Canadian Overseas Petroleum Automatic Exercise of 30% of Subscription
Receipts is Effective Immediately

/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./

CALGARY, Dec. 10 /CNW/ - Canadian Overseas Petroleum Limited ("COPL" or the "Company") (TSX-V: XOP) announced on December 9, 2010 that, as a consequence of entering into two farm-in agreements, 78 million subscription receipts (30% of COPL's prospectus offering of 260 million subscription receipts that closed on December 1) were automatically exercised into common shares and warrants after the close of trading on December 9, 2010.  Each subscription receipt entitles the holder to one (1) common share and one-half of one (0.5) common share purchase warrant. 

Trades of subscription receipts on December 7, 8 and 9 will settle on December 10, 13 and 14, respectively, by delivery of the number of subscription receipts remaining after automatic exercise of 30% of those subscription receipts plus the common shares and warrants issued on the automatic exercise of 30% of those subscription receipts.  For example, a trade on December 7, 2010 of 100 subscription receipts will settle on December 10, 2010 by delivery of 70 subscription receipts, 30 common shares and 15 warrants.

The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to a U.S. person absent an exemption from the registration requirements of such Act.

About the Company

COPL's Common Shares are listed under the symbol "XOP", and the Subscription Receipts under the symbol "XOP.R", both of which trade on the TSX-V.

Forward Looking Statements 

This press release may contain forward-looking statements based on COPL's current expectations and assumptions as to a number of factors including access to capital, regulatory approvals, intended acquisitions and general economic and industry conditions.  If those expectations and assumptions prove to be incorrect, or factors change, then actual results could differ materially from the forward-looking statements contained in this press release.

Generally, statements included in this press release that address activities, events or developments that COPL expects, believes or anticipates will or may occur in the future are forward-looking statements.  Such forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond COPL's control, including: the impact of general economic conditions in the areas in which COPL operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities.  In addition there are risks and uncertainties associated with the oil and gas industry, therefore COPL's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amounts of proceeds, which COPL will derive therefrom.  Such statements are based on assumptions made by COPL based on its experience perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information:

Mr. Arthur Millholland, President and CEO

Phone: [phone]

Or,

Rob Elgie, Manager of Investor Relations

Phone: [phone]