Bounty Oil and Gas NL (ASX:BUY) Releases 1 for 10 Rights Issue Offer Document

Brisbane, Nov 19, 2010 AEST (ABN Newswire) - Bounty Oil & Gas NL (ASX:BUY) (PINK:BYOGF) releases the following in connection with the 1:10 non-renounceable rights issue at A$0.10 (10 cents) announced to ASX on 17 November.

- Offer Document dated 18 November 2010.

- Draft Entitlement and Application Form.

In accordance with the Key Dates timetable the Record Date for determining shareholders (Eligible Shareholders) entitled to participate in the Issue and the 1:10 entitlement to New Shares will be 25 November 2010.

The Offer Document, Entitlement and Acceptance Form will be despatched to Eligible Shareholders (Despatch Date) on 26 November 2010.

Letter to Shareholders:

Dear Bounty Shareholder,

On behalf of your Directors, I am pleased to offer you the opportunity to invest in Bounty's continued growth in the upstream oil & gas business.

Bounty is inviting all shareholders to participate in a non-renounceable rights issue of one (1) New Share for every ten (10) Existing Shares held. As a Shareholders you are also invited to apply for additional New Shares in excess of your full Entitlement where indicated on the Application Form which accompanies this Offer.

The issue price of each New Share is an attractive A$0.10 (ten cents).

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 A$20 million. Bounty will be "free carried" through this first well and will not contribute to the costs of this first well.

The potential gas in place to be tested by the well is 4.1 trillion cubic feet. 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 actively 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 participated 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.

Information about Bounty's portfolio of production, exploration and development assets is briefly summarised in Section 3 of this Offer and is also set out in the Full Year Financial Report for the financial year to 30 June 2010 posted to all Shareholders.

Details of Bounty's current operations and projects are contained in its market announcements to the ASX and corporate updates all of which are also posted on its website - http://www.bountyoil.com

If fully subscribed the Rights Issue will result in the issue of a maximum of 90,000,000 New Shares raising approximately $9 million before expenses of the Offer. The directors of Bounty reserve the right to place the shortfall of shares not taken up by shareholders at the Issue Price of $0.10 per New Share to existing shareholders at the Record Date if they apply for additional New Shares. The directors reserve the right to place the balance of any other shortfall shares to sophisticated and/or professional investors.
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.

Your Board now offers the opportunity for all Bounty shareholders to subscribe for New Shares pro rata to their existing holdings and strongly supports this capital raising initiative.

The Rights Issue is partly underwritten and the directors and company executives intend to subscribe for their full entitlement to New Shares.
By participating in this new issue of shares you will be investing in Bounty as it participates on a free carried basis in the New Seaclem 1 well in PEP 11 and continues to build oil revenue, oil and gas reserves and acreage while participating in it's other Projects in the very fast growing energy business.

I commend this rights issue to you for your consideration and thank you for your continued support of Bounty.

Yours sincerely
Graham C. Reveleigh
Chairman

For the complete offer document, please refer to the following link:

http://www.abnnewswire.net/media/en/docs/64228-ASX-BUY-614225.pdf

Contact

Graham Reveleigh Chairman Tel: +61-7-4033-1805 Email: mining@cairns.net.au Philip F Kelso Chief Executive Officer Tel: +61-2-9299-7200 Email: geo@bountyoil.com http://www.bountyoil.com