Stream Oil & Gas Announces $10 Million Non-Brokered Private Placement

Company Accelerates Warrant Expiry Date

CALGARY, Oct. 11 /CNW/ - Stream Oil & Gas Ltd. (TSX-V: SKO) (the "Company") is pleased to announce a non-brokered private placement to raise gross proceeds of up to CDN$10,000,000 by the issuance of up to 6,500,000 Units at a price of $1.50 per Unit. Each Unit consists of one common share of the Company (a "Common Share") and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder to acquire an additional Common Share at an exercise price of $2.00 per Warrant during the first 12 month period following closing of the private placement, and at an exercise price of $2.50 per Warrant during the subsequent 12 month period.

Stream has the right to force the exercise of the warrants at any time if the shares trade at $2.75 or higher over a 20 consecutive day period for the first 12 month period and at $3.75 or higher over a 20 consecutive day period for the second 12 month period. All securities issued in connection with the private placement are subject to a statutory hold period of four months plus one day from the date of issuance in accordance with applicable securities legislation. The Company will pay finders' fees subject to Exchange policies.

"These funds will provide the ability to accelerate our development program and initiate the testing of secondary recovery technologies, which have the potential to significantly expand the value of Stream's underdeveloped assets," said Dr. Sotirios Kapotas, President and CEO. "Activity is ramping up as we move into the last quarter of 2010: we have an aggressive 100-day plan to workover 20+ wells in the Cakran-Mollaj field and expect to take over the entire Gorisht field in order to begin water flood implementation."

The private placement is subject to final agreements and approval of securities regulatory authorities and the TSX Venture Exchange. The net proceeds of the private placement will be used for Stream's production and development activities on its properties in Albania and for general working capital purposes.

Currently, the Company has increased production to approximately 1,000 boed, an increase of 462 boed from 2009. Stream expects to exit 2010 with production in the range of 1,800 to 2,200 gross boed as a result of additional well recompletions and further field takeovers (NB: Stream net volumes are less royalties of approximately 38%).

Dr. Kapotas continued, "These are exciting times for the Company. Our hard work over the past year is now being reflected in increasing production as we focus on further accelerating our growth."

This press release is not an offer to sell securities or the solicitation of an offer to buy securities in any jurisdiction. Securities may not be offered or sold in the United States absent registration or an applicable exemption from registration.

Acceleration of 2010 Warrants

Stream also announces that it will accelerate the expiry date of its January 4, 2010 warrants and January 4, 2010 Finder's warrants to November 4, 2010, all in accordance with the terms thereof. The January funding allowed Stream to begin implementation of its plans of development that were approved by Albpetrol earlier this year.

An aggregate of 10,000,000 units, comprised of a common share and one half warrant, were originally issued in January 2010, each entitling the holder of two half warrants to acquire one common share of Stream (a "Common Share") at an exercise price of $0.55 until the first business day that is two years after the date of issuance thereof (the "Expiry Date"). However, if at any time after January 4, 2010, the closing price of the Common Shares on the principal stock exchange upon which the Common Shares trade exceeds $0.75 for 20 consecutive trading days, the Expiry Date can be accelerated to a date as determined by the Company. The closing price of the common Shares on the Toronto Stock Exchange has exceeded $0.75 for over 20 consecutive trading days from August 24, 2010 to September 23, 2010, inclusive.

An aggregate of 1,652,135 warrants remain issued and outstanding as of the date hereof.

Other Information

Stream will be moving its corporate offices in mid-October. The new office address will be as follows:

    
                            Stream Oil & Gas Ltd.
                       No. 300, 609 - 14th Street N.W.
                               Campana Building
                          Calgary, Alberta  T2N 2A1
    

Forward-Looking Statements

Certain information regarding the Company contained herein constitutes forward-looking information and statements and financial outlooks (collectively, "forward-looking statements") under the meaning of applicable securities laws, including Canadian Securities Administrators' National Instrument 51-102 Continuous Disclosure Obligations. Forward-looking statements relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company.

The forward-looking statements contained herein are made as of the date of this news release solely for the purpose of disclosing the equity issue. Stream may, as considered necessary in the circumstances, update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise, but the Company does not undertake to update this information at any particular time, except as required by law. Stream cautions readers that the forward-looking statements may not be appropriate for purposes other than their intended purposes and that undue reliance should not be placed on any forward-looking statement. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement.

About Stream Oil & Gas Ltd.

Stream Oil & Gas Ltd. is a Canadian-based emerging oil and gas production, development and exploration company focused on the re-activation and re-development of three oil fields and a gas/condensate field in Albania. The Company's strategy is to use proven technology, incremental and enhanced oil recovery techniques to significantly increase production and reserves.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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For further information: Dr. Sotirios Kapotas, President & Chief Executive Officer, P: [phone]; James Hodgson, Chief Financial Officer, P: [phone], Email [email protected], Website: www.streamoilandgas.com