Nordic Oil and Gas to Submit Application for Underground Coal Gasification Project

    Pilot Project at Drumheller Would be Only Second Ever in Canada

    WINNIPEG, July 2 /CNW/ - Donald Benson, Chairman and Chief Executive
Officer of Nordic Oil and Gas Ltd. ("Nordic" or the "Company"), today
announced that the Company, along with its joint venture partner, Western
Warner Oils Ltd. ("Western Warner"), are examining the possibility of using
Underground Coal Gasification ("UCG") as a means to convert the coal into
product gas at its recently acquired Drumheller, Alberta property.
    Nordic is currently making preparations to submit an application to the
Province of Alberta for a UCG pilot project, only the second such project ever
undertaken in Canada, and one of just a few in North America. The Company
announced on June 1, 2009 that it had acquired 3,856 hectares (9,528 acres) of
coal leases located at Drumheller, Alberta and that historical data had
determined that the leases contained approximately 54,000,000 recoverable
tonnes of coal(1).
    In March of this year, the Alberta government, through the Alberta Energy
Research Institute, announced that it was providing $8.83 million for a
$30-million deep coal gasification project being undertaken by a Calgary-based
company. It is expected the project will demonstrate the ability to produce
environmentally clean synthetic gas from Alberta's vast, deep, coal resources,
with the future potential of utilizing the coal seams for carbon capture and
storage.
    "The basic UCG process involves drilling two wells into the coal - one
for injection of the oxidants (water/air or water/oxygen mixtures), and
another some distance away to bring the product gas to the surface," said Mr.
Benson. "The technique offers an alternative to conventional coal mining
methods."
    Industry experts are predicting that there is going to be a resurgence
and re-branding of coal-powered fuel in this country. Toward this end, new
forms of extraction are being introduced and studied, including underground
coal gasification, which boasts dramatic reductions in emissions, low energy
costs and relatively minor surface footprints when compared to the surface and
mining-based coal power plants commonly used throughout North America.

    About Nordic Oil and Gas Ltd.

    Nordic Oil and Gas Ltd. is a junior oil and gas company engaged in the
exploration and development of oil, natural gas and Coal Bed Methane in
Alberta and Saskatchewan. The Corporation is listed on the TSX Venture
Exchange and trades under the symbol NOG.

    (1) "A qualified person has not done sufficient work to classify the
        historical estimate as current mineral resources, the issuer is not
        treating the historical estimate as current mineral resources and the
        historical estimate should not be relied upon."

    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 the contents of this News
Release.

    This press release contains forward-looking statements with respect to
Nordic Oil and Gas Ltd. Lloydminster property, and matters concerning the
business, operations, strategy, and financial performance of Nordic. These
statements generally can be identified by use of forward-looking words such as
"may", "will", "expect", "estimate", "anticipate", "intends", "believe" or
"continue" or the negative thereof or similar variations. Such forward-looking
statements are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations, including that the estimates
and projections regarding the Lloydminster property are realized.
Forward-looking statements are based on a number of assumptions which may
prove to be incorrect. Unless otherwise stated, all forward looking statements
speak only as of the date of this press release and Nordic does not undertake
any obligation to update such statements except as required by law.

    %SEDAR: 00015188E

For further information: Donald Benson, Chairman & CEO, Nordic Oil & Gas
Ltd., Tel: (204) 956-5042, Fax: (204) 897-7154, E-mail: dbenson57@shaw.ca; Don
Bain, Corporate Secretary, Nordic Oil and Gas Ltd., Tel. (204) 229-7751, Fax:
(204) 943-1829, E-mail: donbain1@mts.net; www.nordicoilandgas.com