Connacher Oil & Gas Ltd CLLZF

David Pescod

[Lucy1]

cheers, Lucy. 8/16/05 CONNACHER OIL & GAS (T-CLL) $1.98 +0.15 It was back in May that Kerry Sully the ex-head of Ranchmen’s Resources (which he sold to Total for a very nice number many years ago) came back from the COPIC conference and suggested Connacher Oil and Gas was a story people simply had to have. We are glad we listened to him and quoted him widely. COPIC is the big shindig where Canada’s oil and gas producers get together and show their wares and Connacher’s big new asset, was at the perfect time picking up a huge chunk of land south of Fort McMurray right on power, right on the highway and everything else, that had heavy oil. At the time, Sully seemed overly aggressive to some of us, as he suggested this project could be worth as much as $2.50 to $4.00 a share, by the fourth quarter of 2006. Needless to say, since May many things have changed, not the least of which is the very high price of oil. Who would have thought we’d see oil at $66.00. Meanwhile, the take-out of that dull/boring heavy oil company, Deer Creek, and the market capitalization given it, has suddenly re-valued all the potential heavy oil producers out there. We are going back to Kerry over the next days to help develop our “Gung-Ho Portfolio” and what we can tell you so far, is that because of the changes (and yet to come is the visit by Vice President Dick Cheney who himself is an oil and gas man and will once again focus on the oil sands) this sector continues to gain more interest. One asset of Connacher compared to some of the big ones, is that much of their engineering is off the rack and some of their facilities can almost be built in modular form and could escape the massive over-runs that are starting to get some attention. When you see cost over-runs of 40%, 60% or 80% like we are seeing on some of the big oil sands projects, that could very much affect profitability at the end of the day. If Connacher could be up and running by the last quarter of next year, obviously Connacher would be in the lead of many others. Sully gives us a new target of $5.00 by March of this coming year and he assumes that over the next four to six months, EUB approval and environmental investigations, will be positively dealt with. There is also the financing to get the project up and going. When we ask Sully if he has a second pick these days, he points to Oilexco and suggests their methodical exploration of the North Sea still has him liking that story a lot. This newsletter is solely the work of the author for the private information of clients. Although the author is a registered investment advisor at Canaccord Capital Corporation (“Canaccord Capital”), this is not an official publication of Canaccord Capital and the author is not a Canaccord Capital analys t. The views (including any recommendations) expressed in this newsletter are those of the author alone, and are not necessarily those of Canaccord Capital. The information contained in this newsletter is drawn from sources believed to be reliable, but the accuracy and completeness of the information is not guaranteed, nor in providing it do the author or Canaccord Capital assume any liability. This information is given as of the date appearing on this newsletter, and neither the author nor Canaccord Capital assume any obligation to update the information or advise on further developments relating to the information provided herein. This newsletter is intended for distribution in thos e jurisdictions where both the author and Canaccord Capital are registered to do business in securities. Any distribution or dissemination of this newsletter in any other jurisdiction is strictly prohibited. The holdings of the author, Canaccord Capital, its affiliated companies and holdings of their respective directors, officers and employees and compa nies with which they are associated may, from time to time, include the securities mentioned in this newsletter. e-mail: [e-mail] August 16, 2005 e-mail: [e-mail] Connacher Oil & Gas www.connacheroil.com