Israel Grants Extension for Myra, Sarah Licenses

Bontan announced that the Israeli Ministry of National Infrastructure confirms in their letter dated May 16, 2010 that the two offshore licenses; the 347/Myra and the 348/ Sarah in which Bontan holds an indirect 11% net working interest are fully valid. In addition, the Ministry approved changes in the work program as submitted by our project partners Emanuelle Energy and IDB-DT Energy (2010).

The work program (to be submitted in agreed stages over the next 10 months) will begin with the delivery, completion and interpretation of the 3D seismic data by mid July 2010.

The Company is also pleased to announce that its Prospective Resource Evaluation Report prepared in accordance with National Instrument 51-101, Section 5.9 standards for review and assessment of prospective resources has been updated as of May 1, 2010 by Chapman Petroleum Engineering.

Kam Shah, CEO of Bontan commented, "We are very pleased with the MNI's decision with respect to the Sarah and Myra licenses, which was the result of hard work by our partners, Emanuelle and IDB-DT and our advisers. We are confident in meeting all the requirements of the work program and look forward to the future development of the two licenses with excitement."

About the Project Area

The Offshore Israel Project comprises two Licenses – Sarah and Myra – covering approximately 310 square miles and is located in the Levantine Basin near the recent 6.3 TCF Tamar 1, Tamar 2, and the Dalit natural gas discoveries by Noble Energy Inc.

The right to the licenses is held by a group comprising Bontan's majority-owned subsidiary, Israel Petroleum Company, Tel Aviv-based Emanuelle and IDB-DT Energy (2010) Under an Agreement entered into on March 24, 2010.

The right to the licenses is currently listed in PetroMed's name on the registry maintained by the Israel Ministry of National Infrastructures. PetroMed is now effectively controlled by one of the group members and has given unconditional release to the group for transfer of its rights. Conditioned on the MNI's transfer approval, IPC, Emanuelle and IDB-DT will receive respective working interests on the Registry of 14.325%, 54.025% and 27.15% in the PetroMed's Share of the Licenses.