Stetson Oil and Gas Ltd. Closes 10% Acquisition of Exploration Block in the Llanos Basin of Colombia

CALGARY, ALBERTA--(Marketwire - May 17, 2011) - STETSON OIL & GAS LTD. (TSX VENTURE:SSN) ("Stetson" or the "Company") is pleased to announce that it has closed its previously announced farm-out of a 90% interest in the Llanos Basin Block (the "Block") to a wholly-owned subsidiary of Sagres Energy Inc. ("Sagres") in consideration for the Company retaining a 10% carried interest during the first exploration phase (the "Carried Interest") (See News Release dated April 20, 2011).

The Block has an area of 51,190 Ha (gross) and is located in the Llanos Basin of Colombia, a prolific basin in the foreland of the Colombian Andes. The Block is on trend with existing and new discoveries and is also close to the giant Caño Limon field. Currently, there is around 900 km of 2D seismic data over this Block. Existing 2D seismic has identified a significant lead over this block and it is possible that future seismic programs will add to the estimated prospectivity of the Block. The Block carries an additional royalty of 1% payable to the Government of Colombia in addition to the basic royalty scheme established under Colombia Law, being 8% for up to 5,000 bopd of production and increasing to 25% for a 600,000 bopd field. All other terms of the contract are standard to the model Colombian E&P Contract. Sagres will have an option to acquire the Company's Carried Interest in the Block over the next twelve months at a mutually agreed price.

Stetson is a junior oil and gas company with exploration, development, and production assets in North Dakota, USA.

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 prospective nature of the Block; current strategic initiatives; prospective nature of the Company's properties; estimates regarding future production; 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; transaction risks; 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.