Connacher Oil and Gas Examines Oil Sands Project in Alberta

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Connacher Oil and Gas Limited (TSX:CLL) (Calgary, Alberta) is currently in negotiations with various parties to obtain financial backing to develop its Great Divide oil sands project in Alberta. The project located some 80 kilometers Southwest of Fort McMurray has the potential to produce 8,000 to 10,000 barrels per day of bitumen from the subsurface resource utilizing steam assisted gravity drainage (SAGD) technology. SAGD technology utilizes a steam injection well to change the viscosity of the crude locked in the sands and causes it to flow in a downward direction, where it is collected by a second horizontal production well.

Connacher acquired the Great Divide project in early 2004. The project covers approximately 54,000 acres of oil sands leases and existing oil and gas pipelines currently intersect the property as well as good highway access. Eleven coreholes taken during a 2004 exploration program identified several channels of which one channel with an estimated 52.7 million possible barrels of recoverable bitumen was identified with a estimated value of $160 million CND to Connacher.

Connacher expects to file permitting with the NEB in early 2005 and select engineering services in the late second or early third quarter of 2005. All things considered, Connacher Oil and Gas could begin construction on the $170 million CDN Great Divide project in the spring of 2006, with completion targeted for 2007. The scope of the Great Divide project could possibly change in an upward direction as more channels are identified.

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