re: CLL.TO - Connacher Oil & Gas C$5.45
Wow - looks like they are progressing nicely. Connacher is even hinting at providing QUARTERLY resource and reserve updates this year.
Moreover after their acquisitive move (pending) on Luke Energy, they are now trying to obtain a Montana based REFINERY asset.. HEy, Mr. Gusella is trying to build up another "integrated" producer, centered on tar-sands and heavy oil, reminds me of Husky..
biz.yahoo.com
Connacher provides operational update; Comments on Petrolifera success; Updates proposed Luke Energy Ltd. and proposed Montana refinery acquisitions; and reorganizes Board Committees
Friday January 27, 8:09 pm ET
CALGARY, Jan. 27 - Connacher Oil and Gas Limited (CLL - TSX) is pleased to provide an update on its activities in Western Canada; to comment on the ongoing success of the drilling and testing program of Petrolifera Petroleum Limited, in which Connacher owns a 35 percent equity stake; to briefly comment on the proposed acquisition of Luke Energy Ltd. ("Luke") and the proposed purchase of certain refining assets in Montana; and to advise its shareholders of the reconstitution and expansion of its Board Committees in keeping with prevailing good governance policies.
At Great Divide, Alberta, Connacher has drilled and cored five wells to date in 2006, three in proximity to Pod One and two on Pod Four in the southeast corner of its primary lease. Eight additional locations have been prepared with surface hole drilled and surface casing set, which will expedite the pace at which additional wells can be drilled, logged and cored once drilling resumes after a short break for rig crew time off the past few days. Connacher is operating with one core hole rig, as the other two which were available on a short-term basis have left to work for other operators now that some colder weather has emerged in the region. Their brief presence, however, helped in the preparation of locations for upcoming wells. The company hopes to achieve a minimum of quarter-section spacing over identified channels with its 2006 core hole program, which will be complemented by proposed 3D seismic coverage. This has proven to be an extremely useful technical tool for Connacher when applied in this area.
Thus far, Connacher is pleased with the results of its core hole program, which is attempting to expand the reserve base of Pod One and to delineate additional accumulations which could be candidates for prospective future development under separate applications to the regulators in Alberta, if, as and when sufficient resource and reserves are identified.
Connacher is also preparing to commence the aforementioned 3D seismic program over what has been identified as Pod Two northeast of Pod One on its main lease block at Great Divide. This will be undertaken before core hole drilling commences in this region. Thereafter, a similar 3D seismic program will be shot over Pod Four, when the available core hole rig completes the Pod Four program and moves to Pod Two.
Connacher is now entering the sixth month since its application for the development of Pod One was submitted to the regulators in Alberta in August 2005. In recent months, minor amendments have been made to the orientation of the proposed plant site and engineering modifications have been made to the proposed water processing and treatment system. These have been provided to the Energy Utilities Board ("EUB") on a timely basis.
Also, certain equipment with long lead times associated with the proposed plant have been preordered, having regard to the timetable and schedule to which the Company is attempting to adhere with respect to startup, subject to receipt of regulatory approvals.
Connacher will be updating its corporate reserve reports for year end 2005 and expects it will update these reports on a quarterly basis in 2006 as additional core hole results are achieved, evaluated and incorporated into the data base required for reserve and resource estimates. These reports will be prepared by independent consultants selected by Connacher's Reserves Committee.
Connacher notes that Petrolifera Petroleum Limited continues to report favorable drilling and test results from its program on the Puesto Morales/Rinconada Concession in Argentina. Recently, Petrolifera reported that the RN.PM.a-1010 well tested over 4,200 bbl/d of light oil through a restricted choke. While this was not disclosed as a stabilized flow rate, the tests were conducted over fairly lengthy periods of up to ten hours, which is encouraging. This is the fourth flowing oil well reported since drilling began in late 2005 and the third well with test rates exceeding 2,000 bbl/d. Connacher also noted Petrolifera is forecasting an active drilling and facility installation program during the balance of 2006, including initiation of exploration activity on its significant acreage spreads in Peru and drilling of up to 24 new wells on its Argentinean acreage, while increasing its anticipated production levels. Connacher owns 13.3 million common shares of Petrolifera Petroleum Limited on a fully-diluted basis, with a current market value of approximately $165 million or approximately $1.18 per basic Connacher common share outstanding.
Connacher anticipates materials related to its proposed acquisition of Luke Energy Ltd. ("Luke") by way of Plan of Arrangement will be mailed to Luke shareholders on or about the 15th of February, 2006 with a view to a shareholders' meeting on or about March 15, 2006. Connacher is in the final stages of completing financing arrangements for the Luke purchase, which will give it access to significant natural gas reserves and production which could serve as a hedge against the cost of natural gas used to create steam for the Company's Great Divide project. Also, negotiations related to the proposed purchase and financing of the acquisition of refining assets in Montana are advancing. Should this transaction be completed, its objective would be to integrate and hedge Connacher's anticipated heavy oil production activity at Great Divide. A definitive and binding agreement continues to be under negotiation within the framework of an Exclusivity Agreement with the vendor. There can be no assurance that a binding agreement with respect to the refinery acquisition will be executed or that either or both of these transactions will be completed.
Connacher has recently expanded its Board of Directors with the appointment of Mr. Hugh Bessell of Toronto and Mr. Mike Seth of Calgary to the Board. Recognizing the expertise which these gentlemen bring to the Board to complement and expand that of the existing members, Connacher has reconstituted its Committees, elevated the Reserves Subcommittee to full Committee status and added a Health, Safety and Environment Committee of the Board. Mr. Stewart D. McGregor remains the Lead Director, and the Audit Committee is entirely composed of independent and unrelated directors. Members of management do not sit on any Committee.
The Committees of the Board are as follows:
Audit: Mr. D. Hugh Bessell, Chair
Mr. Colin M. Evans
Mr. W. C. ("Mike") Seth
Governance: Mr. Charles Berard, Chair
Mr. D. Hugh Bessell
Mr. S. D. McGregor
Human Resources: Mr. Colin M. Evans, Chair
Mr. D. Hugh Bessell
Mr. S. D. McGregor
Health, Safety and Environment: Mr. Charles W. Berard, Chair
Mr. W. C. Seth
Mr. Colin M. Evans
Reserves Subcommittee: Mr. W. C. Seth, Chair
Mr. Colin M. Evans
Mr. D. Hugh Bessell
Mrs. Jennifer K. Kennedy, partner of Macleod Dixon LLP, continues as Corporate Secretary. Connacher is developing and finalizing terms of reference for the new Committees.
Connacher Oil and Gas Limited is a Calgary-based crude oil and natural gas exploration and production company. Its primary asset is 110 sections of oil sands leases at its Great Divide oil sands project in northeastern Alberta. Connacher also holds conventional properties in the Province of Saskatchewan at Battrum and Steelman and owns a 35 percent basic equity stake in Petrolifera Petroleum Limited (PDP - TSX). Connacher is in the process of acquiring Luke Energy Ltd. (LKE - TSX) and is negotiating the possible purchase of refining assets situated in Montana, U.S.A.
This press release contains forward-looking statements, including but not limited to the planned drilling program, flow rates and operating costs. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. There risks include, but are not limited to, risks associated with the oil and gas industry, (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and risk associated with international activity.
Due to the risks, uncertainties and assumptions inherent in forward- looking statements, prospective investors in the company's securities should not place undue reliance on these forward-looking statements.
For further information
Richard A. Gusella, President and Chief Executive Officer, Connacher Oil and Gas Limited, Phone: (403) 538-6201, Fax: (403) 538-6225, inquiries@connacheroil.com, www.conacheroil.com |
