Happy New Year Everyone.

Predictions from the Road:

As a longtime shareholder of Connacher shares since 2002 I am making the following predictions for Connacher for 2011. I think that 2011 will be a pivotal year for Connacher. It was the RBC Report that stated that Connacher is teetering on the verge of profitabillity. So for Connacher to grab hold of 2011 and succeed and move forward I predict that it will take the following actions to grow the company as Connacher Oil, singularly focused on it's bitumen production and growth going forward. To date it has been a hodge podge of assets, a "three legged stool" which has been wobbling and unstable, and an oddity in the oilsands which has garnered it little support in the market place over the last two years. For Connacher to succeed and grow into it's balance sheet it needs to throw off the yoke of being a junior oilsands producer, which carries with it a limited vision and future, and it must start transforming itself in 2011 into a mid sized bitumen producer. In order to do this, I predict that the following changes will take place in 2011.

1) Connacher will continue to sell off all of it's conventional oil and gas producing assets. The announced sale of Battrum's heavy oil production was done for a profit and this will be followed in the near future by the sale of Connacher's natural gas assets at Marten Creek and Randal. While Connacher is at it, they need to continue to sell all of their remaining natural gas assets at Gilby/Three Hills, Latornell etc. This will send a strong message to the market that Connacher will be a bitumen production company going forward.

2) Connacher will sell the Montana Refining Corporation (MRC) for a profit. Now is the time to do it while the anomaly exists in the refining market which has seen the Montana Refinery turning a profit over the last number of months. It's best to sell it outright now while it is making a profit, rather then to decide to do this down the road when the refinery returns to its normally slim margins and unprofitability. By ditching the refinery now,Connacher will realize a profit off the sale and it will be able to cut its workforce in half. By no longer having to pay the 100 workers at the Refinery going forward Connacher will be saving a great deal of money as it will not have to pay for the health benefits and pension costs of these employes. In additon, Connacher will not have to pony up the millions of dollars that it spends on feedstock for the refinery to operate on a yearly basis. With the price of oil rising above $100 a barrel going forward in 2011, the price will rise for the Bow River heavy oil feedstock that the refinery needs to operate thus limiting Connacher's refinery profit going forward. The sale of the refinery will send another message to the market that Connacher is solely a bitumen production company going forward with a clear vision.

(Connacher originally bought the refinery as a hedge against a drop in the price that it gets for its bitumen production, however, with a strong and successful hedging program in place it no longer needs the refinery at all.)

3) The sales of all of the remaining conventional oil and gas assets, and the refinery will provide Conancher with cash to reduce it's current debt which is what the market is looking for with its $868 million dollar debt hanging over it's corporate share price and the company's future. Starting to pay down debt will send a message to the market and garner Connacher new attention.

4) I predict that Connacher will do a reverse share split in the order of 6 shares for one, at the end of 2011 to significantly reduce it's high number of shares (480 million shares) in order to position Connacher for raising more equity to finance it's 24,000 bbl/d bitumen expansion project. Since Connacher's borrowing capacity is already basically stretched to the limit and since Connacher has shown little interest in taking in a venture partner, then a reverse share split is the only way for Connacher to raise the capital that it needs for the expansion project. At a six share for 1 reverse share split, this would result in Connacher having around 80 million shares selling for a price of say $7.60 per share. Connacher could then sell 35 million new shares for the price of $7.60 to raise $266,000,000 dollars to cover the first 12,000 barrel stage of the expansion project. This would be in additon to Connacher's increased cashflow from exisiting operations at the Great Divide and Algar which will both continue to ramp up production in 2011 in the face of rising oil prices.

The reverse share split will also benefit Connacher as many mutual funds and exchange funds will be forced to purchase Connacher shares as the shares will be priced over $5.00 so these funds will have to add Connacher shares to their basket of shares.

The downside of a reverse share split will be that Connacher shares will basically be gobbled up by institutions and there will be little opportunity for retail share holders to acquire more shares at a reasonable price. But it will put Connacher on a more stable footing and it will give Connacher a more stable future. For unless Connacher initiates these changes it runs the risk of going the way of UTS or OPTI and becoming basically irrelevant.

5) Petrolifera will also do a reverse share split at 5 or 6 for one share. This would put Petrolifera's share price up to $3.10 a share and Connacher could then look at dumping it's Petrolifera shares going forward in say 2012 when the price goes up based on developing it's natural gas assets in Columbia.

It is time now for the great debate. Should Connacher become a bitumen producer only as Jurek and others have argued for the last few years?

Cheers; Scott