GREAT DIVIDE (CONNACHER)

Connacher Oil and Gas Limited announces today that on October 16, 2009 a major milestone was achieved at the Algar construction site with the engineered lift of the two evaporator towers, which constitute part of Connacher’s second 10,000 bbl/d steam-assisted gravity drainage (“SAGD”) plant at its Great Divide oil sands development project in northeastern Alberta. Construction at the Algar project is proceeding on time and under budget at this time, with a target to complete the plant and tie in the associated seventeen SAGD horizontal well pairs in early April 2010. Thereafter, it will take approximately one month to commission the plant and steaming of the well pairs should start in May 2010 and last approximately three months before first production in approximately August 2010.

Connacher Oil and Gas announced that construction activities were restarted at its second 10,000 bbl/d steam assisted gravity drainage (“SAGD”) facility (“Algar”) in the Great Divide region of northeastern Alberta. On July 7, 2009, field construction at the Algar plant site resumed with the driving of the SAGD facility piles. We anticipate that construction activities at Algar and the drilling of 15 SAGD well pairs will take approximately 275 days to complete. This will be followed by a 30 day requisite commissioning of the SAGD facility and a then 90 day steam circulation phase for the SAGD well pairs, prior to commencement of SAGD production and ramp-up towards full plant capacity of 10,000 bbl/d

Connacher Oil and Gas Limited announced today it has closed the sale of US$200 million face value of 11.75% First Lien Senior Secured Notes due July 15, 2014 at a price of 93.678%, resulting in a yield to maturity of 13.5% and gross proceeds of approximately US$187 million. Connacher, having closed this debt financing, will proceed with the reactivation of the Algar Project. Following completion of a brief pre-start-up organizational period, work is anticipated to commence and the Corporation anticipates that construction at Algar and the drilling of the 15 SAGD well pairs will take approximately 275 days from commencement of field activities. This will be followed by requisite plant commissioning and steaming of the SAGD well pairs, which will require additional time of approximately 120 days, prior to commencing Algar production and its ramp-up towards full plant capacity of 10,000 bbl/d of bitumen.