Montello Resources Ltd. (TSX Venture Exchange Symbol: MEO) and JV Partner Austin Developments Ltd. (TSX Venture Exchange Symbol: AUL), are pleased to announce that a drilling contract has been signed with Houston Texas based Nabors Drilling USA. Nabors is one of the largest contract drillers in the lower 48 states.

Mobilization to Morgan Highpoint has commenced with the loading and transporting of up to 50 truck loads of equipment which includes a triple rig. All pre-drilling preparations have now been completed at Morgan Highpoint. The Rat-Hole was finished late last week. Montello believes that mobilization and set up can be completed in less (10) ten days. Spud date would then follow.

Final banking and credit facilities were completed in mid July. Equipment is now showing up on location. Please refer to new pictures posted as well as others to follow at www.montello.com.

About our Drilling Contractor: Nabors Drilling USA is a business unit of Nabors Industries Inc. (NYSE Symbol: NBR) www.nabors.com. The Parent company is one of the biggest drilling contractors worldwide. See their website www.nabors.com and look under Business Units. "The Company has built up its operating fleet to about 500 land drilling rigs" Nabors USA has the expertise that we require.

Effective today's date August 1st, Randy Marshall is stepping down as a member of Montello's Board of Directors and as COO and Vice President of Production, Operations and Engineering. Randy helped to play an integral role in the reorganization of Montello since coming aboard in 2006. With Randy's input, our Acting Controller just recently cleared up approx $180,000 in Canadian Operations Accounts Receivable. He has also been assisting with the finalizing an engineering update by Chapman Engineering of Calgary, Alberta on our Canadian Assets, especially at Mulligan, NW Alberta.

Lastly, Randy just successfully concluded the Alberta Energy Utility Board (AEUB) Approval Process for a water injection scheme into the 6-23-81-8W6M well to enhance oil production in the Charlie Lake Formation at Mulligan. Chapman's detailed Engineering Report will be released soon. Montello wishes Randy Marshall all the best in his future endeavors.

ON BEHALF OF MONTELLO RESOURCES LTD.

"William R. Cawker"
William R. (Bill) Cawker
President-CEO-Chairman
Montello Resources Ltd.

About Montello

Montello Resources Ltd. (TSX-V: MEO), a publicly traded company listed on the TSX Venture Exchange, is engaged in high impact oil and gas exploration in Northern Eastern Tennessee. The Company is also engaged in exploration and secondary recovery operations in Alberta. The Company's goal is to conduct a multi well drilling program this summer onwards in our two core areas of interest. Montello is utilizing the latest in modern techniques on its Morgan County, Tennessee leases, in a part of the state where a limited number of deep tests have been drilled from the late 1960's through to the early 1980's.

For further information please contact: Larry Myles at lmyles@montello.com weekdays at 604-408-7600 from 7: 00 am PST until 3:00 pm PST. Please refer to our web site www.montello.com for ongoing updates and have your name included on our mailing list. Please cc your email to Larry Myles also to bcawker@montello.com re: questions.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.