CALGARY, ALBERTA--(Marketwire - July 29, 2010) - Compass Petroleum Ltd. ("Compass" or the "Corporation") (TSX VENTURE:CPO) is pleased to provide an update concerning its Viking light oil horizontal drilling program at the Lucky Hills property in the Dodsland area of west central Saskatchewan.

Certain statements in this news release constitute forward-looking statements, including statements respecting the anticipated drilling and completion of various Viking horizontal wells at Lucky Hills and statements concerning anticipated production of oil and gas at future times. Readers should refer to the cautionary statement concerning forward-looking information that appears at the end of this news release.

The Corporation drilled and cased its first two (2.0 net) horizontal wells on this play in May 2010. Both wells were drilled as monobores with an average horizontal length of 640 meters. Due to unusually wet weather conditions, only one of these wells was fractured and completed in June. The second well was fractured and completed in mid-July.

The first well has been on production test and flowing (without the aid of a pumping unit) since June 27, 2010. The average production rate for this well for the 30 day period ended July 26, 2010 was approximately 58 barrels per day of Viking light sweet crude oil, excluding associated solution gas. The second well commenced flowing on production test on July 23, 2010.

Compass owns and operates a 100% gas processing and compression facility at Lucky Hills, including an extensive gas gathering system, which allows for solution gas produced from oil wells in the area to be tied in and conserved.

The Corporation commenced drilling operations on the next four wells in its Viking horizontal program on July 9, 2010. Two of these wells have now been drilled and cased, the third well is drilling and the fourth is expected to finish drilling in the first half of August 2010. Completion operations on the first two wells commenced earlier this week. The last two wells are expected to be completed in mid-August, weather permitting.

A fall 2010 round of Viking horizontal drilling is scheduled to commence in late September.

The board of directors of Compass has approved a fiscal 2011 capital budget, which authorizes aggregate expenditures of approximately $29.555 million, with approximately $23 million allocated to the drilling of up to 19 Viking horizontal wells on the Corporation's Lucky Hills property by June 2011. The capital budget currently anticipates that Compass will exit calendar 2010 (December) at between 1,100 to 1,200 barrels of oil equivalent per day of production and will exit fiscal 2011 (June) at between 1,500 to 1,600 barrels of oil equivalent per day of production.

In May 2010, the Corporation's wholly-owned subsidiary, Compass Petroleum Corp., raised $10.6 million through a private placement undertaken with the assistance of Raymond James. The Corporation agreed that the net proceeds from the financing would be used primarily to pursue the Viking horizontal light crude oil play in southwestern Saskatchewan and for general corporate purposes.

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Barrels of Oil Equivalent (boe). The term "boe" means barrel of oil equivalent, with natural gas converted to a crude oil equivalent at a ratio of six thousand cubic feet to one barrel. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of six Mcf (six thousand cubic feet) to one bbl (one barrel) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Forward-looking statements. This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes. In particular, this news release contains forward-looking statements relating to anticipated drilling and completion of various Viking horizontal wells at Lucky Hills and forward-looking statements concerning anticipated production of oil and gas at future times.

By their very nature, forward-looking statements involve inherent risks and uncertainties (both general and specific). Undue reliance should not be placed on forward-looking statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations, estimates and intentions expressed in the forward-looking statements.

Forward-looking statements respecting the drilling and completion of Viking horizontal wells at Lucky Hills are based upon the assumptions that: (i) there will be no material changes in economic and operating conditions, environmental legislation, the ability to access materials and skilled labour and weather conditions, (ii) the geological and geophysical data collected by the Corporation and the Corporation's interpretation of that data are accurate, and (iii) the Corporation will not encounter various inherent risks associated with the exploration and development of oil and gas properties (including mechanical problems, operating issues, and unforeseen engineering, environmental or geological problems) in the drilling of the wells. The forward-looking information respecting the drilling and completion of Viking horizontal wells at Lucky Hills is also based upon the results of horizontal wells drilled to date, the time required to drill and complete existing wells, the Corporation's experience with the drilling of other oil and gas wells, the ability to obtain all required regulatory approvals on a timely basis and on satisfactory terms and no new laws and regulations that would materially affect operations. Such forward-looking statements are subject to certain risks, including the risks that unexpected changes in economic or operating conditions or commodity prices, changes to environmental legislation, adverse weather conditions, or the ability to access materials and skilled labour will materially affect the ability of the Corporation to drill and complete the wells, and competition from other oil and gas companies.

Forward-looking information concerning anticipated production of oil and gas at future times, is based upon the Corporation's current production from its various properties, existing plans for the drilling of future wells, the accuracy of geological and geophysical data and the Corporation's interpretation of that data, the Corporation's historical success rate with wells drilled on its oil and gas properties, the results of wells drilled by the Corporation to date at the Lucky Hills property and production from those wells, the results of wells drilled by third parties in the vicinity of the Corporation's oil and gas properties, that production from new wells will be substantially similar to production rates associated with existing wells in the vicinity of the Corporation's oil and gas properties, prices for oil and natural gas remaining at current levels or increasing above current levels, the availability of capital on acceptable terms and no adverse changes in applicable. Such forward-looking statements are subject to certain risks, including the risks that the Corporation is not able to economically produce oil and gas from its properties, delays in the Corporation's drilling program (including as a result of weather conditions or the availability of equipment and skilled labor), new wells not producing at rates consistent with existing wells in the vicinity of the Corporation's oil and gas properties (or not being capable of commercial production at all), an escalation in the costs associated with drilling and completion activities, decreases in commodity prices (which could, among other things, result in the shut-in of production or a decision to defer or cancel all or a portion of the Corporation's drilling program). The Corporation's ability to achieve the results anticipated by such forward-looking statements is also subject to various inherent risks associated with the exploration and development of oil and gas properties (including mechanical problems, operating issues, production delays, and unforeseen engineering, environmental or geological problems), the ability to obtain all required regulatory approvals on a timely basis and on satisfactory terms and no new laws and regulations that would materially affect operations.

The forward-looking statements contained in this news release are made as of the date hereof and the Corporation does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable Canadian securities law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.