/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES/

    CALGARY, May 9 /CNW/ - Connacher Oil and Gas Limited (TSX: CLL)
("Connacher" or the "Company") is pleased to announce that it has entered into
an agreement with a syndicate of underwriters led by RBC Capital Markets under
which the underwriters have agreed to purchase C$87,000,000 aggregate
principal amount of Convertible Senior Unsecured Debentures due June 30, 2012
(the "Debentures"). Connacher has granted the underwriters an option (the
"Over-Allotment Option") to purchase up to an additional 15% in principal
amount of Debentures on the same terms and conditions, exercisable up to 30
days following closing of the offering. Mustang Capital Partners Inc. assisted
Connacher with the offering. The offering is scheduled to close on or about
May 24, 2007.
    The Debentures are senior, unsecured obligations of Connacher and will
bear interest at a rate of 4.75% per annum payable semi-annually in arrears on
June 30 and December 31 in each year commencing December 31, 2007. The
Debentures are convertible at any time at the option of the holders into
common shares at an initial conversion price of $5.00 per common share. On or
after June 30, 2010, Connacher has the right to redeem all or a portion of the
Debentures at the principal amount plus accrued interest provided the current
market price of Connacher's common shares is at least 120% of the conversion
price. The Debentures will mature on June 30, 2012.
    The net proceeds of the offering will be used by the Company for general
corporate purposes including funding a portion of Connacher's capital
expenditure program in respect of the development of its oil sands projects
and for conventional capital expenditures.
    A preliminary short-form prospectus will be filed with securities
regulatory authorities in all provinces of Canada except Quebec. The offering
is being made in all provinces of Canada except Quebec by means of a
short-form prospectus, and is subject to the approval of securities regulatory
authorities. The securities to be offered have not been and will not be
registered under the U.S. Securities Act of 1933 and may not be offered or
sold in the United States absent registration or an applicable exemption from
the registration requirements of such Act. This news release shall not
constitute an offer to sell or the solicitation of an offer to buy securities
in any jurisdiction.

    Connacher is a Calgary-based oil and natural gas exploration and
production company. Its principal asset is its 100 percent interest in
reserves, resources and lands in the Great Divide regions of Alberta's oil
sands. Connacher also has conventional crude oil and natural gas properties in
Alberta and Saskatchewan, owns a 9,500 bbl/d refinery in Great Falls, Montana
and owns a 26 percent basic and fully-diluted interest in, and assists in the
management of, Petrolifera Petroleum Limited. This investment has a current
market value in excess of $240 million.