Circle Energy announces joint venture.

CALGARY, ALBERTA--(BUSINESS WIRE)--Dec. 4, 1995--CIRCLE ENERGY INC. (Alberta Stock Exchange:CEN) Bill Baker, President of Circle Energy Inc. ("Circle") announced today that the company has reached agreement in principle with United Compass Resources Ltd. ("Compass" - Vancouver Stock Exchange Symbol "UCR-V") to form a strategic association for the pursuit of oil and gas joint venture opportunities.

Initially Circle will participate with Compass for up to 50 percent of the interest of Compass in its ongoing southeast Saskatchewan joint venture to earn up to a 50 percent interest in approximately 60,000 acres of oil and gas leases. Circle and Compass would earn a 50 percent interest in wells drilled and 25 percent interest in all leases by spending $2,100,000 during a Phase I program of development drilling, some seismic and additional land acquisition. At the end of Phase I, Circle and Compass will have the option to earn a further 25 percent interest in all the leases and a 50 percent interest in wells drilled by spending $2,200,000 to expand production by further development and exploration drilling.

Baker stated that Circle is very pleased to have a strategic alliance with Compass. It has always been Circle's objective to participate in a long term investment with unlimited opportunity for ongoing oil and gas development. Mark Oliver, who has worked with Circle for over a year, will provide the geological expertise and leadership to manage this project on behalf of Circle and Compass. -0- EDITOR'S NOTE: The Alberta Stock Exchange has neither approved nor disapproved of the information contained in this press release.

CONTACT: Bill Baker, [phone]