Stetson Oil & Gas Ltd.
TSX VENTURE : SSN

Stetson Oil & Gas Ltd.

July 14, 2008 07:31 ET

Stetson Oil & Gas Ltd. Announces C$25,000,030 "Bought Deal" Financing

CALGARY, ALBERTA--(Marketwire - July 14, 2008) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

STETSON OIL & GAS LTD. (TSX VENTURE:SSN) ("Stetson" or the "Company") is pleased to announce that it has entered into an agreement with Thomas Weisel Partners Canada Inc. as lead underwriter on behalf of a syndicate of underwriters (collectively, the "Underwriters") to purchase, on a bought deal private placement basis, 45,454,600 Subscription Receipts of the Company at a price of C$0.55 per Subscription Receipt, for aggregate gross proceeds of C$25,000,030. The Underwriters will arrange for purchases of the Subscription Receipts.

The Underwriters will have the option to purchase up to an additional 9,091,000 Subscription Receipts at the issue price for a period of up to two days prior to closing for additional gross proceeds of up to C$5,000,050.

Each Subscription Receipt will be automatically exchanged, for no additional consideration, for one common share ("Common Share") of the Company upon approval by the Bureau of Indian Affairs (U.S.A.) of the 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 "Resolution").

If the Bureau of Indian Affairs (U.S.A.) does not approve the Resolution prior to Closing (defined below), the proceeds from the Offering will be held in escrow by a Canadian trust company for the benefit of the holders of the Subscription Receipts (the "Escrowed Funds"). The Escrowed Funds will be invested in interest bearing or discount obligations of the Government of Canada or a province of Canada or one of the five largest Canadian chartered banks.

The Escrowed Funds will be released to the Company if the following condition (the "Release Condition") has been satisfied by September 5, 2008 (the "Outside Date"):

a) The Bureau of Indian Affairs (U.S.A.) approves the Resolution.

If the Release Condition has not been satisfied by the Outside Date, each of the holders of Subscription Receipts will have the option of either: (i) having returned to it out of the Escrowed Funds and, to the extent required, out of the general funds of the Company, an amount equal to the Issue Price for its Subscription Receipts, as applicable; or (ii) exchanging its Subscription Receipts for Common Shares.

Stetson Oil & Gas Ltd. plans to use the net proceeds of this financing to fund the acquisition of the North Dakota tribal leases, the 2008 drilling program and general working capital purposes. The Underwriters shall receive compensation comprised of cash and broker warrants upon closing of the offering, subject to the Release Condition.

The offering is scheduled to close on or about July 31, 2008 ("Closing") and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange. The securities to be issued under this offering will be offered by way of private placement exemptions in all the provinces of Canada and in the United States on a private placement basis pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended.

The securities being offered have not, nor will they be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

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.

Regulatory Statements

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 terms of the financing, the planned use of proceeds, and receipt of all approvals. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; regulatory approvals, the actual results of exploration activities; regulatory risks; and other risks of the oil and gas industry. 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 information 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.

THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

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