BLACKSTEEL SHARES TO RESUME TRADING; COMPANY PROVIDES UPDATE ON ALBERTA BAKKEN

CALGARY, May 17 /CNW/ - Blacksteel Energy Inc. ("Blacksteel" or the "Company") reports that on April 30, 2011 it entered into a letter of intent ("LOI") with a third party that contemplated a corporate transaction. The shares of Blacksteel were halted in accordance with TSX Venture Exchange Policy 5.2. Upon preliminary due diligence and further consideration of the terms of the proposed transaction, Blacksteel's board has determined that it will not proceed with the proposed transaction. The LOI expired on May 16, 2011 and was not extended by Blacksteel. The Company expects that its shares will resume trading today.

The Company is pleased to make note of more licensing activity near its land position in the Southern Alberta Bakken. Jacques Soroka, President and CEO said: "Yet another well has been licensed by a major oil company within less than 2 miles of our land position. This brings the total licensed and/or drilled wells within 6 miles of our lands to 10 since the Alberta Bakken play emerged early in 2010."

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, has a working interest in an oil well 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.

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 may contain forward-looking statements that are not statements of fact. 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, including without limitation, its expectations regarding the timing for its shares to resume trading, are expressly qualified in their entirety by this cautionary statement and are made as of the date of this news release. The resumption of trading of the Company's shares is subject to regulatory policy and procedures which are not necessarily in the control of the Company. 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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BLACKSTEEL SHARES TO RESUME TRADING; COMPANY PROVIDES UPDATE ON ALBERTA BAKKEN