BLACKSTEEL ENERGY INC. ANNOUNCES PRIVATE PLACEMENT OF UP TO $1,750,000 FOR
EXPLORATION OF ITS ALBERTA BAKKEN PLAY

CALGARY, Oct. 12 /CNW/ - Blacksteel Energy Inc. ("Blacksteel" or the "Company") announces that it is proceeding with a non-brokered private placement offering of up to 1,200,000 common share units ("Units") at a price of $0.45 per Unit for gross proceeds of up to $540,000 and up to 2,200,000 Class A Common Shares ("Common Shares") issued on a Flow-Through basis at $0.55 per Common Share for gross proceeds of up to $1,210,000 (the "Flow-Through Shares") (together the Units and the Flow-Through Shares the "Private Placement Offering").  Each Unit will consist of one (1) Common Share and one common share purchase warrant (each a "Warrant").  Each Warrant will entitle the holder to purchase one Common Share of the Corporation at an exercise price of $0.60 per Warrant Share for a period of twenty four (24) months from the closing date. 

The Company has agreed to pay finders fees to an arm's length broker of 8% cash and 8% finders warrants (each a "Finder Warrant") with each Finder Warrant exercisable into one (1) Common Share of the Company at a price of $0.45 per Common Share within twelve (12) months from closing of the Private Placement Offering. 

Proceeds of the Private Placement Offering will be used primarily to fund the Company's exploration, development and seismic activities on its crown leases in the Del Bonita area of Alberta that target the Alberta Bakken emerging oil play, and for general corporate purposes.  All securities issued pursuant to the Private Placement Offering will be subject to a four month hold period pursuant to applicable securities legislation.

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, has working interests in a natural gas producing property in the Grassland area of Alberta and an oil exploration play in central Alberta and has a 100% working interest in a 4 section P&NG lease in the Del Bonita Area of Southern Alberta.

This news release contains forward-looking statements that are not statements of fact, including the contemplated completion of the Private Placement and 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.  There is no assurance that the Private Placement will close or that the proceeds of the Private Placement will be used on the Company's assets in the Del Bonita area.

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.

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

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For further information:

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