Connacher Begins Steam Injection at Great Divide Pod One Oil Sands Project


Great Divide Oil Sands Project
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Connacher Oil and Gas Limited began sequential injection of steam into fifteen steam-assisted gravity drainage ("SAGD") well pairs at Great Divide Pod One. This is Connacherís first 10,000 bpd oil sands project and is located 50 miles south of Fort McMurray, Alberta.

The company completed the processing and steam generating plant in 30 days without complications. Concurrently, fifteen SAGD well pairs were prepared to accept steam and circulation of steam in the injector while producer well bores are underway. Connacher will steam the wells for ninety days prior to the startup of production. The steam process will be monitored on each well to determine the optimum startup date.

"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 company."

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."

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