Connacher Oil and Gas Provides Update on Proposed Recapitalization Transaction

CALGARY, Feb. 4, 2015 /CNW/ - On January 30, 2015 Connacher Oil and Gas Limited (CLL – TSX; "Connacher" or the "Company") announced a proposed recapitalization transaction (the "Recapitalization") aimed at significantly reducing the Company's debt and annual interest expense, and providing additional liquidity to fund ongoing operations. This Recapitalization has the committed support of holders of existing second lien secured notes (the "Existing Second Lien Notes") holding, on a combined basis, approximately 70% of the Existing Second Lien Notes and approximately 13% of the outstanding common shares (the "Consenting Holders"). As previously announced, under the terms of the proposed Recapitalization, and with the support of the Consenting Holders, any interest coming due and payable under the Existing Second Lien Notes will not be paid in cash, and the Existing Second Lien Notes, together with all accrued interest thereon, will be exchanged for common shares of the Company.

Connacher has received a letter from counsel to the Administrative Agent under the first lien term loan (the "First Lien Term Loan") claiming that an event of default has occurred and is continuing under the First Lien Term Loan as a result of the Company's failure to pay interest when due in respect of the Existing Second Lien Notes. Connacher disputes the letter on a number of bases, including that the Recapitalization is being conducted in accordance with the express terms of the First Lien Term Loan (which expressly permits a conversion of the Existing Second Lien Notes into equity as a "Permitted Second Lien Notes Restructuring" under the terms of the First Lien Term Loan) and that the Consenting Holders have agreed to that treatment of the interest due under the Existing Second Lien Notes under the terms of the proposed Recapitalization. As such, Connacher has responded that no event of default has occurred and that neither the Administrative Agent nor the lenders under the First Lien Term Loan have the right to exercise any rights or remedies under the Term First Lien Term Loan in respect of any purported event of default.

About Connacher
Connacher is a Calgary-based in-situ oil sands developer, producer and marketer of bitumen. The Company holds a 100 per cent interest in approximately 450 million barrels of proved and probable bitumen reserves and operates two steam assisted gravity drainage facilities located on the Company's Great Divide oil sands leases near Fort McMurray, Alberta.

Forward-Looking Information

Certain information regarding the Company contained herein constitutes forward-looking information and forward-looking statements (collectively, "forward-looking statements") under the meaning of applicable securities laws.  Forward-looking statements include estimates, plans, expectations, opinions, forecasts, projections, guidance, or other statements that are not statements of fact, including statements regarding the proposed Recapitalization and the Company's assessment of the claims of the Administrative Agent under the Term Loan. Although Connacher believes that the assumptions underlying, and expectations reflected in, such forward-looking statements are reasonable, it can give no assurance that such assumptions and expectations will prove to have been correct. There are many factors that could cause forward-looking statements not to be correct, including, but not limited to, risks and uncertainties inherent in the Company's business and risks and uncertainties associated with securing the necessary approvals to implement the Recapitalization.

The forward-looking statements contained herein are made as of the date of this news release solely for the purpose of generally disclosing Connacher's Recapitalization transaction. Connacher may, as considered necessary in the circumstances, update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise, but Connacher does not undertake to update this information at any particular time, except as required by law. Connacher cautions readers that the forward-looking statements may not be appropriate for purposes other than their intended purposes and that undue reliance should not be placed on any forward-looking statement. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement.

SOURCE Connacher Oil and Gas Limited

For further information: Chris Bloomer, Chief Executive Officer; Greg Pollard, Chief Financial Officer; Connacher Oil and Gas Limited, Phone: (403) 538-6201, Fax: (403) 538-6225, Suite 900, 332 - 6th Avenue SW, Calgary, Alberta T2P 0B2, inquiries@connacheroil.com, www.connacheroil.com

RELATED LINKS
http://www.connacheroil.com

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