Connacher Oil & Gas Limited Receives Government Approvals for the Great Divide Oil Sands Project

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Researched by Industrial Info Resources (Sugar Land, Texas). Connacher Oil and Gas Limited (TSX:CLL)(Calgary, Alberta) has received government approval for its Great Divide oil sands project, located approximately 80 kilometers southwest of Fort McMurray, Alberta. The approval marks the culmination of approximately eleven months of review of the project by the Alberta Energy and Utilities Board (EUB) and the project was granted clearance in order number 10587. The granting of the order now allows Connacher Oil & Gas to proceed with the construction of its Pod 1 processing plant and the drilling of its first fifteen well pairs during the third and fourth quarter of 2006.

Connacher has contracted two SAGD capable drilling rigs, with the first scheduled to be onsite during September and the second scheduled to be on location during the fourth quarter of 2006. Connacher expects to begin construction on its field facilities during the late fourth quarter of 2006 with a completion and start up date set for the second quarter of 2007. Once completed, the bitumen production from the fifteen well pairs of Pod 1 will ramp up to 10,000 barrels per day (BBL/d). The project will have a production lifespan of twenty five years.

Connacher awarded the engineering contract for the Great Divide project to the Calgary office of WorleyParsons MEG. Connacher is currently 80% complete with engineering and design work and over 65% of the major equipment fabrication. Mechanical and civil design work is complete as well as over forty five percent of the electrical design. Unlike other oil sands projects in the region that are incurring major cost overruns, Connacher estimates that overall cost overruns for the Great Divide project have risen just 15%.

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