Connacher Oil & Gas Ltd CLLZF

CLL owns 35% petrolifera and more good news

[ghayes]

REMEMBER CLL owns 35% of the shares of Petrolifera. Petrolifera reaches understandings to secure two rigs; crude production surges past 6,000 bbl/d CALGARY, May 31 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX) announced today that it has reached understandings whereby two drilling rigs will become available to the company to recommence its 24 well 2006 drilling program on its Puesto Morales/Rinconada concession during June 2006. See "Forward-Looking Statements". The first rig is scheduled to arrive on location before the end of June 2006 for an initial indicated period of approximately six months, which is anticipated to be extendible based on discussions with the contractor. A second rig and a service rig are anticipated to become available to the company during the fourth quarter 2006 and are expected to be contracted to Petrolifera for an initial period of one year. The availability of these rigs should enable Petrolifera to substantially if not totally complete its anticipated 2006 drilling program, in part timed to the anticipated startup of its new onsite treatment facilities and pipeline, which are being built to efficiently transport growing production volumes to market. This planned construction of facilities is presently on track for a fourth quarter startup. In the interim, Petrolifera is trucking its daily production to offsite third party treatment facilities prior to sale. As a result of recently- negotiated access to a second non-owned treatment plant for a modest per barrel fee, Petrolifera has commenced production from its 1011 well and total crude oil production has recently exceeded 6,000 bbl/d, primarily from the 1002, 1003, 1010 and 1011 wells. All of these wells are flowing oil wells producing through restrictive chokes, generally ranging from 10 to 14 millimeters. Over time, choke sizes may be modified, consistent with sound reservoir engineering practices and other considerations. Based on recent internal engineering calculations, it is management's opinion that the calculated productive capacity of these four wells is considerably above current production levels. Water cuts remain minimal at under one percent. Also, wells 1004 and 1005 are anticipated to be placed on stream with artificial lift to provide additional production increases in the near future. Petrolifera Petroleum Limited is a public Canadian oil and natural gas exploration and production company with significant producing assets on its 100 percent owned and operated Puesto Morales/Rinconada concession in the Neuquen Basin, Argentina. It also owns 100 percent of and operates licenses over Blocks 106 and 107 comprising over five million acres, respectively in the Maranon and Ucayali Basins, onshore Peru. Forward-Looking Statements This press release contains forward-looking statements, including but not limited to expectations with respect to rig availability, completion of the 2006 drilling program, timing for completion of construction of company owned transportation facilities, production rates, flow rates and productive capacity of existing wells. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to, risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates and recoverability thereof; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and third party contractors and risk associated with international activity. Although Petrolifera believes that our expectations represented by these forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. In particular, Petrolifera expects, but has yet to complete, the documentation to secure the rigs necessary to recommence its 2006 drilling program. There can be no guarantee that Petrolifera will be able to complete the necessary documentation with the third party contractors. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in the company's securities should not place undue reliance on these forward-looking statements. For a detailed description of the risks and uncertainties facing Petrolifera, readers should refer to Petrolifera's Annual Information Form as filed at www.sedar.com. For further information: Richard A Gusella, Executive Chairman, Petrolifera Petroleum Limited, Phone: [phone], Fax: [phone], [e-mail], www.petrolifera.ca