CALGARY, July 9 /CNW/ - Connacher Oil and Gas Limited (CLL - TSX)
announced today that on May 15, 2009 its Great Divide Pod One bitumen
production surpassed the three million (3,000,000) barrel mark and as at June
30, 2009 total production from its Pod One steam-assisted gravity drainage
("SAGD") plant was 3.3 million barrels. This level of cumulative production
has been achieved in approximately 18 months since the commencement of Pod One
sales in December 2007. Current production at Pod One is approximately 8,000
bbl/d and bitumen production is anticipated to approach Pod One plant capacity
of 10,000 bbl/d during the third quarter 2009. This would contribute to the
continuing reduction in per barrel operating costs, which recently have been
below $15.00 per barrel produced, assisted by lower natural gas prices,
improved production and lower variable costs as a result of optimization
efforts by the company's operating staff. As many of the company's operating
costs at Pod One costs are fixed, higher anticipated volumes should result in
lower unit costs during the remainder of the year, other things being equal.
    Connacher also advised that it is now posting slides on its website
detailing the operating conditions and progress of construction at its second
10,000 bbl/d SAGD plant at Algar, situated approximately eight kilometers east
of Great Divide Pod One. Investors should go to www.connacheroil.com and click
on the Operations link. Click on Algar, then Algar Slideshow to view
developments. The slides will be updated periodically as the company counts
down on its goal of completion of the Algar plant and related SAGD horizontal
well pairs in approximately 275 days from the July 7, 2009 recommencement of
construction at the site.

    Forward Looking Information

    This press release contains forward-looking information including
anticipated bitumen production from Pod One and the timing associated
therewith and anticipated reductions in operating costs per barrel during the
third quarter and for the balance of the 2009 year. Forward looking
information is based on management's expectations regarding future economic
conditions, commodity prices and differentials, results of operation,
production, future capital and other expenditures (including the amount,
nature and sources of funding thereof), plans for and results of drilling
activity, environmental matters, business prospects and opportunities.
Forward-looking information involves significant known and unknown risks and
uncertainties, which could cause actual results to differ materially from
those anticipated. These risks include, but are not limited to: the risks
associated with the oil and gas industry (e.g., operational risks in
development, exploration and production; delays or changes in plans with
respect to exploration or development projects or capital expenditures; the
uncertainty of reserve and resource estimates; the uncertainty of estimates
and projections relating to production, costs and expenses, and health, safety
and environmental risks), the risk of commodity price and foreign exchange
rate fluctuations, risks and uncertainties associated with securing and
maintaining the necessary regulatory approvals and financing to proceed with
the continued expansion of the Great Divide project. In addition, the current
financial crisis has resulted in severe economic uncertainty and resulting
volatility and, at times, illiquidity in credit and capital markets which
increases the risk that actual results will vary from forward looking
expectations in this press release and these variations may be material. These
and other risks and uncertainties are described in detail in Connacher's
Annual Information Form for the year ended December 31, 2008, which is
available at www.sedar.com. Although Connacher believes that the expectations
in such forward-looking information are reasonable, there can be no assurance
that such expectations shall prove to be correct. The forward-looking
information included in this press release is expressly qualified in their
entirety by this cautionary statement. The forward-looking information
included in this press release is made as of the date hereof and Connacher
assumes no obligation to update or revise any forward-looking information to
reflect new events or circumstances, except as required by law.