Connacher Oil and Gas Limited files an application for 10,000 bbl/d Algar SAGD Oil Sands Project



    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES/

    CALGARY, June 19 /CNW/ - Connacher Oil and Gas Limited (CLL - TSX)
announced today that its 100 percent-owned subsidiary, Great Divide Oil
Corporation ("GDOC"), has submitted an application to the Alberta Energy and
Utilities Board (EUB) and Alberta Environment for the Algar Oil Sands Project
("Algar" or "Algar Project"). Upon approval, this will be Connacher's second
10,000 bbl/d steam-assisted gravity drainage ("SAGD") oil sands project, the
first being Great Divide Pod One, which is scheduled for an August 2007
commissioning.
    GDOC is proposing to develop the Algar resources using SAGD, which is a
proven technology that involves drilling horizontal wells and constructing a
processing facility that separates oil and water, generates steam and recycles
water. It is expected the Algar accumulation which is to be developed will
produce up to 1,600 m(3)/d (10,000 bbl/d) of bitumen over a design life of
25 years. Accordingly, this proposed SAGD operation is estimated to recover
about 13 million m(3) (83 million barrels) of bitumen. Subject to receipt of
approvals from the EUB, Alberta Environment and Alberta Sustainable Resource
Development, start-up of construction would be anticipated to occur prior to
mid-year 2008. Produced bitumen will be diluted and delivered to a third-party
pipeline for shipment to refinery markets in Canada and the United States
commencing in 2009.
    Engineering and construction of the Algar Project will provide an
estimated 500 - 600 person-years of total direct, indirect and induced
employment in the province during the construction phase while ongoing project
operations should generate 60 to 70 person-years of annual employment. Over
the life of the Algar Project, a very significant royalty will also be payable
to the Province of Alberta.
    Connacher has already initiated a public consultation process to seek
ideas and feedback from the stakeholders in the area.

    Connacher is a Calgary-based crude oil and natural gas exploration and
production company. Its principal asset is its 100 percent interest in
95,000 acres of reserves, resources and lands in the Divide region of
Alberta's oil sands. Connacher also has conventional crude oil and natural gas
properties and production in Alberta and Saskatchewan, owns a 9,500 bbl/d
refinery in Great Falls, Montana and owns a 26 percent equity interest in
Petrolifera Petroleum Limited, which investment has a current market value of
approximately $225 million.

    Forward-Looking Statements: This press release contains certain
"forward-looking statements" within the meaning of such statements under
applicable securities law including, the planned development of the Algar
Project, anticipated bitumen recovery and employment rates from the Algar
Project and forecast timing for commencement of construction. Forward-looking
statements are frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate", "may", "will",
"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, the uncertainties
involved in interpreting drilling results and other geological data,
fluctuating oil prices, the possibility of project cost overruns or
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, approvals and the ability to access sufficient capital from
external sources. Development of the Algar Project is subject to receipt of
all necessary regulatory and stakeholder approvals, the timing of which is
uncertain. Additionally, such approvals may impose conditions which may or may
not be acceptable to Connacher. 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, Phone: (403) 538-6201, Fax: (403) 538-6225, Website:
www.connacheroil.com, Email: inquiries@connacheroil.com


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890