CALGARY, Sept. 16 /CNW/ - Connacher Oil and Gas Limited (CLL - TSX) announces today that it successfully completed its mandated turnaround at its 10,000 bbl/d Great Divide Pod One steam assisted gravity drainage ("SAGD") oil sands plant in northeastern Alberta on Thursday, September 11, 2008, in accordance with its timetable. The turnaround was required under prevailing Alberta regulations. Boilers and all pressure safety valves were inspected with excellent results and the company is in the process of restoring normal operations and ramping up its bitumen production. It is anticipated production levels will shortly be restored to pre-turnaround levels prior to the anticipated ramp up of Pod One production to design levels.

Recently, there has been numerous press articles citing oil price levels required to either initiate new capital programs at the oil sands or to sustain operations. Most of these articles have focused on mining operations in the oil sands, normally operated in conjunction with upgraders. Connacher wishes to reaffirm that a much lower breakeven crude oil price hurdle is generally associated with SAGD operations, after provision for normalized unit operating costs, transportation charges, interest on long term debt, corporate overhead, royalties payable to the Alberta Government and for a respectable long-term return on invested capital, as compared to mining or integrated mining operations. This is particularly true in the present operating and pricing environment, with heavy oil differentials at very low levels due to the delays in the commencement of significant new industry volumes of bitumen-based production. It also reflects the lower unit capital requirements normally associated with SAGD operations, due to what is characterized as the efficiency of smaller scale operations.

Also, Connacher is in the fortunate position of having pre-funded its capital requirements for its second oil sands plant at Algar, which is awaiting final regulatory approval, anticipated to be received in the next few weeks. Connacher has the cash, cash flow and available credit to maintain normal operations and to fund its oil sands development program at Algar. Connacher has already pre-ordered all long-lead items and has completed 70 percent of its major equipment construction for Algar as at August 31, 2008. Preliminary unaudited financial and operating results for July and August 2008 reinforce the Company's expectations for significant progress during the third quarter of 2008 as compared to the prior quarter this year and to the comparable quarter in 2007.

Forward-Looking Information:

This press release contains "forward-looking information" including: anticipated bitumen production and the timeline for the restoration of anticipated production levels at Great Divide Pod One following the mandated turnaround; development of additional oil sands projects (including receipt of regulatory approvals in respect of Algar, anticipated capital expenditures for construction of Algar and sources of funding for construction of Algar) and anticipated financial and operating results for the third quarter of 2008. Forward-looking information is frequently characterized by words such as "plan", expect", "project", "intend", "believe", "anticipate", estimate", "may", "will", "could", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the exploration and development of oil sands properties, difficulties or delays during construction and in start-up operations following the turnaround, the uncertainties involved in interpreting drilling results and other geological data, fluctuating oil prices, the possibility of unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future and other factors including unforeseen delays. As an oil sands enterprise in the development stage, Connacher faces risks including those associated with exploration, development, construction, start-up, approvals and the continuing ability to access sufficient capital from external sources if required. Actual production levels at Great Divide Pod One and the timelines associated therewith, actual capital expenditures in respect of Algar and the timeline for receipt of regulatory approval may vary from those anticipated in this press release and such variations may be material. Additionally, financial and operating results for the third quarter of 2008 are dependent on, among other things, actual commodity prices realized by the company, restoration of production levels to pre-turnaround levels on the timeline indicated and maintenance of current operating costs in an inflationary environment. For a description of the risks and uncertainties facing Connacher and its business and affairs, readers should refer to Connacher's Annual Information Form for the year ended December 31, 2007, which is available at www.sedar.com. Connacher undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, unless required by law. Due to the risks and uncertainties inherent in forward-looking information, the reader is cautioned not to place undue reliance on this forward-looking information.

For further information: Richard A. Gusella, President and Chief Executive Officer OR Grant D. Ukrainetz, Vice President, Corporate Development, Phone: (403) 538-6201, Fax: (403) 538-6225, inquiries@connacheroil.com, Website: www.connacheroil.com