Connacher Oil and Gas Limited announces continued conversion to production and injection at Great Divide

    CALGARY, Jan. 10 /CNW/ - Connacher Oil and Gas Limited (CLL-TSX)
announces today that it continues its ramp up to 10,000 barrels per day of
bitumen production with the conversion of the two more horizontal
steam-assisted gravity drainage ("SAGD") well pairs to full time
production/injection at its Great Divide Pod One SAGD project ("Pod One"),
located approximately 50 miles south of Fort McMurray, Alberta. Three
additional well pairs are also currently in the process of being converted to
production. This will bring to six the total of converted well pairs out of
15 SAGD well pairs at Pod One.
    The project continues to perform well both with operation of the surface
facilities as well as in the reservoir and objectives continue to be met. Over
the next several weeks the remaining well pairs will be converted to full time
injection/production wells as the expected and targeted operating parameters
are met. This will continue into early first quarter 2008 until all well pairs
are converted to full-time steam injection and bitumen production. The project
production is exceeding expectations for January and is currently in excess of
1,000 barrels per day of bitumen, primarily from the three converted wells,
which are also ramping up to anticipated productive capacity with the passage
of time. This bitumen is blended with diluent currently supplied from the
company's refinery in Great Falls Montana and is sold into various markets. As
previously indicated, Connacher anticipates that Pod One production will ramp
up to 10,000 barrels per day of bitumen from all 15 well pairs later in 2008.
    Connacher has also commenced its 2008 core hole and seismic delineation
and exploration program in the oil sands and anticipates it will drill
120 core hole wells this winter using six rigs. These additional core holes
would give Connacher core hole control over approximately ten percent of its
oil sands acreage at Great Divide and Halfway Creek, Alberta. Over 300 core
holes were recently licensed by the company to enable operational flexibility.
    On its conventional side of the business, the company has commenced its
multi-well winter drilling program on its Randall property in the Marten Creek
natural gas production area in northern Alberta. Concurrent with this
drilling, the company has started construction of a six million cubic feet per
day Randall gas plant, gathering system and sales line that will result in the
tie-in of the discoveries made last winter at Randall. The project is slated
for completion at the end of first quarter. Logistics and planning for
Connacher's winter program were completed in third quarter 2007 and all rigs,
personnel, and equipment are in place. Subject to weather and other unforeseen
circumstances, this should enable completion of all of Connacher's anticipated
drilling and construction in the first quarter 2008.

    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 Information: This news release contains certain
"forward-looking information" within the meaning of such statements under
applicable securities law including: anticipated bitumen production and sales
rates and the timeline for the achievement of anticipated production levels at
Great Divide Pod One; anticipated completion of facilities and drilling at
Randall, Alberta and anticipated completion of a core hole program at Great
Divide and Halfway Creek, Alberta. 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 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 information.

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,,

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