CALGARY, ALBERTA--(Marketwire - Dec. 22, 2011) - Cumberland Oil & Gas Ltd. (TSX VENTURE:COG) ("Cumberland" or the "Company") is pleased to announce that it has entered into a Farmout and Joint Venture Agreement (the "Agreement") with a senior oil and gas producer (the "Farmee") on the Company's lands at West Nig in N.E. British Columbia (the "Lands").

The Lands comprise approximately 1,128 hectares in the emerging liquids rich Upper Montney play that is being developed in the area. Third-party land sale activity during 2011 on acreage either adjacent or proximate to the Lands has resulted in total expenditures of approximately $50 million. The Lands are accessible for field operations year-round and are transected by two major natural gas pipelines.

The Farmee has committed to drill, complete and production test a horizontal well (the "Test Well") targeting the Upper Montney formation at a location of their choice. The Farmee will incur 100% of the costs of that operation and upon completion, will earn a 75% working interest in the Lands. The Test Well is to be drilled on or before August 1, 2012.

The Lands are situated on a well-defined structure proximal to recent drilling successes and Cumberland believes the Montney formation represents a thick, over-pressured, liquids rich, hydrocarbon-charged zone with specific intervals exhibiting optimal porosity and permeability. In addition to the Upper Montney, the Lower Montney is now being successfully developed by several operators.

Cumberland considers the Upper Montney play to have been significantly de-risked over the past year through the drilling operations of other operators in the area. At Nig Creek, a competitor recently announced that its first two Upper Montney horizontal wells production tested at rates of 6.3 and 5.6 million cubic feet per day respectively, with total natural gas liquids content expected to be in excess of 30 barrels per million cubic feet.

Mr. Dan Allan, President and CEO of Cumberland stated that the joint venture enables Cumberland to participate in a high quality emerging liquids rich Montney natural gas project. "We are very pleased to have a large, well-capitalized partner participating with us in this play. It's a validation of the technical thesis we have been developing for the last year. This joint venture gives Cumberland significant exposure to a developing resource play with exceptional upside".

Reader Advisory

Forward Looking Statements

This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect', "anticipate", "continue", "estimate", "may", "will", "should", "believe", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this news release contains forward-looking information and statements pertaining to the following: anticipated drilling date of the test horizontal well; and future working interests.

Forward-looking statements or information are based on a number of material factors, expectations or assumptions of Cumberland which have been used to develop such statements and information but which may prove to be incorrect. Although Cumberland believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Cumberland can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: results from drilling and development activities consistent with past operations and offsetting wells; the Farmee's compliance and fulfillment of the terms of the Agreement; continued and timely development of infrastructure in areas of new production; availability of debt and equity financing and cash flow to fund Cumberland's current and future plans and expenditures; the impact of increasing competition; stability of the economic and political environment in which Cumberland operates; timely receipt of any required regulatory approvals; ability of Cumberland to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; ability of Cumberland to operate the field in a safe, efficient and effective manner; ability of Cumberland to obtain financing on acceptable terms; field production and decline rates; ability to replace and expand oil and gas reserves through acquisition, development and exploration; timing and cost of pipeline, storage and facility construction and expansion and the ability of Cumberland to secure product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes, and environmental matters in the jurisdictions in which Cumberland operates; and the ability of Cumberland to successfully market its oil and natural gas products.

The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation: an incorrect assessment of the farm out lands; failure to realize the anticipated benefits of the farm out lands and the transactions contemplated by the Agreement; changes in commodity prices; changes in the demand for or supply of Cumberland's products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans by Cumberland; inaccurate estimation of Cumberland's oil and gas reserve and resource volumes; limited or a lack of access to capital markets; increased costs; inadequate insurance coverage; impact of competitors and certain other risks detailed from time-to-time in Cumberland's public disclosure documents (including, without limitation, those risks identified in this news release and Cumberland's Annual Information Form).

The forward-looking information and statements contained in this news release speak only as of the date of this news release and Cumberland does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Contributing Sources

---

Market Wire