Connacher Oil and Gas Acquires Luke Energy

Connacher Oil and Gas has completed the previously announced acquisition of all of the outstanding common shares of Luke Energy Ltd. by way of a business combination under a court approved Plan of Arrangement involving Connacher, Luke and a wholly-owned subsidiary of Connacher.

Under the Arrangement, holders of Luke Shares will receive $2.31 in cash and 0.75 of one common share of Connacher for each Luke Share held, resulting in the payment of approximately $91.5 million and the issuance from treasury of approximately 30 million common shares of Connacher. Following closing of the Arrangement, Connacher remains debt free with an expanded cash flow base from the newly acquired Luke assets, approximately $54 million of cash and $55 million of unutilized credit facilities. Connacher now has approximately 190 million common shares outstanding (199 million common shares on a diluted basis).

Connacher also announced that it has completed filings today with the Toronto Stock Exchange to delist the Luke Shares (LKE - TSX) and expects such delisting to occur within two or three business days following the date hereof. Connacher has also made application to the local securities regulatory authority or regulator in each jurisdiction in which Luke is a reporting issuer for a decision that Luke has ceased to be a reporting issuer in each such jurisdiction.

Connacher is a Calgary-based oil and natural gas exploration and production company. Its principal asset is its 100 percent ownership of the Great Divide oil sands project in Alberta, where 110 sections (70,400 acres) of oil sands leases are held. The company owns conventional acreage and oil production in southwest Saskatchewan. Connacher also owns approximately 33 percent (basic) of Petrolifera Petroleum Limited (PDP - TSX), a Canadian public company engaged in oil and natural gas exploration and production in Argentina and Peru. In early March 2006 Connacher announced it had signed a definitive agreement to acquire refining assets and related product inventory located in Great Falls, Montana for approximately US$55 million, comprised of $51 million cash and one million Connacher common shares to be issued from treasury. The cash portion of the purchase is to be substantially financed with a bridge loan which has been arranged with a large international bank.