Base Oil & Gas Ltd.(BOG) has entered into a non-arm's length farm-in agreement to develop Cardium production with a private company in the Pembina area, Canada. By paying 50% of the drilling, completing, and equipping costs of up to five horizontal wells, BOG will earn a 30% interest in 3,890 net acres of Cardium rights. Up to 9 additional horizontal locations have been identified on the acreage. Drilling and completion costs are estimated to be $2.5 million per well.

The first well of the program is scheduled to be drilled prior to the end of the year. To finance the farm-in arrangement, BOG intends to issue on a non-brokered private placement basis (the "Private Placement") up to 3.2 million common shares ("Common Shares") at $0.25 per share for gross proceeds of up to $800,000 and up to 1.5 million Common Shares on a "flow-through" basis under the Income Tax Act (Canada) ("Flow-Through Shares") at $0.30 per Flow-Through Share for gross proceeds of up to $450,000. Total proceeds will be $1,250,000. The Private Placement of Flow-Through Shares is expected to close on or before December 23, 2009, and Private Placement of Common Shares on January 15, 2010.

Both the participation by the Company in the farm-in program and the Private Placement are subject to the approval of the TSX Venture Exchange, which may impose conditions in connection with its approval of either or both of those transactions. All securities issued in connection with the Private Placement will be subject to a four-month hold period.

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