PRESS RELEASE

October 5, 2007 

Deer Lake Oil & Gas Inc announces an extension of its option agreement with B.G. Oil & Gas Ltd, a private St. John’s company, with respect to offshore Exploration Licence EL1102. 

EL1102 was awarded by the Canada Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) in its November 15, 2006 Land Sale and covers 124,320 hectares (307,201 acres) in the southeast part of Bay St. George offshore Western Newfoundland.   

Under the extension agreement, Deer Lake Oil & Gas Inc. has the option, until January 30, 2008, to acquire a 25% undivided working interest in all of EL1102 by paying 35% of B.G. Oil & Gas Ltd.’s bid related costs. 

In return for the option extension, Deer Lake Oil & Gas Ltd. has issued 200,000 warrants to purchase Class A Common Shares in Deer Lake Oil & Gas Inc. at $0.40 for a period of 5 years. 

Deer Lake oil & Gas Inc. is an independent oil & gas explorer based in St. John’s, Newfoundland with exploration properties in western Newfoundland and strong focus on the onshore Deer Lake Basin where it holds 90,239 contiguous hectares (225,000 acres). 

For further information please visit the company’s website

www.deerlakeoilandgas.com or email cabot@deerlakeoilandgas.com

Phone 709- 579 -5050 Fax 709 – 726-0584