Base Oil & Gas Ltd. Announces Strategic Light Oil Property Acquisition and Equity Financing

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES.


Base Oil & Gas Ltd. (TSX VENTURE:BOG) ("Base" or the "Company") is pleased to
announce that it has entered into a definitive purchase and sale agreement with
a private company ("Vendor") to purchase certain oil and gas producing
properties located in East Central Alberta ("New Property"). New Property
production and land base complements the recently announced East Central Alberta
Provost acquisition on July 18, 2011. Base is also pleased to announce a $15
million equity financing that will be used to fund the acquisition and the
Company's capital program for the New Property.


Property acquisition highlights: 

Through the acquisition, Base is acquiring high quality light oil and
liquid-rich gas production, with a high working interest and contiguous
undeveloped land base of more than 9,000 net acres prospective for Mannville and
Banff light oil horizontal targets, for total consideration of $7.8 million in
cash (subject to customary closing adjustments) with an effective date of July
1, 2011. GLJ Petroleum Consultants Ltd., an independent qualified reserves
evaluator, evaluated as of June 30, 2011 the total proved reserves of the
property to be 311 Mboe and total proved plus probable reserves at 438 Mboe (47%
oil and natural gas liquids). Current net production from the property is
estimated to be 121 boe/d with an additional 34 boe/d expected to be on
production by mid-September. Fourth quarter production from the New Property
should average 155 boe/d (56% oil). Recent net cashflow for the property has
been approximately $150,000/month for an estimated cash flow netback of $42/boe,
which the Company believes will translate into an attractive recycle ratio.
Subject to commodity prices, fourth quarter cashflow is expected to average
$190,000/month.


Strategic Rationale and Metrics 

The property acquisition is strategic to Base as it materially expands its
holdings in East Central Alberta. With this purchase the Company grows its land
position in the area to 28,160 acres of undeveloped oil and gas rights. With the
completion of the acquisition the breadth of drilling opportunities available to
Base will expand to include the Viking, Mannville Glauconite, Mannville Detrital
and Banff formations. The Company has identified over 10 drilling locations and
numerous other upside projects on the New Property lands primarily targeting
highly economic light oil from the Banff and Mannville formations.


Based on total consideration for the acquisition of $7.8 million and adjusted
for an internally generated estimate for undeveloped land value of $1.8 million,
the expected acquisition metrics are as follows:




   Production:  $49,586 per producing boe (approx. $38,710 per producing boe
                including new production)                                   
   Reserves:    $13.70 per proved plus probable boe                         



NCP Northland Capital Partners Inc. acted as an advisor to Base on this property
acquisition and the previously announced land purchase at Provost.


Proforma Company Operating Information as of July 1, 2011



Production:               approx. 201 boe/d                                 
Reserves                                                                    
 Proved:                  690 Mboe (Base as of December 31, 2010)(1)        
                          311 Mboe (New Property as of June 30, 2011)(2)    
 Proved plus Probable:    985 Mboe (Base as of December 31, 2010)(1)        
                          438 Mboe (New Property as of June 30, 2011)(2)    
Net Land Position (acres)                                                   
 East Central Alberta:    28,160                                            
 Ante Creek:              3,680                                             
 Southern Alberta:        3,532                                             
 Pembina:                 576                                               
                                                                            
Notes:                                                                      
(1)  As evaluated by Sproule Associates Limited in an independent reserves  
     assessment and evaluation of the oil and gas properties of Base with an
     effective date of December 31, 2010.                                   
(2)  As evaluated by GLJ Petroleum Consultants Ltd. in an independent       
     reserves assessment and evaluation of the New Property with an         
     effective date of December 31, 2010.                                   



Equity Financing

Base is also pleased to announce that it has entered into an engagement
agreement with a syndicate of investment dealers led by Dundee Securities Ltd.
and including Casimir Capital Ltd., Macquarie Capital Markets Canada Ltd. and
NCP Northland Capital Partners Inc. (collectively, the "Agents") to sell, on a
best efforts private placement basis, 44,445,000 special warrants (the "Special
Warrants") of the Company at a price of $0.27 per Special Warrant and 9,375,000
flow-through common shares (the "Flow-Through Shares") at a price of $0.32 per
Flow-Through Share for aggregate gross proceeds of up to $15,000,150.


Each Special Warrant will be exercisable into one common share of the Company (a
"Common Share") by the holders thereof at any time after the private placement
closing date for no additional consideration and all unexercised Special
Warrants will be deemed to be exercised at 4:00 pm (Calgary time) on the earlier
of: (a) the date that a receipt is obtained for a short form prospectus (the
"Final Prospectus") from the Canadian securities regulatory authorities where
the Special Warrants are sold qualifying for distribution the Common Shares
underlying the Special Warrants (the "Qualification Date"); and, (b) the date
that is four months and a day following the closing date. If the Qualification
Date has not occurred on or before September 2, 2011, each Special Warrant shall
thereafter entitle the holder to receive upon exercise, for no additional
consideration, an additional number of Common Shares equal to 10% of the number
of Common Shares issuable upon the exercise or deemed exercise of the Special
Warrants, resulting in each Special Warrant being exercisable for 1.1 Common
Shares. The Company has agreed however continue to use its best efforts to
obtain such receipt for a short form prospectus.


The Company has granted the Agents an option to offer up to an additional 15% of
the Special Warrants, at the issue price, exercisable in whole or in part at any
time up to 48 hours prior to the private placement closing date.


The net proceeds of the Special Warrants offering will be used to fund the New
Property acquisition purchase price and the Company's capital expenditure
program for the New Property and general corporate purposes. The gross proceeds
of the Flow-Through Share offering will be used for exploration expenditures on
the Company's properties and will renounce Canadian Exploration Expenses with an
effective date of no later than December 31, 2011.


The private placement is expected to close on or about August 31, 2011. The
Special Warrants will be subject to a hold period; expiring the earlier of: (a)
the date that is four months and a day following closing, and (b) the first
business day after a receipt is issued for a Final Prospectus by the securities
regulatory authorities. The Flow-Through Shares will be subject to a hold period
expiring the date that is four months and a day following closing. The private
placement is subject to all required approvals, including the approval of the
TSX Venture Exchange.


Recent Corporate Milestones: 

The Company was recapitalized by a new management group on June 14, 2011 at
which time the assets included the Cardium liquids rich gas resource property at
Pembina and its Sunburst light oil properties at Coutts. The Company announced
on June 30, 2011 that it had closed a property acquisition in the Ante Creek
area. The Ante Creek property has horizontal drilling potential for Montney
liquids-rich gas and Nordegg oil. On July 18, 2011 the Company announced the
Provost acquisition which further enhances the inventory of light oil drilling
opportunities for the Company. The New Property adds to its inventory of high
impact light oil resource opportunities and positions the Company for efficient
growth on an absolute and per share basis. Base has updated its investor
presentation with further details on the property acquisition and related
private placement financing. The presentation can be viewed at
www.baseoilandgas.ca.


Base Oil and Gas Ltd. is a Calgary based growth oriented oil and gas company,
focused on the development of light oil and liquids-rich gas reserves in the
Western Canadian Sedimentary basin.


BOEs

Boes may be misleading, particularly if used in isolation. A boe conversion
ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.


FORWARD-LOOKING STATEMENTS

Certain information included in this press release constitutes forward-looking
information under applicable securities legislation. Such forward-looking
information is provided for the purpose of providing information about
management's current expectations and plans relating to the future. Readers are
cautioned that reliance on such information may not be appropriate for other
purposes, such as making investment decisions. Forward-looking information
typically contains statements with words such as "anticipate", "believe",
"expect", "plan", "intend", "estimate", "propose", "project" or similar words
suggesting future outcomes or statements regarding an outlook. Forward-looking
information in this press release may include, but is not limited to,
information with respect to: the anticipated completion of the acquisition of
the New Property, and the pro forma impact on the Company; the anticipated
completion of the private placement financing and the amount of funds to be
raised thereunder; expected timing to bring on and the quantity of new
production; receipt of all necessary approvals for the New Property acquisition
and the private placement financing; the anticipated benefits of the New
Property acquisition including, without limitation, an enhanced recycle ratio
(recycle ratio being based on field netback per boe divided by finding,
development and acquisition costs per boe) and efficient growth on an absolute
and per share basis; operational decisions and the timing thereof; development
and exploration plans, the likelihood of success and the timing thereof; the
sufficiency of and access to pipeline infrastructure; and future royalty
treatment of any future production. Forward-looking information is based on a
number of factors and assumptions which have been used to develop such
information but which may prove to be incorrect. Although the Company believes
that the expectations reflected in such forward-looking information is
reasonable, undue reliance should not be placed on forward-looking information
because the Company can give no assurance that such expectations will prove to
be correct.

In addition to other factors and assumptions which may be identified in this
press release, assumptions have been made regarding and are implicit in, among
other things: field production rates and decline rates; the ability of the
Company to secure adequate product transportation; the impact of increasing
competition in or near the Company's plays; the timely receipt of any required
regulatory approvals; the ability of the Company to obtain qualified staff,
equipment and services in a timely and cost efficient manner to develop its
business; the Company's ability to operate the properties in a safe, efficient
and effective manner; the ability of the Company to obtain financing on
acceptable terms; the ability to replace and expand oil and natural gas reserves
through acquisition, development of exploration; the timing and costs of
pipeline, storage and facility construction and expansion; future oil and
natural gas prices; currency, exchange and interest rates; the regulatory
framework regarding royalties, taxes and environmental matters; and the ability
of the Company to successfully market its oil and natural gas products. Readers
are cautioned that the foregoing list is not exhaustive of all factors and
assumptions which have been used.


Statements relating to "reserves" are by their nature forward-looking
statements, as they involve the implied assessment, based on certain estimates
and assumptions that the reserves described can be profitably produced in the
future. The recovery and reserve estimates provided herein are estimates only
and there is no guarantee that the estimated reserves will be recovered. As a
consequence, actual results may differ materially from those anticipated in the
forward looking statements. 


Forward-looking information is based on current expectations, estimates and
projections that involve a number of risks and uncertainties which could cause
actual results to differ materially from those anticipated by the Company and
described in the forward-looking information. The material risk factors
affecting the Company and its business are contained in the Company's annual
information form for the year ended December 31, 2010 dated July 29, 2011 and
Management's Discussion and Analysis which are available under the Company's
issuer profile on SEDAR at www.sedar.com.


The forward-looking information contained in this press release is made as of
the date hereof and the Company undertakes no obligation to update publicly or
revise any forward-looking information, whether as a result of new information,
future events or otherwise, unless required by applicable securities laws. The
forward looking information contained in this press release is expressly
qualified by this cautionary statement.