CALGARY, ALBERTA--(Marketwire - May 24, 2012) - Cumberland Oil & Gas Ltd. (TSX VENTURE:COG) ("Cumberland" or the "Company") has filed its unaudited interim financial statements and related Management's Discussion and Analysis ("MD&A") for the three months ended March 31, 2012 (the "Quarter"). Copies of these documents may be obtained under Cumberland's SEDAR profile via the SEDAR website at [ www.sedar.com ] or through the Company's website at [ www.cumberlandltd.com ]

Highlights

• Averaged 92 boe per day of production, a 33% increase from the same period in 2011.
• Valhalla Doe Creek "M" Pool responding to water-flood, with average daily oil production for the Quarter of 51 bbls per day, a 122% increase from the same period in 2011.
• Upper Montney horizontal well at West Nig licensed and drilling rig contracted for summer 2012 drill.
• Positive working capital of $0.61 million at March 31, 2012.
• Initiated a process to identify strategic alternatives to enhance shareholder value.

Notes:

1. Funds used in operations is calculated as cash used in operating activities and adding changes in non-cash working capital, if any. Funds used in operations per share is calculated using the basic and diluted weighted-average number of shares for the period. Funds used in operations and funds used in operations per share are used to analyze Cumberland's operating performance. Funds used in operations and funds used in operations per share do not have standardized measures prescribed by Canadian Generally Accepted Accounting Principles ("GAAP") and therefore may not be comparable with calculations of similar measures for other companies.
   
   
2. Working capital includes current assets and current liabilities.

Note:

1. Operating netback equals oil and gas sales less royalties, operating expenses and transportation costs, calculated on a boe basis. Operating netback does not have a standardized measure prescribed by GAAP and therefore may not be comparable with the calculation of similar measures for other companies.

NE British Columbia Montney Update

In December 2011, Cumberland reported that it had entered into a farm-out and joint venture agreement covering its 1,128 hectares at West Nig, British Columbia. The proposed earning well, HZ W NIG b-97-K/94-A-13 (the "Earning Well") has been licensed and plans are underway to commence operations in late June 2012, weather permitting. A drilling rig has been secured and will be available in that time frame.

The proposed well site will be constructed to allow for upwards of eight horizontal wells from this central location. Four of these potential wells would traverse Cumberland lands. The Earning Well plans to target the Triassic Upper Montney at a true vertical depth of approximately 1,760 metres and the horizontal well trajectory will be approximately 2,200 metres in length. This length will accommodate numerous fracturing stages which should adequately evaluate the potential from this zone. Drilling operations are expected to take upwards of three weeks with plans to conduct the completion and production testing immediately thereafter.

The Upper Montney in this area is believed to be over-pressured with very attractive liquids content. Both the Upper and Lower Montney zones have now been successfully completed by other operators in this area with very encouraging results. Due to the high liquids content in this specific area, this project remains economically viable at current natural gas prices.

READER ADVISORIES

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: the volumes and estimated value of Cumberland's oil and gas reserves; anticipated production volumes from the Valhalla Doe Creek "M" pool (the "Pool") with continued water-flood activities; the drilling of a horizontal well at West Nig during the year; including plans to commence drilling operations on the Earning Well, the anticipated timing of the commencement of drilling operations on the Earning Well, the depth and trajectory of the Earning Well, the total estimated time to drill, complete and production test the Earning Well, the belief of the presence of liquids rich natural gas in the Upper Montney formation and the anticipated economics of the area due to the anticipated presence of liquids rich natural gas in the area; anticipated operational activities; the sources of funding for certain of the Company's future operations; the volume and product mix of Cumberland's production; future oil and natural gas prices; future liquidity and financial capacity; the total future capital associated with development of reserves and resources; future operating costs, royalty rates and exchange rates.

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 effect of water-flood activities at the Pool; continued and timely development of infrastructure in areas of new production; joint venture partner activities, including fulfilling its commitment to drill the Earning Well; 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 the operator of the projects in which Cumberland has an interest in to operate the field in a safe, efficient and effective manner; ability of Cumberland to obtain financing on acceptable terms; the potential effects of Cumberland's strategic alternatives process on its current plans and operations; 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; 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 of Cumberland or by third party operators of Cumberland's properties, default of third parties of contractual commitments; 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.

BOE Equivalent

Boe's may be misleading, particularly if used in isolation. A boe conversion of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion ratio of 6:1 may be a misleading indication of value.

Contributing Sources

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