BLACKSTEEL ANNOUNCES CLOSING OF PRIVATE PLACEMENT OFFERING

Trading Symbol: BEY -TSX: V

CALGARY, Dec. 10 /CNW/ - Blacksteel Energy Inc. ("Blacksteel" or the "Company") announces that it has closed its previously announced (news release dated October 12, 2010) private placement offering (the "Offering") of securities on December 9, 2010 (the "Closing Date") resulting in aggregate gross proceeds of $479,296.50.  The private placement resulted in issuing 708,400 common share units (the "Units") and 291,363 Class A Common Shares ("Common Shares") issued on a flow-through basis ("Flow Through Shares").  Each Unit is comprised of one (1) Common Share of the Company issued at a price of $0.45 per Common Share and one Common Share purchase warrant (each a "Warrant") entitling the holder to purchase one Common Share of the Company at an exercise price of $0.60 per Common Share for a period of two (2) years from the Closing Date.  Each Flow Through Share was issued at a price of $0.55. 

Finders fees in the amount of $30,210.40 were paid and 51,312 finders warrants (the "Finder Warrants") were issued to purchase Common Shares of the Company at an exercise price of $0.45 per Common Share in respect of Units sold and 12,400 at an exercise price of $0.55 per Common Share in respect of Flow Through Shares sold, all within twelve (12) months from the Closing Date. Finders fees were paid and Finders Warrants were issued to certain arm's length third parties based on that portion of the gross proceeds raised by such finders.

This transaction is subject to the approval of the TSX Venture Exchange who conditionally accepted the Company's Offering on October 20, 2010.

All securities issued by Blacksteel in connection with the closing of the Offering have been legended with the following endorsement:

"Unless permitted under securities legislation, the holder of this security must not trade the security before April 10, 2011"

The Company intends to use the proceeds of the Offering to fund the Company's exploration and development activities and for general corporate and working capital purposes. 

Blacksteel is a junior oil and gas company. Its principal business activity is the exploration, exploitation, development and production of petroleum and natural gas resources in Alberta. The Company has a 100% working interest in 22 sections of Crown oil sands leases in the Peace River area of northern Alberta, a working interest in a natural gas producing property in the Grassland area of Alberta, is evaluating production alternatives for an oil play in the Devon area of central Alberta and has a 100% working interest in a 4 section P&NG lease in the Del Bonita Area of Southern Alberta.

ON BEHALF OF THE BOARD OF DIRECTORS OF

BLACKSTEEL ENERGY INC.

(signed) "Walter Wakula" 

Walter Wakula, Chairman of the Board

Neither the 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.

This news release contains forward-looking statements that are not statements of fact, including the future exploration, development and seismic activities of its assets in the Del Bonita area. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurance that such expectations will prove to be correct. Results of the Company may be affected by a variety of variables and risks associated with oil and gas exploration, production and transportation and, as a consequence, actual results could differ materially from those anticipated or implied in the forward-looking statements. 

The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement and are made as of the date of this news release. Unless otherwise required by applicable securities laws, the Company does not intend nor does it undertake any obligation to update or review any forward-looking statements to reflect subsequent information, event, results or circumstances or otherwise.

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For further information:

Jacques Soroka
President, CEO and Director
Blacksteel Energy Inc.
Phone:  [phone]
Email:  [email protected]