Connacher Begins Full-Time Production and Injection at Great Divide

Connacher Oil and Gas has achieved another timely milestone in its ramp up to 10,000 barrels per day of bitumen production with the conversion of the first horizontal steam-assisted gravity drainage (SAGD) well pair to full-time production/injection at its Great Divide Pod One SAGD project (Pod One), located approximately 50 miles south of Fort McMurray, Alberta.

The project has been circulating steam into all 30 wells (15 well pairs) as part of its approximately 90 day circulation and reservoir pre-heating phase. The first well pair has demonstrated that the upper horizontal well is ready to receive full time steam injection, while, as the reservoir continues to heat up, the lower well will become a full-time producer. Over the next several weeks, additional 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. 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.

To date the company is very pleased with the reservoir performance in the pre-heat or circulation phase, as it has essentially performed as anticipated. The company continues to produce and recover small but significant amounts of bitumen at surface in the circulation phase. This past week the project averaged 400 barrels per day of bitumen production and on occasion bitumen has been produced at rates of 600 barrels per day, indicating a positive response from the application of steam to the reservoir This bitumen has been mixed with diluent and the volumes were trucked to market and sold.