Stetson Oil & Gas Ltd.

Stetson Oil & Gas Ltd.

May 08, 2009 14:32 ET

Stetson Oil & Gas Completes Acquisition of Rhea Resources Inc. and Provides Update on Thomas Weisel Litigation

CALGARY, ALBERTA--(Marketwire - May 8, 2009) -


STETSON OIL & GAS LTD. (TSX VENTURE:SSN) ("Stetson" or the "Company") is pleased to announce that it has completed its previously announced acquisition of 100% of the issued and outstanding common shares of Rhea Resources Inc. (the "Acquisition").

Pursuant to the Acquisition, shareholders of Rhea Resources Inc. ("Rhea") received 0.7 common shares of Stetson (the "Stetson Shares") in exchange for each common share held of Rhea. Accordingly, Stetson issued an aggregate of 21,766,497 Stetson Shares valued at $0.10 per share to the Rhea Shareholders, pursuant to which, Rhea Shareholders hold approximately 20.25% of the combined company.

Rhea's assets consist of producing oil and gas properties located in the Lashburn and Buzzard areas of west central Saskatchewan. The main productive zone is the Sparky formation, which produces 12 degree API oil from a depth of 575 meters. Rhea has working interests ranging from 5.0% to 83.33% (with an average of 28.5%) in 18 producing oil wells. Rhea is the operator of four producing oil wells. Stetson has identified one workover candidate and one development drilling opportunity on Rhea owned lands.

The Acquisition will increase production, reserves and cash flow to augment Stetson's growth plan, adding critical mass and increasing momentum going forward as Stetson moves toward the drilling phase of its operations in North Dakota. Through the Acquisition, Stetson will add daily production of approximately 100 bopd, bringing total Company production to approximately 135 boepd.


In addition, Stetson announces that it has received a copy of the Statement of Defence and Counterclaim filed by Thomas Weisel Partners Canada Inc. ("Weisel") in respect of Stetson's claim for damages against Weisel in connection with the incomplete bought deal financing of July 2008. Stetson considers Weisel's Statement of Defence unconvincing and not persuasive.

Stetson has filed a copy of the Statement of Defence and Counterclaim under its profile on SEDAR. Stetson intends to file a Reply and Defence to Counterclaim and advance its claim as aggressively as possible.

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


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 completion of the Acquisition; reserve estimates; estimates regarding future production; expected management rationalization and benefits therefrom; the future financial and operating performance of Stetson and Rhea and their projects, statements with respect to the conduct and the strategy of our claim; the merits of our claim; and the anticipated timetable of the claim. 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 the integration of the two companies and that 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.

This communication does not constitute an offer to purchase or exchange or the solicitation of an offer to sell or exchange any securities of Rhea or an offer to sell or exchange or the solicitation of an offer to buy or exchange any securities of Stetson, nor shall there be any sale or exchange of securities in any jurisdiction (including the United States) in which such offer, solicitation or sale or exchange would be unlawful prior to the registration or qualification under the laws of such jurisdiction. The distribution of this communication may, in some countries, be restricted by law or regulation. Accordingly, persons who come into possession of this document should inform themselves of and observe these restrictions. The solicitation of offers to buy Stetson shares in the United States will only be made pursuant to a prospectus and related offer materials that Stetson expects to send to holders of Rhea securities, subject to the requirements of applicable law. The Stetson shares may not be sold, nor may offers to buy be accepted, in the United States prior to the time the registration statement (if any is filed) becomes effective or an exemption from such requirements is available. No offering of securities shall be made in the United States except (i) by means of a prospectus meeting the requirements of Section 10 of the United States Securities Act of 1933, as amended, which would contain detailed information regarding Stetson and its management, as well as its financial statements, or (ii) pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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