PRESS RELEASE

March 31, 2005  

Deer Lake Oil & Gas Ltd. is pleased to report that it will complete and flow test its  Western Adventure #1 well (located in the Deer Lake Basin, onshore Western Newfoundland) in the second quarter of 2005.  

The initials steps in this process will involve the flow testing of three sandstone intervals located from 305m to 738m having a total thickness of 5 m.  

Each interval will be flow tested in sequence and the results used to calibrate a computer based flow model developed to predict well flow characteristics from the Western Adventure #1 well (following which additional intervals may be tested).  

Natural Gas was previously tested in this well from a 97m interval from 1425m to 1522m at a maximum rate of 100 thousand cubic feet per day. However, none of the  additional intervals subject to the current program have yet been tested. 

Western Adventure #1 was drilled and continuously cored to a total depth of 1879m and cased to a depth of 872m in 2000/2001.  

A detailed technical re-evaluation of the core and electric log information from the well has been carried out by an independent oil and gas service company.  

Based on a number of technical assumptions (including analogies with western Canadian reservoirs), this study estimates that the three intervals to be tested  may be capable of initial flow rates of approximately 70 thousand cubic feet of natural gas per day.   

Deer Lake President, Cabot Martin, said that achieving such predicted flow rates would push forward the Company’s  “gas to electric” strategy which is designed to establish an early cash flow for the company by the installation of gas turbine based electrical generation capacity in the Deer Lake Basin and the sale of electricity into the provincial electrical grid.  

He noted that while the search for oil and gas in the Deer Lake Basin is still in its infancy and while the exploration risk remains high, success in the Company’s  flow testing operations will send a strong message that the Deer Lake Basin may play a significant role in meeting future “on island” energy needs.   

Subject to equipment availability and weather conditions, flow test operations are planned to commence in early May and are expected to take about 2-3 weeks.  

On-Mangement Ltd of Calgary has been engaged to provide engineering and supervisory services with regard to these operations; Schlumberger Oilfield Services have been engaged to conduct wireline perforating and flow test operations.  

Deer Lake Oil & Gas Inc. is currently engaged in a private placement offering of its securities with a portion of the proceeds raised to be used for flow testing  operations. 

Deer Lake Oil & Gas Inc is a Newfoundland based oil and gas exploration company with its operations focused in western Newfoundland.   

For further information please see our website www.deerlakeoilandgas.com ; Phone 709 – 579 – 5050; Fax: 709 – 726 - 0584