Connacher Reports Year-End 2013 Reserves

CALGARY, Feb. 25, 2014 /CNW/ - Connacher Oil and Gas Limited (TSX: CLL) 
("Connacher" or the "Company") announces its year-end reserves as of December 
31, 2013, as evaluated by GLJ Petroleum Consultants Ltd. ("GLJ"), independent 
qualified reserves evaluators. 
Proved producing reserves increased by 13 per cent to 22.5 million barrels 
with the inclusion of the recently drilled infill wells and well pairs at Pod 
One. Production in 2013 totaled 4.3 million barrels. 
Estimated proved ("1P") bitumen reserves totaled approximately 212 million 
barrels, a decrease of one per cent over year-end 2012 volumes. The ten per 
cent present value ("10% PV") of 1P bitumen reserves is approximately $900 
million as compared to $1.0 billion in 2012. 
Proved and probable ("2P") reserve volumes were approximately 446 million 
barrels of bitumen, down one per cent from a year earlier. The 10% PV of these 
2P bitumen reserves decreased by four per cent to approximately $1.69 billion, 
due to GLJ's estimates for future capital and operating costs, slightly lower 
future commodity prices, and the timing of the Algar expansion. 
Connacher has been successfully piloting the SAGD+® process for three years. 
Based on its success and recent AER regulatory approvals for a commercial 
project, GLJ assigned 2P reserves at Algar reflecting implementation of that 
process in addition to steam-assisted gravity drainage ("SAGD").  A commercial 
project of the SAGD+® process at the Algar facility is planned for 2015. Pod 
One and the Algar expansion areas do not have SAGD+® process reserves 
assigned at this time. These areas are assumed to continue to have infill 
wells in addition to SAGD in the 2P reserves category. 
Connacher's first SAGD project at Great Divide, Pod One, has been producing 
bitumen since late 2007, with commercial production commencing March 1, 2008. 
Algar commenced producing bitumen in August 2010 and commerciality was 
achieved October 1, 2010. Production from Great Divide since startup through 
December 31, 2013 has totaled approximately 21.3 million barrels of bitumen. 
Such amounts have been deducted from earlier estimates of proved reserves 
prior to the calculation of reserves as at December 31, 2013. 
Unless otherwise stated, reserves refer to reserves of bitumen. Future net 
revenue is calculated after the deduction of forecast royalties, operating 
expenses, estimated future capital expenditures and well abandonment costs, 
but before corporate overhead or other indirect costs, including interest and 
income taxes, from forecast revenue. Certain amounts cited herein have been 
rounded for presentation purposes. Outstanding financial hedges were not 
included in the evaluation. The GLJ December 31, 2013 report ("Year-End 2013 
Report") was prepared utilizing the GLJ January 1, 2014 price forecast, 
effective December 31, 2013. Readers are referred to the notes to the Summary 
Tables included in this press release for details regarding the price forecast 
used by GLJ. Earlier reports were prepared using the price forecasts then 
being applied by GLJ. Future net revenues disclosed herein do not represent 
fair market value. Also, estimations of reserves and future net revenue 
discussed in this press release constitute forward looking information. See 
"Forward Looking Information and Reserves Advisory" below. 
The Year-End 2013 Report was prepared using assumptions and methodology 
guidelines outlined in the Canadian Oil and Gas Evaluation Handbook ("COGE 
Handbook") and in accordance with National Instrument 51-101 ("NI 51-101"). 
Comparisons provided herein with respect to Connacher's bitumen reserves and 
for 10% PV for December 31, 2013 are to estimates contained in the report, 
prepared by GLJ, with an effective date of December 31, 2012 ("Year-End 2012 
Additional details regarding Connacher's projects and development 
opportunities at Great Divide can be accessed at or Furthermore, additional information regarding Connacher's 
reserves and resources, including the Company's interest in the resources and 
the risks and the level of uncertainty associated with the recovery of the 
resources, can be found in the Company's annual information form ("AIF") dated 
March 27, 2013. This AIF can be accessed at The Company will be 
filing an updated AIF later this year and prior to March 31, 2014, once it has 
completed the audit of its financial and operating results for the year-ended 
December 31, 2013 and has released them to the public. 
Detailed information included in the Year-End 2013 Report regarding 
Connacher's bitumen reserves and associated present values are set forth in 
the tables below, including a comparison of year-end 2013 results to year-end 
2012 results. 
Summary Tables 
Amounts are presented are working interest volumes which are the Company's 
working interest (operating or non-operating) share before deducting royalties 
and without including any royalty interests of the Company. 

    |Bitumen Reserves (thousand bbls)                     |
    |                                 |31-Dec-12|31-Dec-13|
    |Proved Producing                 |   19,931|   22,525|
    |Total Proved Reserves (1P)       |  214,009|  212,063|
    |Probable                         |  237,393|  234,314|
    |Proved and Probable Reserves (2P)|  451,402|  446,377|
    |Proved, Probable & Possible (3P) |  569,303|  564,045|
    |10% Present Value of Future Net Revenue         |
    |Bitumen Reserves - Before Tax                   |
    |                                  |Dec-12|Dec-13|
    |                                  |$MM   |$MM   |
    |Proved Producing                  |   320|   401|
    |Total Proved Reserves (1P)        | 1,009|   900|
    |Probable                          |   749|   794|
    |Proved and Probable Reserves (2P) | 1,758| 1,694|
    |Possible                          |   686|   726|
    |Proved, Probable and Possible (3P)| 2,444| 2,420|
    |                              |Before Tax Present Value ($MM)|
    |                              |    0%|   5%|   8%|  10%|  12%|
    |Proved Producing              |   513|  450|  420|  401|  384|
    |Total Proved                  | 3,458|1,657|1,135|  900|  723|
    |Proved plus Probable Producing|   765|  657|  605|  574|  547|
    |Total Proved plus Probable    | 8,682|3,503|2,225|1,694|1,316|
    |Total PPP                     |12,928|5,015|3,170|2,420|1,891|

    1. Proved Reserves are those reserves that can be estimated with a high
       degree of certainty to be recoverable. It is likely that the actual
       remaining quantities recovered will exceed the estimated proved
    2. Probable Reserves are those additional reserves that are less
       certain to be recovered than proved reserves. It is equally likely
       that the actual remaining quantities recovered will be greater or
       less than the sum of the estimated proved plus probable reserves.
    3. Possible Reserves are those additional reserves that are less
       certain to be recovered than probable reserves. It is unlikely that
       the actual remaining quantities recovered will exceed the sum of the
       estimated proved plus probable plus possible reserves. There is a 10
       per cent probability that the quantities actually recovered will
       equal or exceed the sum of proved plus probable plus possible
    4. Pricing assumptions in the Year-End 2013 Report were as follows:
       US$/CDN$ exchange rates were 1.0 in the Year-End 2012 Report and
       0.95 in the Year-End 2013 Report.
    |    |         |        |NYMEX WTI| Light  | WCS @  |Edmonton| AECO  |
    |Year|Inflation|Exchange| Current | Sweet  |Hardisty|Pentane | Spot  |
    |    |    %    |  Rate  | US$/bbl |Edmonton| C$/bbl |  Plus  |Current|
    |    |         |        |         | C$/bbl |        | C$/bbl |C$/Mscf|
    |2014|      2.0|   0.950|    97.50|   92.76|   75.60|  105.20|   4.03|
    |2015|      2.0|   0.950|    97.50|   97.37|   79.36|  107.11|   4.26|
    |2016|      2.0|   0.950|    97.50|  100.00|   81.50|  107.00|   4.50|
    |2017|      2.0|   0.950|    97.50|  100.00|   81.50|  107.00|   4.74|
    |2018|      2.0|   0.950|    97.50|  100.00|   81.50|  107.00|   4.97|
    |2019|      2.0|   0.950|    97.50|  100.00|   81.50|  107.00|   5.21|
    |2020|      2.0|   0.950|    98.54|  100.77|   82.13|  107.82|   5.33|
    |2021|      2.0|   0.950|   100.51|  102.78|   83.76|  109.97|   5.44|
    |2022|      2.0|   0.950|   102.52|  104.83|   85.44|  112.17|   5.55|
    |2023|      2.0|   0.950|   104.57|  106.93|   87.14|  114.41|   5.66|
    5. Tables may not add due to rounding.

Forward Looking Information and Reserves Advisory

This press release contains forward looking information, including but not 
limited to estimated reserves and future net revenues associated therewith and 
the proposed timing of the release of the Company's Annual Information Form 
for the year ended December 31, 2013. The forward looking information is based 
on current expectations that involve a number of risks and uncertainties, 
which could cause actual results to differ materially from those anticipated. 
These 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 associated with geological interpretations; 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, risks associated with the 
implementation of new technology, risks associated with obtaining, maintaining 
and the timing of receipt of regulatory approvals, permits, and licenses, 
uncertainties relating to access to capital markets and the risk of volatile 
global economic conditions. Additional risks and uncertainties are described 
in the Company's Annual Information Form which is filed on SEDAR at

This press release includes information pertaining to the reserves and the 
value of future net revenue of the Corporation as at December 31, 2013 and 
December 31, 2012 as evaluated by GLJ in its reports dated February 24, 2014 
and February 15, 2013, respectively (together the "GLJ Reports"). Statements 
relating to reserves are deemed to be forward looking information, as they 
involve the implied assessment, based on certain estimates and assumptions, 
that the reserves described exist in the quantities predicted or estimated, 
and can be profitably produced in the future. The GLJ Reports are based on a 
number of assumptions relating to factors such as initial production rates, 
production decline rates, ultimate recovery of reserves, timing and amount of 
capital expenditures, marketability of production, future prices of bitumen, 
operating costs, anticipated reductions in SORs and operating costs as a 
result of installation of pumps in certain wells to improve productivity, well 
abandonment and salvage values, royalties and other government levies that may 
be imposed during the producing life of the reserves. Moreover, there is no 
assurance that the forecast price and cost assumptions contained in the GLJ 
Reports will be attained and variances could be material.  The reserves 
estimates of Connacher's properties described herein are estimates only. The 
actual reserves on Connacher's properties may be greater or less than those 
calculated. The present value of estimated future net revenues referred to 
herein should not be construed as the fair market value of estimated bitumen 
reserves attributable to Connacher's properties.

Due to the risks, uncertainties and assumptions inherent in forward looking 
information, prospective investors in the Company's securities should not 
place undue reliance on forward looking information. Forward looking 
information contained in this press release is made as of the date hereof and 
are subject to change. The Company assumes no obligation to revise or update 
forward looking information to reflect new circumstances, except as required 
by law.

About Connacher

Connacher is a Calgary-based in-situ oil sands developer, producer and 
marketer of bitumen. The Company holds a 100 per cent interest in 
approximately 450 million barrels of proved and probable bitumen reserves and 
operates two SAGD facilities located on the Company's Great Divide oil sands 
leases near Fort McMurray, Alberta.

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 
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CO: Connacher Oil and Gas Limited
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