Connacher Oil and Gas Limited has commenced the sequential injection of steam into the fifteen steam-assisted gravity drainage (“SAGD”) well pairs at Great Divide Pod One, the company’s first 10,000 barrels per day oil sands project located approximately 50 miles south of Fort McMurray, Alberta.

The company has now completed the full commissioning of its processing and steam generating plant. As planned, this was a thirty day process that occurred without any major complications. Concurrently, all of the company’s fifteen SAGD well pairs were prepared to accept steam and circulation of steam in the injector and producer well bores is accordingly underway.

Connacher plans to steam the wells for approximately ninety days prior to the planned startup of production. The process will be closely monitored to determine the optimum startup date based on individual well response.

“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.”