Connacher Oil and Gas Limited announces first sale of bitumen from Great Divide



    CALGARY, Oct. 22 /CNW/ - Connacher Oil and Gas Limited (CLL-TSX)
announces today that it has delivered and sold to market its first truckload
of diluted bitumen ("dilbit") from its Great Divide Pod One SAGD project,
located approximately 50 miles south of Fort McMurray, Alberta. The project is
still circulating steam into all 30 wells (15 well pairs) as part of its
90 day circulation and reservoir pre-heating phase; however, as a byproduct of
this process, the company is producing and recovering small but significant
amounts of bitumen at surface. This past week the project averaged 300 barrels
per day of bitumen production. The bitumen has been mixed with diluent and
stored as sales "dilbit" and as storage volumes are being filled, it is now
advisable to truck volumes to market. It should be noted that while the
bitumen volumes are important and demonstrate that operationally this
circulation phase is proceeding as planned, the volumes of bitumen produced
are incidental to the circulation process. They are, however, suggestive of
even pre-heating in the horizontal wellbores, which is also indicated by the
company's downhole monitoring equipment. After the preheating or circulation
phase is completed, the 15 lower horizontal wells of each well pair will be
converted to production with the cessation of steam circulation in those
wells. This is expected to occur in late fourth quarter 2007, after which it
is anticipated production will ramp-up to 10,000 barrels per day of bitumen in
2008.
    Given the results of the past few weeks, it is now anticipated that
during this circulation phase one to two trucks per day will be delivering
dilbit to various sales terminals to both maximize price and introduce the
Great Divide bitumen to prospective purchasers for blending to various heavy
oil streams. It is also anticipated that the company will haul dilbit to its
Montana Refining Company Inc.'s (MRCI) refinery in Great Falls, Montana and
backhaul naphtha from the refinery to Great Divide to be used as diluent. This
delivery of Great Divide dilbit will allow MRCI's analytical personnel to
analyze and assay the Great Divide dilbit for the various characteristics
important to refiners. It is anticipated this will aid in the future marketing
of this crude. It should be noted that the prices paid for this dilbit will be
in accordance with prices as posted by various independent purchasers and the
related party transactions will be fully transparent for the calculation of
royalties.
    One of the benefits of Connacher's integrated oil sands strategy is that
the company is now able to anticipate self-sufficiency in diluent supply until
approximately March 2008, as excess naphtha from MRCI's refining process is
now being physically swapped in the Edmonton market for diluent, with the
naphtha being transported by rail from the refinery in Great Falls. This
results in a value-added solution for both the company's Great Divide project
and its Montana refinery.

    Connacher Oil and Gas Limited is a Calgary-based Canadian oil and natural
gas exploration, development and production company. The company's principal
assets are its significant bitumen reserves and resources and its 100 percent
interest in approximately 95,000 acres of oil sands leases in the Great Divide
region near Fort McMurray, Alberta. It also owns conventional production and
reserves at Marten Creek and Three Hills, Alberta and at Battrum,
Saskatchewan. Connacher owns and operates a 9,500 barrel per day refinery in
Great Falls, Montana and maintains a valuable 26 percent equity stake in
Petrolifera Petroleum Limited (PDP - TSX), a public company active in
Argentina, Colombia and Peru in South America.

    Forward-Looking Statements: This news release contains certain
"forward-looking statements" within the meaning of such statements under
applicable securities law including: anticipated bitumen production and sales
rates and the timeline for ramp up of production at Great Divide Pod One.
Forward-looking statements are frequently characterized by words such as
"plan", expect", "project", "intend", "believe", anticipate", estimate",
"may", "potential", "proposed' and other similar words, or statements that
certain events or conditions" may" or "will" occur. These statements are only
predictions. Forward-looking statements are based on the opinions and
estimates of management at the date the statements are made, and are subject
to a variety of risks and uncertainties and other factors that could cause
actual events or results to differ materially from those projected in the
forward-looking statements. These factors include the inherent risks involved
in the exploration and development of oil sands properties, difficulties or
delays in start-up operations, the uncertainties involved in interpreting
drilling results and other geological data, fluctuating oil prices, the
possibility of unanticipated costs and expenses, uncertainties relating to the
availability and costs of financing needed in the future and other factors
including unforeseen delays. As an oil sands enterprise in the development
stage, Connacher faces risks including those associated with exploration,
development, start-up, approvals and the ability to access sufficient capital
from external sources. For a description of the risks and uncertainties facing
Connacher and its business and affairs, readers should refer to Connacher's
Annual Information Form for the year ended December 31, 2006. Connacher
undertakes no obligation to update forward-looking statements if circumstances
or management's estimates or opinions should change, unless required by law.
The reader is cautioned not to place undue reliance on forward-looking
statements.





For further information:

For further information: Richard A. Gusella, President and Chief
Executive Officer, Connacher Oil and Gas Limited, Phone: (403) 538-6201, Fax:
(403) 538-6225, www.connacheroil.com, inquiries@connacheroil.com


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