Connacher commences steam injection at its Great Divide Pod One oil sands project

    CALGARY, Sept. 17 /CNW/ - Connacher Oil and Gas Limited (CLL - TSX)
announces today that it has commenced the sequential injection of steam into
the fifteen steam-assisted gravity drainage ("SAGD") well pairs at Great
Divide Pod One, the company's first 10,000 barrels per day oil sands project
located approximately 50 miles south of Fort McMurray, Alberta.
    The company has now completed the full commissioning of its processing
and steam generating plant. As planned, this was a thirty day process that
occurred without any major complications. Concurrently, all of the company's
fifteen SAGD well pairs were prepared to accept steam and circulation of steam
in the injector and producer well bores is accordingly underway.
    Connacher plans to steam the wells for approximately ninety days prior to
the planned startup of production. The process will be closely monitored to
determine the optimum startup date based on individual well response.
    "This is a defining moment for Connacher," said Richard Gusella,
President and Chief Executive Officer. "With the startup of steaming, we have
fulfilled our undertaking to our shareholders, lenders and other stakeholders.
In less than four years, a very short period of time for the oil sands, we
transformed undeveloped acreage into an operating facility that should shortly
see ramped up production, resulting in significant growth to our revenue, cash
flow and earnings. We are already looking ahead to our second 10,000 barrels
per day oil sands project at Algar (the "Algar Project"), which awaits
regulatory approval. We will continue to systematically evaluate our
considerable, well-positioned acreage in the Divide region which we believe
can provide the basis for sustained and considerable future growth for our
    Peter Sametz, Executive Vice President and Chief Operating Officer,
stated "We are rightly proud of our accomplishment with the startup of
steaming at Great Divide Pod One. Congratulations are extended to our
management and staff, our consultants, advisors and staff who comprised the
construction and commissioning team, to the service sector and to the trades
who supported our initiatives. Our state of the art facility can process
bitumen, generate steam, clean up and recycle water and house our permanent
staff. It was constructed and placed in operation in record time and our next
milestone will be to start producing bitumen for sale into the market.
Thereafter, we hope to ramp up to capacity at 10,000 barrels per day as
expeditiously as possible. This will result in long-life sustainable revenue
and cash flow for Connacher, given our solid reserve backing. As the facility
is turned over to our permanent operating personnel, we look forward to the
future with confidence and with the expectation of a smooth transition from
the construction phase."

    Connacher Oil and Gas Limited is a Calgary-based crude and natural gas
exploration, development and production company. The company's principal asset
is its extensive reserve, resource and acreage position in the oil sands of
Alberta. In addition, Connacher owns considerable conventional resources in
the Marten Creek, Three Hills and Battrum regions of western Canada; 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

    Forward-Looking Statements: This news release contains certain
"forward-looking statements" within the meaning of such statements under
applicable securities law including: anticipated bitumen recovery, anticipated
bitumen production rates, the planned transition from construction to
operations at Great Divide Pod One and the planned development of the Algar
Project. 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, start-up, approvals and the ability to access sufficient capital
from external sources. Development of the Algar Project is subject to the
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 Gusella, President and Chief Executive
Officer, Connacher Oil and Gas Limited, Phone (403) 538-6201, Fax (403)

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