Connacher To Commission Great Divide Pod One SAGD Oil Sands Processing Plant



    CALGARY, Aug. 2 /CNW/ - On Friday, August 10th, 2007, Connacher Oil and
Gas Limited (CLL-TSX) will celebrate the completion of construction at "Pod
One", a 10,000 barrel-a-day oil sands processing plant at its Great Divide
project, located approximately 80 kilometers south of Fort McMurray on Highway
63.
    Joining company executives and its Board of Directors at the official
on-site commissioning will be representatives from government, the investment
community, service providers and company employees.
    "It's a Plant Commissioning Celebration," says President and Chief
Executive Officer, Richard Gusella. "Any time a small Canadian-owned company
can complete a $290 million dollar project that's going to produce 10,000
barrels-a-day for 25 years with about 100 million barrels coming out of the
ground, it's cause for celebration."

    Unique Oil Sands Positioning

    Connacher's oil sands plan began in 2004 with its purchase of oil sands
leases just south of Fort McMurray. The plant commissioning represents more
than a typical oil sands startup.
    Despite Connacher's significant growth as a company from under $1 million
to over $1 billion in enterprise value in the past six years, "We're 'a little
guy' in the oil sands," Gusella explains. "You don't have to be a giant
resource company to be a successful player here. If a smaller company has a
focused business plan, dedicated, talented employees and an exciting vision,
it can play in the big boys' game and target an excellent return for its
shareholders."
    From a 2001 start with only 50 bbl/d of foreign production, Connacher now
owns broadly-based and diversified assets, including its extensive and
considerable oil sands reserves, resources and undeveloped leases, a
2,500 boe/d conventional production base in western Canada, a valuable $250
million equity stake in Petrolifera Petroleum (active in South America) and an
operating 9,500 barrel-a-day refinery in Great Falls, Montana. These assets
are all important elements of Connacher's integrated approach to managing the
operating and financial risks associated with the oil sands.

    SAGD Operation

    The Great Divide Pod One plant constitutes a significant part of the 
$290 million invested to date in the company's initial Steam Assisted Gravity
Drainage (SAGD) operation. The facility is designed to generate the steam to
be injected into the nearby reservoir to free up the bitumen.
    The original water supply for the steam is from the subsurface and is
non-potable. Connacher will treat this water, make steam and inject it into
the subsurface. A mixture of hot oil and hot water will then flow to the
surface. Inside the plant, the two components are separated. Oil is prepared
for blending and transport. The recovered water is purified and recycled for
repeated use in the plant's steam generators. The water recycle rate is
targeted at 98%.

    Pod One Just The Beginning

    "We're not here just to build one oil sands plant," Gusella says. "We
anticipate expanding our oil sands operation in the longer term." The company
has already begun the application process for regulatory approval to proceed
with its second 10,000 barrel-a-day project, to be located ten kilometers east
of Pod One at Algar. "It's also our intention to build a $100 million pipeline
to take our oil from our area down to the nearest connections," Gusella says.
"It'll eventually handle about 50,000 barrels a day, our stated objective over
the next five to seven years, as well as approximately 20,000 barrels-a-day of
diluent in a parallel line. Lockstep, we are also planning to expand our
refining capacity. This would be consistent with the company's integrated
approach to oil sands development and its emphasis on reliability,
expandability, repeatability, sustainability and the efficiencies of smaller
scale modular operations."

    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's 26 percent equity stake in Petrolifera Petroleum
Limited (PDP - TSX) has a current market value exceeding $250 million.
Petrolifera has interests in Argentina, Peru and Colombia. Connacher also owns
a profitable 9,500 bbl/d oil refinery in Great Falls, Montana, acquired as
part of the company's integrated oil sands strategy.

    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, the life of
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 to the future and other 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
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. Readers are also cautioned
that the conversion used in calculating barrels of oil equivalent (6 mcf:1
barrel) 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.





For further information:

For further information: Richard 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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