Connacher Oil and Gas Limited reported that its daily bitumen production rate at its Great Divide Pod One steam-assisted gravity drainage (SAGD) project has been ramping up and has now surpassed 5,000 bbl/d. When combined with recent average daily conventional production levels, Connacher is now producing approximately 7,500 boe/d of bitumen, crude oil and natural gas. This is approximately triple the company's production level during 2007.

Further increases are anticipated, as the Pod One ramp up continues during upcoming months towards the project's design level of 10,000 bbl/d and in the short run, as new Marten Creek/Randall natural gas volumes of approximately 1,000 boe/d are brought onstream as anticipated during March 2008. The company is delighted with the production ramp-up seen at Great Divide and also with the ongoing production optimization program on its conventional oil and gas properties.

Readers are cautioned that all references to barrel of oil equivalent ("boe") are calculated on the basis of 6 mcf:1 bbl. Readers are also cautioned that the conversion used in calculating barrels of oil equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Furthermore, boes may be misleading if used in isolation.

At Great Divide Pod One, Connacher's SAGD project continues to exceed expectations, as production builds throughout 2008 towards the project design of 10,000 bbl/d of bitumen. Currently, 12 well pairs out of 15 well pairs have been converted ("flipped over") to SAGD production, including several in recent days. This would likely have occurred earlier in the month except for brutal winter weather conditions in late January and early February 2008, leading to the decision to delay the conversion of additional wells until more normal conditions prevailed. It should be noted our dedicated operating staff at Pod One were able to keep the facility operating during this period, when other oil sands operations shut down.

The company's cumulative bitumen production, which has primarily occurred in the past seven weeks since steam injection commenced, now totals over 140,000 barrels. Performance indicators including temperatures, pressures, steam oil ratios and individual well productivities continue to meet or exceed our targets at this stage of production.

Connacher's facility and its operating and marketing staff has been handling the increased bitumen production and the subsequent sale of both raw bitumen and diluted bitumen ("dilbit"). Connacher continues to truck its bitumen and dilbit to various sales points and has been pleased with the pricing and indicated netbacks available from the various market alternatives it is accessing. Specific pricing is not being disclosed at this time for competitive reasons.

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