middle Bakken formation. Oil and gas shows from two of these vertical wells suggest to Stetson that the zone contains hydrocarbons. Information regarding these older vertical wells, drilled between 1954 and 1993, has been disclosed publicly, and was prepared by persons independent of Stetson. Stetson has not confirmed that this information was prepared by a qualified reserve valuator or auditor or in accordance with the COGE Handbook.

Stetson will be the operator on its North Dakota lands and will have a minimum 70% working interest up to a maximum 90% working interest, depending on the level of participation from a partner in this prospect. The leases on the Tribal Lands are subject to final approval of the Bureau of Indian Affairs (U.S.A.). The Lease terms on the Tribal Lands provide for a cash bonus in the aggregate amount of approximately US$8.6 million, payable by Stetson and its partners and require a Lessor Royalty payable of 22.5%. The leases will have a four year initial term. In addition, Stetson has committed to drill three wells and shoot a 3D seismic survey over a portion of the Tribal Lands to be determined. Stetson is also pleased to announce that a portion of the bonus will be applied directly towards Three Affiliated Tribes community development programs, as determined by the Tribal Council.

The North Dakota Bakken property, together with other exploration initiatives in Southeast Saskatchewan, will be a core focus for the Company. Stetson is now pursuing contract services for drilling and hopes to commence exploratory drilling operations on its lands late in the fourth quarter of 2008.

Stetson is an emerging junior oil and gas company with exploration, development, and production programs in the Provinces of Saskatchewan and Alberta, Canada and North Dakota, U.S.A.

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 potential for oil and gas on the leases; terms of the acquisitions; potential for additional acquisitions; timing and cost of development plans and actual development; production forecasts; similarity between purchased leases and other leases in proximal geographic area; receipt of regulatory approval; benefits of the acquisitions; impact of technology; and future financial or operating performance of the Company 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; reliance on technology; and delays in obtaining regulatory approvals. 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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