Connacher Announces Third Quarter 2013 Results

CALGARY, Nov. 13, 2013 /CNW/ - Connacher Oil and Gas Limited (TSX: CLL) 
("Connacher" or the "Company") announces the release of its financial and 
operating results for the third quarter ending September 30, 2013 ("Q3 2013") 
and conference call details. Selected financial and operational information is 
outlined below and should be read in conjunction with the Company's unaudited 
financial statements and the related MD&A which are available at 
www.connacheroil.com or www.sedar.com. 
Q3 2013 Highlights: 


    --  EBITDA of $36.8 million, a 54% increase from Q2 2013 ($24
        million)
    --  Bitumen production averaged 11,788 bbl/d
    --  Bitumen netback of $46.57/bbl, a 46% increase from Q2 2013
        ($31.79/bbl)
    --  Funds flow from continuing operations of $16.4 million
    --  Reduced diluent blend ratio ("DBR") to 18% from 20% in Q2 2013
    --  Dilbit sales by rail increased to 90% of total sales from 80%
        in Q2 2013
    --  Commenced steaming new SAGD well pairs at Pod One
    --  Converted infill wells from steam injection to production
    --  Capital expenditures of $35 million

Q3 2013 Financial and Operational Summary

The following summarizes the operating and financial results for the three and 
nine month periods ended September 30, 2013. To properly reflect the 
disposition of Montana Refining Company, Inc. (the "Refinery") and the 
Company's conventional assets in the financial statements, the results 
attributable to the Refinery and conventional assets have been segregated from 
ongoing operations and separately disclosed as "Discontinued Operations".
                                               
                    Three months ended Sept  
                                         30   Nine months ended Sept 30

FINANCIAL ($000       2013          2012                        2012
except per share
amounts)                                         2013

Revenue, net of     122,719         100,829                     289,987
royalties
(continuing
operations)                                    334,652

EBITDA (continuing   36,775          10,118                      29,488
operations) ((1))                               71,860

Funds flow           16,410        (10,432)                    (33,090)
(continuing
operations)( (1))                               12,577

Net earnings (loss) (2,357)        (25,379)                    (68,645)
(continuing
operations)                                   (81,040)

Net earnings (loss)       -          13,697                     (8,657)
(discontinued
operations)                                          -

Net earnings (loss) (2,357)        (11,682)   (81,040)         (77,302)

Per share, basic          -          (0.03)                      (0.17)
and diluted                                     (0.18)

Capital              35,305           4,968                      25,706
expenditures -
continuing
operations                                      83,992

Cash on hand                                    50,982           39,643

Working Capital                                 32,927          110,935

Long-term debt                                 871,254          842,972

Shareholders'                                                   340,869
equity                                         263,025


                Three months ended Sept  
OPERATIONAL                              30   Nine months ended Sept 30 
                  2013          2012         2013           2012 
Average benchmark                                                      
prices                                               
WTI (US$/bbl)      105.83           92.22      98.14            96.22 
Heavy oil         (18.15)         (21.65)    (23.26)          (22.06)
  differential
  ($/bbl)                                     
Western Canada      91.75           70.05      77.19            74.34
  Select ($/bbl)                              
Daily production                                                       
volumes -
continuing
operations                                           
Bitumen (bbl/d)    11,788          11,478     11,920           11,860 
Selected Highlights                                                    
($/bbl)                                              
Dilbit sales       101.16           70.73      85.08            69.18 
Diluent costs      (4.48)         (12.21)     (7.87)          (13.75) 
Realized bitumen    96.68           58.52      77.21            55.43
  sales                                       
Transportation    (24.79)         (20.40)    (22.21)          (14.15)
  and handling
  costs                                       
                  71.89           38.12      55.00            41.28 
Royalties          (5.65)          (2.15)     (3.62)           (2.49) 
Net bitumen         66.24           35.97      51.38            38.79
  revenue                                     
Production and    (19.67)         (20.35)    (20.25)          (18.40)
  operating
  expenses                                    
Bitumen netback -                            
per barrel((1))      $46.57          $15.62     $31.13           $20.39 

(1) A non-GAAP measure, which is defined in the Advisory section of the 


    Company's Management's Discussion and Analysis
    for the periods ended September 30,2013 and September 30, 2012
    ("MD&A"). Bitumen netback is reconciled to net loss in
    the MD&A. EBITDA from continuing operations is reconciled to net
    loss in the MD&A and funds flow from continuing
    operations is reconciled to cash flow from operating activities in
    the MD&A
     

At September 30, 2013, the Company's working capital surplus was $33 million, 
including $51 million of cash on hand. Based on current covenant calculations, 
the Company is able to fully utilize the $95 million under the bank facility. 
The maximum available bank credit line at the end of Q3 2013 is $74 million, 
net of existing letters of credit.

Long term debt, consisting solely of the Company's outstanding Second Lien 
Senior Notes due in 2018 and 2019 (the "Notes"), totaled $871 million. Under 
the note indenture for the Company's Notes, the Company has a first lien debt 
basket that permits the Company to incur first lien debt of up to $170 million 
(inclusive of commitments under the bank facility).

Total capital expenditures during the quarter were approximately $35 million 
($77 million YTD 2013). Capital expenditures of $26 million were incurred in 
Q3 2013 to increase production and decrease operating costs, with the 
remaining $9 million for maintenance expenditures.

Bitumen production at Great Divide averaged 11,788 bbl/day in Q3 2013, up 2% 
from Q2 2013.

Cash flow from operating activities (continuing operations) was $43 million in 
Q3 2013 compared to $21 million in Q2 2013. The increase was primarily driven 
by higher realized pricing and decreased diluent use.

Connacher incurred a net loss of $2.4 million or $nil per share for Q3 2013, 
compared with a net loss in Q2 2013 of $32 million or $0.07 per share.

Operations Update and Outlook

Based upon field estimates, Great Divide production in the month of October 
2013 was 11,800 bbl/day.

Production on Pad 102 is experiencing positive results from the infill wells, 
with Pod One average production in October of 6,200 bbl/d. The SOR for all of 
Pad 102 has been less than 3 since the infills came on production. These 
results highlight Connacher's strategy to match reservoir performance with 
steam capacity. The four new SAGD well pairs at Pad 104 are currently steaming 
and are expected to be converted to SAGD production in late Q4 2013 to early 
Q1 2014.

At Algar, October field estimates for production are 5,600 bbl/d, with rod 
pump conversions on Pad 201 impacting production. SAGD+® process trials will 
continue at Algar until the end of the year on 203-1, with testing focusing on 
optimizing commercial solvent injection rates. We plan to initiate another 
test one of the new well pairs on Pad 104 in Q3 2014.

The 2013 growth capital plan spend is nearing completion. In the third quarter 
growth capital expenditures were $26 million and we expect to spend 
approximately $5 million in the fourth quarter. The total growth capital spent 
in 2013 is approximately $68 million in line with the 2013 plan.

For 2014 the growth capital plan is being finalized and will be provided at a 
later date, as we would like to continue to evaluate the performance of the 
new infill and SAGD wells. Connacher is able to undertake drilling and 
facilities projects throughout the year and is not materially impacted by 
seasonal windows and therefore has the flexibility in the timing of capital 
expenditures.

In the third quarter we moved approximately 90% of our dilbit to markets by 
rail outside Alberta. This is the highest proportion of sales by rail and 
provided strong bitumen netbacks. We will continue to move dilbit by rail to 
markets that offer favorable pricing however the proportion moved by rail will 
vary due to market conditions.

Q3 2013 Conference Call Details

Connacher will host its quarterly conference call on November 14, 2013 at 8AM 
MST. Interested participants can call in to (888) 231-8191. Please use the 
Conference ID# 87705434. Participants are encouraged to call in 5 minutes 
prior to commencement. For those wishing to access the call online, the 
webcast URL is: 
http://event.on24.com/r.htm?e=701364&s=1&k=9A8E7C7926C3AADDC61187364C4C64FA

About Connacher

Connacher Oil and Gas Limited is a focused in situ oil sands developer, 
producer and marketer of bitumen. The Company's principal assets are holdings 
in the Great Divide oil sands project in northern Alberta, south of Fort 
McMurray.

Forward Looking Information

This press release contains forward looking information including the expected 
timing of realizing the production impacts of 2013 capital spending, future 
production and the timing thereof, future exploration and development 
activities, future SAGD+® process trials, the Company's ability to rely on 
the debt basket provided for under the Note Indenture related to the Company's 
existing second lien senior notes and general operational and financial 
performance in future periods.

Forward looking information is based on management's expectations regarding 
the Company's future financial position, the Company's future growth, results 
of operations and production, future commodity prices and foreign exchange 
rates, future capital and other expenditures (including the amount, nature and 
sources of funding thereof), plans for and results of drilling activity, 
environmental matters, business prospects and opportunities and future 
economic conditions. Forward looking information involves significant known 
and unknown risks and uncertainties, which could cause actual results to 
differ materially from those anticipated. These risks include, but are not 
limited to: the 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 and resource estimates, the 
uncertainty of geological interpretations, the uncertainty of estimates and 
projections relating to production, costs and expenses, and health, safety and 
environmental risks), risk of commodity price and foreign exchange rate 
fluctuations, risks associated with the impact of general economic conditions, 
risks and uncertainties associated with maintaining the necessary regulatory 
approvals and securing the financing to proceed with the operation and 
continued expansion of the Great Divide oil sands project.

In addition, reported average production levels may not be reflective of 
sustainable production rates and future production rates may differ materially 
from the production rates reflected in this press release due to, among other 
factors, difficulties or interruptions encountered during the production of 
bitumen.

Additional risks and uncertainties affecting Connacher and its business and 
affairs are described in further detail in Connacher's Annual Information Form 
for the year ended December 31, 2012. Although Connacher believes that the 
expectations in such forward looking information are reasonable, there can be 
no assurance that such expectations shall prove to be correct. The forward 
looking information included in this press release is expressly qualified in 
its entirety by this cautionary statement. The forward looking information 
included herein is made as of the date of this press release and Connacher 
assumes no obligation to update or revise any forward looking information to 
reflect new events or circumstances, except as required by law.





SOURCE  Connacher Oil and Gas Limited 
Chris Bloomer Chief Executive Officer 
Greg Pollard Chief Financial Officer 
Connacher Oil and Gas Limited Phone: (403) 538-6201 Fax: (403) 538-6225 
Suite 900 - 332 6th Avenue SW Calgary, Alberta T2P 0B2 
inquiries@connacheroil.com www.connacheroil.com  
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/November2013/13/c7260.html 
CO: Connacher Oil and Gas Limited
ST: Alberta
NI: OIL ERN CONF  
-0- Nov/13/2013 23:19 GMT
 
 
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