Canadian Overseas Petroleum Signs Farm-in Agreement

CALGARY, Dec. 6 /CNW/ - Canadian Overseas Petroleum Limited ("COPL" or the "Company") (TSX-V: XOP), has signed a farm-in agreement with Faroe Petroleum plc for Blocks 206/5a and 206/10a, License P.1161, which include the Freya discovery and the Fulla exploration prospect. 

Under the terms of the agreement, COPL will pay 60% of the costs to drill an exploration well in the Fulla prospect to earn a 50% equity interest in both blocks.  The well is expected to be drilled in 2011. 

Blocks 206/5a and 206/10a are located approximately 10 kilometers northeast of the Clair field which has recently been producing between 30,000 to 49,000 barrels of oil per day.  Both Fulla and Freya appear to have similar seismic and geological characteristics to the Clair field.

The farm-in represents partial satisfaction of the first Release Condition for the Company's recently closed $130 million offering of subscription receipts.  The completion to the farm-in is dependent upon the total satisfaction of the first Release Condition of escrowed funds, certain conditions precedent and regulatory approvals.

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 Venture Exchange.

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 listing of the Subscription Receipts, use of proceeds of the Offering, 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]