Cabo Drilling Signs Letter Of Intent To Form Strategic Alliance In The USA

VANCOUVER BC, U.S.A. -- (Marketwire) -- 01/31/11 --

Cabo Drilling Corp. /
CABO DRILLING SIGNS LETTER OF INTENT TO FORM STRATEGIC ALLIANCE IN THE USA
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North Vancouver, BC - Cabo Drilling Corp. (TSX-V: CBE) ('Cabo' or the
'Company')
announces that Diamond Drilling Consultants, LLC ('Diamond Drilling') and
Cabo
have signed a Letter of Intent and Term Sheet toward creating a strategic
joint
venture relationship to facilitate and conduct diamond core drilling and
other
specialized drilling operations in the United States of America.

Under provisions of the strategic alliance, Cabo Drilling (Nevada) Inc.
('Cabo
Nevada'), a company to be owned 50% each by Cabo and Diamond Drilling,,
will
provide specialized equipment, tools and consumables for the operation,
project
management and administration of drilling services in the USA. The parties
agree
to place a very high emphasis on safety and sound environmental practices,
using
policies and procedures developed by them over the past 15 years.

Diamond Drilling will facilitate bidding, job procurement and
employee
recruitment and assist with project management and overall project
coordination,
in addition to providing both public relations and client relations
services
with respect to the drilling projects in the USA.

Collaborative efforts from both, Cabo and Diamond Drilling will
consist of
equipment and drill technology, technical assistance with respect to
drilling
techniques and drill equipment requirements. These combined efforts will
enable
the joint venture to quickly access the USA marketplace and work
towards
ensuring that all potential USA customers' needs are met.

'We are pleased to combine our resources with those of Diamond
Drilling
Consultants, LLC whose principals, Doug Kettle and Dave Deeds, have
decades of
experience and extensive insight into the USA mineral resource
industry, the
potential customer base and USA drilling requirements,' stated John
Versfelt,
Cabo Drilling's President and CEO. 'The combination of the Cabo
management,
equipment, technology and administration capability brought alongside
Diamond
Drilling's USA knowledge is a compelling blend for Cabo's initial
steps in
establishing a significant and ongoing presence in the USA drilling
services
market.'

Stock Option Grant

The Company also announces the granting of a total of 400,000 incentive
stock
options to new employees and consultants. Subject to the acceptance of
the TSX
Venture Exchange, 200,000 stock options are exercisable at $0.225 per
share and
200,000 stock options are exercisable at $0.25 per share for a period of
up to
two years.

About Cabo Drilling Corp.

Cabo Drilling Corp. is a drilling services company headquartered in
North
Vancouver, British Columbia, Canada. The Company provides mining
related and
specialty drilling services through its Canadian divisions in Surrey,
British
Columbia; Montréal, Quebec; Kirkland Lake, Ontario; and
Springdale,
Newfoundland; as well as; Cabo Drilling (Panama) Corp. of Panama,
Republic of
Panama; Cabo Drilling Spain S.L. of Sevilla, Spain; Balkan States
Drilling
SH.P.K. of Tirana, Albania; and Cabo Drilling (International) Inc.
The
Company's common shares trade on the Frankfurt Exchange under the
symbol: DHL
and on the TSX Venture Exchange under the symbol: CBE.

ON BEHALF OF THE BOARD

'John A. Versfelt'

John A. Versfelt

Chairman, President and CEO

Further information about the Company can be found on the Cabo
website
(http://www.cabo.ca) and SEDAR (www.sedar.com) or by contacting Sheri
Barton,
Corporate Communications at 403-217-5830 or Mr. John A. Versfelt,
Chairman,
President & CEO of the Company at 604-984-8894. For general investor
relation
inquiries you may also contact Renmark Financial Communications Inc.
Barbara
Komorowski: bkomorowski@renmarkfinancial.com or Arash
Shahi:
ashahi@renmarkfinancial.com at Tel: 514-939-3989 or 416-644-2020.

* * * *

The TSX Venture Exchange does not accept responsibility for the
adequacy or
accuracy of this release. This news release may contain forward-
looking
statements including but not limited to comments regarding the
timing and
content of upcoming work programs, geological interpretations, potential
mineral
recovery processes and other business transactions timing. Forward-
looking
statements address future events and conditions and therefore, involve
inherent
risks and uncertainties. Actual results may differ materially from
those
currently anticipated in such statements.

--- End of Message ---

Cabo Drilling Corp.

3rd Floor, 120 Lonsdale Avenue North Vancouver BC Canada

Listed: Open Market (Freiverkehr) in Frankfurter Wertpapierbörse;

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Source: Cabo Drilling Corp. via Thomson Reuters ONE

[HUG#1483816]

CONTACT:

John A. Versfelt

Chairman, President and CEO

Telephone: (604) 984-8894

Facsimile: (604) 983-8056

e-mail:ir@cabo.ca

website: www.cabo.ca