Stetson Oil & Gas Ltd.
TSX VENTURE : SSN

Stetson Oil & Gas Ltd.

September 28, 2010 16:01 ET

Stetson Provides Update

CALGARY, ALBERTA--(Marketwire - Sept. 28, 2010) - STETSON OIL & GAS LTD. (TSX VENTURE:SSN) ("Stetson" or the "Company") is pleased to provide an update on its operations and corporate initiatives.

The Company drilled its first exploration well, MHA#1-11H-148-90, with its partner, Red Willow Great Plains, LLC in September, 2009 in the Williston Basin of North Dakota, where it holds a significant interest in 20,466 gross acres of land. After an initial testing program was completed on the primary target, the Bakken zone, and subsequent marginal results, the well was shut-in in May, 2010. Thereafter, the Company filed notice of temporary abandonment of this zone in the well. Total production taken from the testing program was 1,659 barrels of oil and approximately 12,000 barrels of water in excess of load fluid pumped into the well during completion operations.

Subsequently, approximately 220 miles of 2D seismic data was acquired, reprocessed and interpreted to aid in refinement of the geologic model and determination of further drilling locations. Based on the interpretation of the seismic data and a geologic review Stetson and its partner have decided, at this time, not to drill additional wells in pursuit of the Bakken reservoir. However, the geologic review has provided indications of potential hydrocarbons in a shallower zone in the existing wellbore. A re-completion program has been planned to test this potential. The operation is expected to be completed in the fourth quarter and Stetson will be fully carried by its partner.

In Canada, Stetson produces approximately 180 boe per day from its properties in Alberta and Saskatchewan. Additionally, Stetson has recently participated with Celtic Exploration Ltd. in the drilling of a coal bed methane (CBM) well targeting the Horseshoe Canyon formation in the Joffre area of Alberta, where it holds a 40% working interest. The well spudded on August 27, 2010 and drilled to a total depth of 700 meters. The well is expected to be completed and tested over the next several weeks, after which it can be put on production. Similar wells in the area have demonstrated initial productivity of up to 250 thousand cubic feet per day of gas.

With respect to the previously announced strategic review process, the Company has identified several interested parties and continues to work with Sayer Energy Advisors to facilitate a transaction involving some or all of its Canadian assets.

With regard to its outstanding legal claim against Thomas Weisel Partners Canada Inc. ("Weisel") for damages arising in connection with the Company's incomplete bought deal financing of July 2008, the Company continues to advance its claim aggressively and hopes to schedule the trial in respect of the claim by early 2011.

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

Disclaimers:

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.

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 effect of the drilling program on the Company; reserve estimates; estimates regarding future production; the receipt of regulatory approvals; expected management rationalization and benefits therefrom; statements with respect to the conduct and the strategy of our claim against TWP; the merits of our claim; the receipt of damages in connection with the claim, the anticipated timetable of the claim; 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; acquisition risks; risks relating to 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.

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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