Connacher Continues Conversion to Production and Injection at Great Divide

Connacher Oil and Gas Limited continues its ramp up to 10,000 barrels per day of bitumen production with the conversion of the two more horizontal steam-assisted gravity drainage ("SAGD") well pairs to full time production/injection at its Great Divide Pod One SAGD project ("Pod One"), located approximately 50 miles south of Fort McMurray, Alberta. Three additional well pairs are also currently in the process of being converted to production. This will bring to six the total of converted well pairs out of 15 SAGD well pairs at Pod One.

The project continues to perform well both with operation of the surface facilities as well as in the reservoir and objectives continue to be met. Over the next several weeks the remaining 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. The project production is exceeding expectations for January and is currently in excess of 1,000 barrels per day of bitumen, primarily from the three converted wells, which are also ramping up to anticipated productive capacity with the passage of time. This bitumen is blended with diluent currently supplied from the company's refinery in Great Falls Montana and is sold into various markets. 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.

Connacher has also commenced its 2008 core hole and seismic delineation and exploration program in the oil sands and anticipates it will drill 120 core hole wells this winter using six rigs. These additional core holes would give Connacher core hole control over approximately ten percent of its oil sands acreage at Great Divide and Halfway Creek, Alberta. Over 300 core holes were recently licensed by the company to enable operational flexibility.

On its conventional side of the business, the company has commenced its multi-well winter drilling program on its Randall property in the Marten Creek natural gas production area in northern Alberta. Concurrent with this drilling, the company has started construction of a six million cubic feet per day Randall gas plant, gathering system and sales line that will result in the tie-in of the discoveries made last winter at Randall. The project is slated for completion at the end of first quarter. Logistics and planning for Connacher's winter program were completed in third quarter 2007 and all rigs, personnel, and equipment are in place. Subject to weather and other unforeseen circumstances, this should enable completion of all of Connacher's anticipated drilling and construction in the first quarter 2008.