Bounty Oil and Gas NL (ASX:BUY) Non Renounceable 1:10 Rights Issue At A$0.10 Per Share

Sydney, Nov 17, 2010 AEST (ABN Newswire) - Bounty Oil and Gas NL (ASX:BUY) (PINK:BYOGF) announces that the company will make a non renounceable rights issue ("Issue" or "Offer") of one (1) share ("New Share") for every ten (10) shares held by holders of shares in Bounty at 5 pm. ( Western standard time (WST) ) on 25 November 2010 ("Record Date").

The Issue Price is $0.10 (ten cents) per share.

Bounty will issue a maximum of 90,000,000 New Shares at the Issue Price of $0.10 (ten cents) per share comprised of 69.9 million New Shares under the 1:10 pro rata entitlement and up to 20.1 million New Shares to shareholders who apply for additional New Shares in excess of their full entitlement to be issued at the discretion of the directors. If fully subscribed the issue will raise approximately $9 million before expenses.

The rights to subscribe for the New Shares are non -renounceable. The New Shares will be fully paid ordinary shares and will rank equally with Bounty's existing shares. The company has applied to the ASX for quotation of the New Shares to be issued to shareholders. The application for quotation - Appendix 3B accompanies this announcement.

Lead Manager - Handling Fees:

The issue lead manager is Claymore Capital, Sydney Phone: +61-2-9233-2063.

Thirty percent of the issue (21.13 million New Shares) will be underwritten by Claymore Capital and Bounty's directors and executives intend to apply for their full entitlement to New Shares.

The directors have decided to encourage support for the issue by paying a 4% stamping fee to brokers and licensed advisors who assist clients to participate in the issue. The directors reserve the right to place the issue shortfall to shareholders who apply for excess allocations and/or sophisticated investors.

At $0.10 the New Share offer price is at a 10% discount to the closing price of Bounty shares on the ASX on 15 November 2010; two business days before the announcement of the issue and a 7.1% discount to the volume weighted average price (VWAP) of Bounty shares over the five (5) day period up to and including 15 November 2010.

Key Dates for the Rights Issue:

- Issue announced, first 708AA Notice and Appendix 3B: 17 November 2010

- Notice of Rights Issue sent to shareholders. Offer Document lodged at ASX 18 November 2010

- Shares quoted on an "Ex" basis - the Ex date (date from which shares commence trading without the entitlement to participate in the Rights Issue: 19 November 2010

- Record Date (date for determining entitlements of eligible shareholders to participate in the rights issue): 25 November 2010 (5pm WST)

- Second 708AA Notice lodged at ASX 26 November 2010

- Despatch of Offer Document, Entitlement and Acceptance Forms to eligible shareholders: 26 November 2010

- Opening Date of Rights Issue: 26 November 2010

- Closing Date of Rights Issue: 10 December 2010 5pm WST

- Commencement of deferred settlement trading: 13 December 2010

- ASX notified of under subscriptions: 14 December 2010

- Allotment date for New Shares and despatch of Holding Statements (Despatch Date): 15 December 2010

- Cleansing statement under section 708A lodged with ASX 15 December 2010

- Normal ASX trading of New Shares commences: 16 December 2010

*The directors may vary the key dates subject to the ASX Listing Rules.

Full details of the terms of the offer will be contained in the Offer Document to be released to ASX on 18 November 2010. First notice under section 708AA Corporations Act 2001 accompanies this announcement.

Brief Background:

Growth Business - PEP 11 Sydney Basin - Bounty 15% after completion of New Seaclem 1 Well

Bounty is in the final stages in preparation for drilling the New Seaclem 1 well in PEP 11, offshore Sydney Basin. Bounty expects the well to be spudded in December, 2010. The well will test potentially large prospective gas resources in the Marlin-Great White prospect 55 km east of Newcastle, NSW and will be the first petroleum well drilled offshore NSW, adjacent to Australia's major gas markets. The estimated well cost is $20 million. Bounty will be "free carried" through this first well and will not contribute to the costs of this first well.

A gas discovery in PEP 11 has the potential to add material shareholder value for Bounty shareholders.

Core Business

In addition to its Growth Projects so far in 2010 Bounty has completed a number of important steps to ensure growth from its Core Business. Bounty has:

- Pursued an oil focused growth strategy in Queensland where it has participates in three new development wells in PL 214 Utopia, SW Queensland and is commencing a further two development wells supported by a 3D seismic survey programme to guide further drilling.

- Increased petroleum reserves and production through drilling and the purchase of an interest in the Naccowlah Block, SW Queensland.

- Participated in new prospect definition, seismic surveys and land acquisition in the Cooper Basin and in the Surat Basin (Queensland) where it is preparing to drill for oil at Mardi in 2011.

- Prepared to participate in drilling 2 significant new wells in the Nyuni Block offshore Tanzania in 2011 targeting gross 1.2 TCF gas and oil.

Bounty now must have additional capital for these projects and to grow.

Use of Funds:

Bounty will primarily use funds from the issue to:

- Participate in ongoing evaluation in PEP 11 following on from the New Seaclem 1 well where it will be required to contribute for likely large 3D seismic surveys and an additional commitment well;

- Participate in oil development and exploration wells and seismic surveys in Queensland in 2011;

- Participate at 50% to drill the 300,000 barrel Mardi oil prospect up dip from Alton field Surat Basin, Queensland;

- Conduct evaluation of the oil and coal seam gas (CSG) discovery in the Wakefield area of PEL 218, Cooper Basin, South Australia, delayed due to flooding in 2010;

- Drill the Nyuni 2 well up dip from proven gas in the Nyuni Block offshore Tanzania targeting 44 BCF gas net to Bounty to be followed (subject to results) by the Fanjove North 1 well targeting 16 BCF gas net to Bounty; and,

- for working capital.

Further details of the Company's exploration activities, operations and projects are contained in the Company's market announcements to the ASX and corporate updates all of which are posted on its website - www.bountyoil.com

For the complete Bounty Oil and Gas announcement please refer to the following link:

http://www.abnnewswire.net/media/en/docs/64205-ASX-BUY-613832.pdf

Contact

J Gary Higginbotham Company Secretary Bounty Oil & Gas NL Tel: +61-2-9299-7200 Email: gary@bountyoil.com