Stetson Oil & Gas Ltd. announces $10 million private placement financing



    
    /NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMENATION IN THE
    UNITED STATES/
    

    Trading Symbol: TSX.V: SSN

    CALGARY, Aug. 28 /CNW/ - STETSON OIL & GAS LTD. (TSXV: SSN) ("Stetson" or
the "Company") is pleased to announce that it has entered into an agreement
with a syndicate of underwriters led by Canaccord Capital Corporation and
including Macquarie Capital Markets Canada Ltd. (the "Underwriters"). The
Underwriters have agreed to act as agent for the sale of up to 50,000,000
units of the Company at a price of $0.20 per unit for total gross proceeds of
$10,000,000 (the "Offering"). Each unit will be comprised of one common share
and one share purchase warrant, with each whole share purchase warrant
entitling the holder thereof to acquire one Stetson common share at a price of
$0.30 for a period of 24 months following closing.
    Stetson has agreed to acquire leases covering 8,185 acres of Bakken
prospective Tribal Lands on the Fort Berthold Reservation in North Dakota.
Stetson has also entered into agreements to lease approximately 11,000 acres
of land held in trust by the U.S. Department of the Interior for individual
tribe members ("Allotment Lands"). Stetson will require funds of approximately
US$8.3 million to close the acquisition of these leases which is expected to
be due and payable by the end of September, 2008.
    In consideration for their efforts, the Underwriters will receive a cash
commission equal to 6% of the gross proceeds of the Offering and be issued
compensation options that will entitle them to acquire a number of Stetson
common shares that is equal to 10% of the units sold under the Offering at a
price of $0.30 per warrant exercised for a period of 24 months from the
closing date.
    The Offering is expected to close on or about September 17, 2008. The
Offering is subject to certain conditions including, but not limited to, the
receipt of all necessary regulatory approvals, including the approval of the
TSX Venture Exchange.
    The Company is also pleased to announce that it has received a bridge
loan in the principal amount of CDN$1,707,153.17, the proceeds of which are to
be used to make a payment of an equal amount to complete the lease of an
initial 2,432 gross acres of Bakken prospective lands in North Dakota for
which the Company has received final registration approval from the Bureau of
Indians. The bridge loan is evidenced by a debenture issued by the Company,
with the amount outstanding to accrue interest at a rate of 12% per year,
mature in 30 days and be secured against the assets of the Company. Subsequent
payment of approximately US$1.46 million is due on September 3, 2008, and
US$562,000 is due on September 10, 2008 in respect of a total of 2,881 gross
acres.
    The Company also announces that, conditional upon closing of the private
placement, it intends to issue by way of a special dividend a preferred share
("Series 1 Share") to each shareholder of the Company. Each Series 1 Share
shall entitle the holder thereof to receive, in priority to and to the
exclusion of any other class of shares of the Corporation, as and when
declared by the Board of Directors of the Corporation out of the monies of the
Corporation properly applicable to the payment of dividends, the proceeds of
any non-appealable judgment or settlement monies paid to and received by the
Corporation in connection with its proposed claim against Thomas Weisel
Partners Canada Inc. ("Weisel") and any others who may be found to be liable
in respect of the Corporation's incomplete bought deal financing of July 2008
pursuant to an engagement letter with Weisel dated July 14, 2008 (the "Claim")
prior to December 31, 2013, subject to deduction of any taxes or similar
amounts paid or payable or required to be withheld on such payments and of all
expenses of or for the account of the Corporation in recovering such monies.
Such amounts shall be paid rateably on all Series 1 Shares then outstanding.
The holders of the Series 1 Shares shall not be entitled to any other
dividends or distributions and shall not have any other rights or
entitlements. The issuance of the Series 1 Shares is subject to the receipt of
all necessary regulatory approvals.

    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.

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

    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 future litigation matters;
potential damages that have been or may be incurred; potential for oil and gas
on the leases; terms of the acquisitions; terms of the financing and the
Company's ability to attract financing on acceptable terms; timing and cost of
development plans and actual development; production forecasts; receipt of
regulatory approval; benefits of the acquisitions; impact of technology; and
future financial or operating performance of the Company 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; reliance on technology;
and delays in obtaining regulatory approvals. 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 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. The Company does not undertake
to update any forward-looking information, except in accordance with
applicable securities laws.

    THE COMMON SHARES WILL NOT 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
REGISTRATION OR AN APPLICABLE EXEMPTION FROM U.S. REGISTRATION REQUIREMENTS.
THIS PRESS RELEASE SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THE SECURITIES IN ANY STATE
IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL.




For further information:

For further information: Bill Ward, President & CEO, Phone: (403)
531-1700, Direct: (403) 531-1711, Email: bward@stetsonoilandgas.com; Ahmed
Said, Chairman, Phone: (403) 263-3000, Fax: (403) 263-3041, Email:
asaid@forbesmanhattan.com

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Stetson Oil & Gas Ltd.

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