Connacher Oil and Gas Limited's Great Divide Pod One bitumen production surpasses 5,000 barrels per day



    CALGARY, Feb. 28 /CNW/ - Connacher Oil and Gas Limited (CLL-TSX)
announces today that its daily bitumen production rate at its Great Divide Pod
One steam-assisted gravity drainage ("SAGD") project has been ramping up and
has now surpassed 5,000 bbl/d. When combined with recent average daily
conventional production levels, Connacher is now producing approximately
7,500 boe/d of bitumen, crude oil and natural gas. This is approximately
triple the company's production level during 2007. Further increases are
anticipated, as the Pod One ramp up continues during upcoming months towards
the project's design level of 10,000 bbl/d and in the short run, as new Marten
Creek/Randall natural gas volumes of approximately 1,000 boe/d are brought
onstream as anticipated during March 2008. The company is delighted with the
production ramp-up seen at Great Divide and also with the ongoing production
optimization program on its conventional oil and gas properties.
    Readers are cautioned that all references to barrel of oil equivalent
("boe") are calculated on the basis of 6 mcf:1 bbl. Readers are also cautioned
that the conversion used in calculating barrels of oil equivalent is based on
an energy equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead. Furthermore, boes
may be misleading if used in isolation.
    At Great Divide Pod One, Connacher's SAGD project continues to exceed
expectations, as production builds throughout 2008 towards the project design
of 10,000 bbl/d of bitumen. Currently, 12 well pairs out of 15 well pairs have
been converted ("flipped over") to SAGD production, including several in
recent days. This would likely have occurred earlier in the month except for
brutal winter weather conditions in late January and early February 2008,
leading to the decision to delay the conversion of additional wells until more
normal conditions prevailed. It should be noted our dedicated operating staff
at Pod One were able to keep the facility operating during this period, when
other oil sands operations shut down.
    The company's cumulative bitumen production, which has primarily occurred
in the past seven weeks since steam injection commenced, now totals over
140,000 barrels. Performance indicators including temperatures, pressures,
steam oil ratios and individual well productivities continue to meet or exceed
our targets at this stage of production.
    Connacher's facility and its operating and marketing staff has been
handling the increased bitumen production and the subsequent sale of both raw
bitumen and diluted bitumen ("dilbit"). Connacher continues to truck its
bitumen and dilbit to various sales points and has been pleased with the
pricing and indicated netbacks available from the various market alternatives
it is accessing. Specific pricing is not being disclosed at this time for
competitive reasons.
    Our conventional oil and gas production has recently exceeded
2,600 boe/d. The anticipated March 2008 startup of our new Randall gas plant
and sales line, in the Marten Creek area, is expected to add another
1,000 boe/d to Connacher's conventional and overall production base.
    First quarter drilling operations have been very successful. Connacher
has drilled 18 gross (15 net) wells and is just completing the drilling of its
nineteenth and last well in its first quarter 2008 conventional program.
Results have been excellent; the company has cased for completion 16 gross
wells of the 18 gross wells drilled. Subject to planned completions being
successful, 13 of the 16 completed wells should be placed on production this
year. Cased wells include eight (7.5 net) development natural gas wells, four
(3 net) exploratory or outpost natural gas wells, two (one net) exploratory
oil wells, one (one net) development oil well and one (one net) water disposal
well.
    At Great Divide, Connacher is currently on well 92 of its 120-well oil
sands delineation and core hole well program. This program is designed to
identify additional reserves and resources, primarily on our main lease block
at Great Divide. The company has increased its rig complement from six to ten
drilling rigs in this program to ensure timely completion before March 31,
2008. Results of the program will be evaluated and interpreted over the next
several months; the company is encouraged by the results to date. Connacher's
seismic delineation and exploration program for 2008 is also nearing
completion and this data will be integrated with results of our core hole
program.
    The company's Algar application is proceeding in a normal course manner
through the regulatory process. Subject to the timing of regulatory approval,
Connacher is ready to commence its construction and drilling program this
summer. As previously reported, the financing for the construction of the
Algar facilities and related wells has already been arranged.

    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 information" within the meaning of such statements under
applicable securities law including: anticipated bitumen, crude oil and
natural gas production and sales rates and the timeline for the achievement of
anticipated production levels at Great Divide Pod One and Randall, anticipated
results from the current drilling program and, subject to regulatory approval,
the startup of construction at Algar. Forward-looking information is
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 information is 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 continuing ability to access
sufficient capital from external sources if required. Actual production levels
at Great Divide Pod One and Marten Creek/Randall and the timelines associated
therewith may vary from those anticipated in this news release and such
variations may be material. 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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