Oct 18, 2010, 11:11 ET from Bontan Corporation Inc.

TORONTO, Oct. 18 /PRNewswire-FirstCall/ - Bontan Corporation Inc. (OTCBB: BNTNF) ("The Company", "Bontan") is pleased to announce that its subsidiary, Israel Petroleum Company, Limited, Cayman, has entered into an agreement with Israeli based Ofer Investments, Ltd. ("Ofer"). Ofer will invest up to US$ 28 million and acquire a 50% equity in IPC Oil and Gas (Israel)Limited Partnership (IPC Israel) .The investment will fund IPC Israel's share of the costs of the initial two test wells and related exploration well costs relating to Sarah and Myra licenses.

Mr. Howard Cooper, the manager of our subsidiary IPC Cayman commented "We are extremely pleased to be in a partnership with one of Israel's most prominent business groups. This agreement is in alignment with our long term goals in developing the Myra and Sarah licenses and adds even more strength to an outstanding consortium."

Mr. Kam Shah, CEO of Bontan commented "We are very pleased and excited to have the Ofer family as partners in our offshore Israel oil and gas exploration project. Bontan is now in a good position to capitalize on its investment to date and looks forward to the eventual drilling of the initial exploration wells on blocks covered under the Sarah and Myra licenses."

About The Offshore Israel Project

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 8.4 TCF Tamar and Dalit natural gas discoveries by Noble Energy Inc.

The right to licences is held by a group comprising IPC Oil and Gas Ltd Partnership, Tel Aviv-based Emanuelle Energy Ltd, Modin Energy Partnership Limited, Emanuelle Energy Oil & Gas Limited Partnership and other entities including the operator, GeoGlobal Resources (India) Inc.

Bontan's indirect working interest in these licenses after the agreement with Ofer is now 5.23%. Bontan intends to hold its indirect working interest.

About Bontan Corporation Inc.:

Bontan Corporation Inc. is an oil and gas exploration company that operates and invests in exploration prospects.  Through its subsidiaries, Bontan seeks highly visible opportunities in countries around the globe with a history of natural resource production that offer exciting and attractive propositions.  Bontan seeks to minimize risk by bringing in either joint venture, carried or working interest partners, depending on the size and scale of the project.

Forward-Looking Statements

This news release includes forward-looking statements within the meaning of the U.S. federal and Canadian securities laws.  Any such statements reflect Bontan's current views and assumptions about future events and financial performance.  Bontan cannot assure that future events or performance will occur.  Important risks and factors that could cause actual results or events to differ materially from those indicated in our forward-looking statements, including:  the effect of economic and political developments in Israel;  the reliance on Emanuelle, Modin, IPC and others in the group as well as third-party consultants and contractors, to develop the Project;  the ability of Bontan and IPC Cayman to raise sufficient capital and demonstrate adequate financial capability, and the associated dilution to current investors' interests associated with the issuance of additional debt and equity securities;  the risk that the Data may show or suggest, or that the License sites ultimately may contain no, or limited amounts of, hydrocarbons;  the volatility in commodity prices for crude oil and natural gas;  the presence or recoverability of estimated reserves;  the potential unreliability or other effects of geological and geophysical analysis and interpretation; exploration and development, drilling and operating risks; competition for development of the Project; environmental risks;  government regulation or other action; potential disruption from terrorist activities or warfare in the region or at the Project site; general economic conditions; and other risks we identify from time to time in our filings with the U.S. Securities and Exchange Commission and securities regulators in Canada.  Bontan assumes no obligation and expressly disclaims any duty to update the information in this Press Release.

Cautionary Note to U.S. Investors

The United States Securities and Exchange Commissions permits oil and gas companies, in their filings with the SEC, to disclose only reserves that comply with the definitions presented at Rule 4-10(a) of Regulation S-X, available at href=",">, Above Press release contains information about adjacent properties on which we have no right to explore or drill.

SOURCE Bontan Corporation Inc.