Cougar Oil and Gas Canada Inc.
OTC Bulletin Board : COUGF

February 03, 2011 02:05 ET

Cougar Oil and Gas Canada Inc. Announces Operations Update

CALGARY, ALBERTA--(Marketwire - Feb. 3, 2011) - Cougar Oil and Gas Canada Inc. ("Cougar" or the "Corporation") (OTCBB:COUGF) is pleased to provide an operations update to the previously announced Q1, 2011 Trout core area multi-well drilling program and 3D seismic program.

The previously announced 23.8Km2 high resolution 3D seismic program is nearing completion -the data recording and the overall program will be finished in 2 days. First drafts of processed seismic data expected within 6 to 8 weeks. This seismic data will provide the Corporation with the detailed geophysical information needed to support the geological selection of the drilling programs which will be executed over the next 18 to 24 months.

The previously announced multi-well drilling program continues on schedule with final permitting underway. The final ERCB drilling license applications are expected to be submitted this week. The lease construction scouting and planning is completed and the field work will begin as soon as the drilling licenses are received. The lease construction for the planned development wells will utilize existing infrastructure including access roads, leases, pipelines and power. This will allow the Corporation to minimize the overall project "foot print," reducing the construction costs and shortening the time to tie in the wells and begin production. It is anticipated the drilling rig will mobilize to the project area by the middle of February, 2011.

Cougar also completed the two wells in the previously announced reactivation program in the Trout core area. A service rig deepened the 10-21 well to test additional lower Keg River oil formations. Oil was seen on the initial swab test and the well has been put on production. The second well also had oil shows after the program and is currently having the pump installed and should be on production within the next 48 hrs. The two wells which had been suspended for several years are tied in with pipelines to the main Cougar production facility. Coincidently with that work, we have completed a work over program on an adjacent well that closed off water bearing zones and to focus on the oil bearing zones and have returned that well to production. All these operations are low capital cost with quick payback's to the investment.

Mr. William Tighe, CEO and Chairman of the Board for Cougar stated, 'We are very excited as the Trout 3D seismic program field work finishing ahead of schedule. The anticipated success of the seismic, drilling and production projects will allow Cougar to continue towards the previously stated corporate production objective of 2000 bbl/d. With the company net positive cash flow from operations, and with an baseline average cost of production combined with reinvestment of cashflow for workovers, repairs of suspended wells which then have resulted in increased production and cash flow - we have averaged $30 Cdn dollars per barrel for operation costs for the past year. Combine that with the current move of oil to the $100 USD dollars per barrel, we have additional opportunities to provide additional cash flow which we will reinvest in development projects and reducing need for external capital. 

We also submitted our responses to the most recent questions from the NYSE Amex analysts yesterday and look to continue to move that process forward.

For those interested in the seismic program – we have added pictures to the web site which were taken recently from the program"

About Cougar Oil and Gas Canada Inc.:

Cougar Oil and Gas Canada Inc. (COUGF:BB) is based in Calgary, Alberta, Canada and a publicly traded oil and gas exploration and production company. The focus is on the exploration and development of Canadian based onshore oil and gas properties. The current projects are the Trout light oil production area in north central Alberta, Lucy in the Horn River Basin in northeast British Columbia and First Nation Joint Venture and area projects located in north central Alberta.

Cougar's strategy is to increase shareholder value building on the existing infrastructure and production as the foundation and a large contiguous land base with multiple opportunities to grow through the drill bit with targets supported by 2D and 3D seismic and excellent well control.

Additional information is at http://www.cougaroilandgascanadainc.com. or http://www.cougarenergyinc.com.

Forward-looking Statements:
 This press release contains forward-looking statements. The words or phrases "would be," "will" "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," or similar expressions are intended to identify "forward-looking statements". The Company's business is subject to various other risks and uncertainties, which may be described in its corporate filings (www.sec.gov) or (SEDAR in Canada). Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company cautions readers not to place reliance on such statements. Cougar Oil and Gas Canada Inc. undertakes no obligation to update or publicly revise forward looking statements or information unless so required by applicable securities laws.

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