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

December 09, 2010 14:21 ET

Cougar Oil and Gas Canada Inc. Operations Update and Conversion of Debt to Equity

CALGARY, ALBERTA--(Marketwire - Dec. 9, 2010) - Cougar Oil and Gas Canada Inc. ("Cougar" or the "Corporation") (OTCBB:COUGF) is pleased to provide an update to the previously announced a 23.8Km2 high resolution 3D seismic program in the Corporation's Trout Core area and the previously announced Q1, 2011 multi-well drilling program, targeting the Keg River light oil play, in the Corporation's Trout Core area.

The 3D seismic program will include 79km of source lines and 111Km of receiver lines. The permitting process has moved forward and the project consultations with the stakeholders in the area were completed last week. We are now moving forward with licensing, which will take approximately 25 days and the seismic program, pending financing, is scheduled for February, 2011. The 3D seismic program, which will take place on 85% working interest Cougar leases, is anticipated to take a total of 25 days in the field.

The 3D seismic program is one of the critical information sources needed to identify the drilling locations on the Corporation's leased lands. The seismic will provide Cougar with the confirmation of structural features that are required to form an effective trap of the oil and natural gas prospects in the Trout core area. The seismic information along with the detailed geological mapping, core analysis and production data that are available as a result of the significant well control in the area is part of the risk management that is completed prior to selecting a drilling location.

The Corporation has identified five (5) drilling targets and will proceed with the permitting for a three (3) well Keg River light oil drilling program. The surveying of the surface leases and the project consultation with the stakeholders in the area was completed last week. Additional permitting work including environmental assessments, lease acquisition and well licencing, is underway and will take approximately 45 days and the drilling program, pending financing, is scheduled for February, 2011. The drilling program, which will take place on 85% working interest Cougar leases, is anticipated to take a total of 30 days.

In addition, the Corporation's parent company, Kodiak Energy, Inc. has acquired in a series of transactions with third parties $927,610 USD of unsecured debt of Cougar Energy, Inc. The Board of Directors of Kodiak Energy, Inc. and Cougar Oil and Gas Canada, Inc. have agreed to convert $477,610 USD of this intercompany debt to common shares of Cougar at close of market December 8, 2010. The balance to be held as intercompany accounts for the interim.

Mr. William Tighe, CEO and Chairman of the Board for Cougar stated, "We are pleased with the progress this past several weeks in the field with the drilling and seismic program consultations with stakeholders. In addition we are pleased to convert this debt to equity with added benefits shown in the balance sheet and shareholder equity."

About Cougar Oil and Gas Canada Inc.:

Cougar Oil and Gas Canada Inc. (OTCBB:COUGF) 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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