Recent Developments-Operational UpdateUJMRecent Developments
Operational Update
Connacher's conventional production in western Canada averaged 2,350 boe/d in the third quarter of 2007
and 2,366 boe/d for the nine months ended September 30, 2007. The Corporation is currently in the midst of a
modest drilling program and plans to tie-in up to 1,000 boe/d of tested natural gas volumes at Marten Creek, Alberta
by the end of the first quarter of 2008.
The Refinery in Great Falls, Montana continues to operate near capacity of 9,500 bbls/d. Consistent with
the general trend in the refining sector, refinery margins weakened during the third quarter of 2007 due to the high
input costs of crude oil and, pursuant to its accounting policy, the Corporation may incur a reduction in the carrying
cost of its asphalt inventory at year-end due to seasonally declining asphalt prices.
Great Divide
Connacher completed construction of the Pod One SAGD facility and drilling of the related well pairs in
August 2007. The plant was commissioned and on September 16, 2007, steaming of the well pairs commenced.
On October 22, 2007 Connacher announced that it had delivered and sold to market its first truckload of diluted bitumen
("dilbit") from Pod One. The Corporation disclosed that the project is producing and recovering small amounts of
bitumen as a by-product of the steam circulation and reservoir pre-heating phase of the project and, as a result, the
Corporation anticipates that during this phase it will be delivering one or two truck loads per day of dilbit to various
sales terminals, including the Corporation's Refinery. The delivery of dilbit to the Refinery will allow the
Corporation to analyze and assay the dilbit, which will aid in its future marketing. The Corporation also anticipates
that it will backhaul naphtha from the Refinery to Great Divide to be used as diluent.
In June 2007, Connacher submitted an application to the Alberta Energy and Utilities Board and other
related regulators and government departments for approval to proceed with the development of the second 10,000
bbl/d Great Divide project (the "Algar Project").
To further define and delineate Connacher's main oil sands properties in the Great Divide area, Connacher
plans to shoot up to 84 square kilometres of three dimensional ("3D") seismic data outside of the main lease block.
Connacher also anticipates drilling 120 core holes during the winter of 2008 on its main lease block to evaluate
prospects and leads resulting from previous 3D seismic programs