Stetson Enters Into Option Agreement on Two Offshore Blocks

Stetson Oil & Gas Ltd. ("Stetson" or the "Company") (TSX VENTURE:SSN) is pleased
to announce that it has entered into an exclusive option agreement (the "Option
Agreement") with a private company ("Privateco") which is in negotiations to
acquire an interest in two prospective exploration blocks offshore West Africa
(the "Blocks"). A definitive contract for the Blocks is expected to be signed by
Privateco, along with related ratifications by pertinent government authorities,
within the next 30 days. 


Pursuant to the terms of the Option Agreement, the Company has the option to
negotiate, on an exclusive basis, with Privateco in respect of a possible
investment or acquisition of an interest in the Blocks up to a net 66.7% of the
interest acquired by Privateco (the "Proposed Transaction"). The term of the
Option Agreement is until October 15, 2012, and is subject to extension upon
mutual agreement among the parties.


In connection with the Option Agreement, the Company has provided a US$1,500,000
loan to Privateco at an interest rate of 10% per annum. The loan is secured by a
pledge of all of the outstanding shares of Privateco, and is also guaranteed by
a third party private company. In the event that a definitive agreement related
to the Proposed Transaction is not executed prior to the expiry of the Option
Agreement, or if the parties terminate the Option Agreement, the Company shall
immediately be reimbursed the principal amount of the loan outstanding, all
accrued interest, and receive a facilitation fee equal to $500,000.


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


Regulatory Statements 

This press release contains "forward-looking information" within the meaning of
applicable Canadian securities legislation. Forward-looking information
includes, without limitation, statements regarding the terms and conditions of
the Option Agreement; the acquisition of an interest in Privateco or the Blocks
and the terms of the loan with Privateco. 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 Stetson, as the case
may be, 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; the actual results
of current exploration activities; risks associated with operation in foreign
jurisdictions; ability to successfully integrate acquired properties; foreign
operations risks; and other risks inherent in the oil and gas industry. 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
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. Stetson
does not undertake to update any forward-looking information, except in
accordance with applicable securities laws.