Connacher Oil & Gas Ltd CLLZF

THIS IS ALL GOOD....

[jerrid]

Connacher believes the Middle McMurray Channel which comprises Pod One at Great Divide is a high quality, relatively uncomplicated reservoir. The reservoir sands exhibit excellent porosities, very high permeability, high oil saturation approximating 90 percent and bitumen content by weight approaching 16 percent, well above acceptable cutoffs. It is sufficiently thick and covers a large enough area to contain significant oil-in place and recoverable oil, using available and established SAGD technology. An updated independent resource evaluation and reserve report incorporating this data is presently in preparation; it will be used to assist Connacher in its financing initiatives to raise the requisite capital to bring this 25 year project onstream in late 2006. In addition to the aforementioned technical data supporting Connacher's decision to apply in July, 2005 for project approval, Connacher has also conducted reservoir simulation studies which support its expectation of high per well productivity due to the excellent reservoir at Pod One. These results are similar to actual reported well performance at the Jacos Hangingstone project, geographically the closest to Great Divide. Per well productivity at Hangingstone has reached as high as 1,500 bbl/d and some wells have yielded over 1,000 barrels of average daily crude oil production over a multi-year period, with total recoveries in excess of one million barrels per well pair. Connacher also anticipates reasonable and acceptable steam/oil ratios will occur at Great Divide Pod One, given the quality of the reservoir. Connacher is fortunate in that the Middle McMurray sands which constitute Pod One's reservoir, are deposited on a flat paleo-basement, which should contribute to optimum recoveries as most of the bitumen within the sand reservoir will be producible by placing the horizontal producing well bore at or near the base of the reservoir section. This is also expected to be feasible as no bottom water has been encountered, nor is there evidence of discernible basement rubble, which could otherwise reduce effective SAGD pay thicknesses by having to place the well pair higher in the section.