Connacher Announces Q4 2013 and 2013 Year End Results

CALGARY, March 19, 2014 /CNW/ - Connacher Oil and Gas Limited (CLL - TSX; 
"Connacher" or the "Company") today released its financial and operating 
results for 2013, a summary of which is set out below (all amounts are in 
Canadian dollars unless otherwise noted). The quarterly conference call and 
annual general meeting details are provided below. The Company's consolidated 
annual financial statements for the year ended December 31, 2013 and the 
related management's discussion and analysis of the operating and financial 
results can be accessed on Connacher's website at and on 
2013 Highlights: 

        --  Adjusted EBITDA increased 31 per cent to $14.6 million in Q4
            2013 (Q4 2012 - $11.2 million) and increased 112 per cent to
            $86.5 million in 2013 (2012 - $40.7 million). For both periods,
            the increase is attributable to higher bitumen netbacks and
            reduced general and administrative costs, offset by realized
            risk management losses
        --  Q4 2013 funds flow used in continuing operations was $5.7
            million (Q4 2012 - funds flow used $7.8 million). In 2013,
            funds flow from continuing operations was $6.9 million (2012 -
            funds flow used $40.9 million)
        --  Connacher ended the year with a cash balance of $55.6 million
            (2012 - $126.8 million), working capital of $19.6 million (2012
            - $111.7 million which included net proceeds from the sale of
            Montana Refining Inc. and conventional oil and gas assets)
        --  The 2013 capital program was completed within budget and on
            schedule. Capital expenditures of $93.7 million (2012 - $37.1
            million) included $69.7 million focused primarily on four new
            infill wells and four new SAGD well pairs and related
            facilities at Pod One, and $22.6 million for maintenance
            requirements. Q4 2013 capital expenditures totaled $9.7 million
            (Q4 2012 - $11.4 million) mainly for completion of surface
            facilities to tie in the four new well pairs at Pad 104
        --  Full year production averaged 11,783 bbl/d (2012 - 11,881
            bbl/d). Production was slightly below 2012, as the impact of
            our 2013 capital program wasn't realized until the fourth
            quarter of 2013. Q4 2013 production averaged 11,375 bbl/d (Q4
            2012 - 11,945 bbl/d), and was lower due to scheduled
            interruptions during the commissioning of the new well pairs at
            Pad 104 and a temporary reduction in natural gas supply in
            Northern Alberta necessitating a turndown in steam generation
            at Algar. Preventative maintenance was advanced and performed
            during Q4 2013 and also reduced production
        --  Connacher's proved producing reserves as at December 31, 2013
            increased by 13 per cent over the prior year. The Company also
            received reserve recognition in the year end 2013 reserve
            report for the approved commercial SAGD+® process project at
        --  The Company's diverse customer portfolio resulted in net
            realized bitumen prices in 2013 of $53.93 bbl (2012 - $41.35
            bbl) and in Q4 $50.70 bbl (Q4 2012 - $41.55 bbl)

2013 Financial and Operational Highlights

The Company fully exited its downstream refining business and its conventional 
oil and gas business ("Discontinued Operations"), effective October 1, 2012 
and September 14, 2012, respectively. The following highlights focus on the 
financial and operating results of Connacher's continuing oil sands business 
("Continuing Operations").
    ($000 except
    per share
    amounts)          Q4 2013    Q4 2012       %        2013        2012       %
    Revenue, net                                                          
    of royalties
    Operations)       $93,209    $94,959     (2)     427,861    $384,946      11
    (1)                14,609     11,181      31      86,470      40,699     112
    Net earnings                                                          
    Operations)      (41,350)   (40,527)       2   (122,390)   (109,172)      12
    Net earnings                                                          
    Operations)             -     33,360   (100)           -      24,703   (100)
    Net earnings                                                          
    (loss)           (41,350)    (7,167)     477   (122,390)    (84,469)      45
    Per share,                                                            
    basic and
    Operations)(2)     (0.09)     (0.09)       -      (0.27)      (0.24)      13
    Per share,                                                            
    basic and
    (total) (2)        (0.09)     (0.02)     350      (0.27)      (0.19)      42
    expenditures        9,736     11,423    (15)      93,727      37,129     152
    Cash on hand       55,610    126,844    (56)                                
    capital            19,574    111,686    (82)                                
    Long-term debt    890,751    849,938       5                                
    equity            222,022    342,900    (35)                                
    OPERATIONAL       Q4 2013    Q4 2012       %        2013        2012       %
    (bbl/d)            11,375     11,945     (5)      11,783      11,881     (1)
    ($/bbl), net                                                          
    of diluent and
    transportation      50.70      41.55      22       53.94       41.35      30
    (1)      Adjusted EBITDA is a non-GAAP measure, which is defined in the
             Advisory section of the Company's management's discussion and
             analysis for the years ended December 31, 2013 and December
             31, 2012 ("MD&A"). Adjusted EBITDA is reconciled to EBITDA and
             net loss in the MD&A
    (2)      Basic and diluted amounts are the same as options are not


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 reserves. 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.

Please refer to the Company's media release dated February 25, 2014 for 
additional details with respect to the 2013 reserve report and the annual 
information form for 2013 which will be available on Connacher's website at and SEDAR at

2014 Update

During the first quarter of 2014 Connacher successfully completed drilling a 
water disposal well at Great Divide. When operational in late 2014, the water 
disposal well should contribute to decreasing operating costs for Great 
Divide. The Company also commenced drilling the planned nine infill wells at 
Pod One.

Actual Great Divide production averaged 13,661 bbl/d for the first two months 
of 2014.

Shareholders Meeting

The annual meeting of shareholders of the Company is scheduled to be held in 
Calgary at 2 P.M. on May 15, 2014 at the Hyatt Regency Calgary, Alberta. At 
the Meeting, shareholders will be voting on the election of directors and the 
appointment of auditors.

Year End 2013 and Q4 Conference Call Details

Connacher will host its year end 2013 and Q4 conference call on March 20, 2014 
at 8AM (Calgary time). Interested participants can call in to (888) 231-8191. 
Please use the Conference ID# 35536113. Participants are encouraged to call in 
5 minutes prior to commencement.

For those wishing to access the call online, the webcast URL is:

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. 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 21.5 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.

Forward Looking Information

This press release contains forward looking information including but not 
limited to the expectations for future capital expenditures and the funding 
thereof, the timing of the future development of the SAGD+® process 
commercial project and mini-steam expansion at Pod One and the anticipated 
impact thereof, future production and the timing thereof, future well drilling 
and development activities and the timing of production therefrom, 
expectations regarding future commodity prices, future capital expenditures, , 
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, future growth, results of operations, 
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), 
the risk of commodity price and foreign exchange rate fluctuations, risks 
associated with the impact of general economic conditions, risks and 
uncertainties associated with securing and maintaining the necessary 
regulatory approvals and financing to proceed with the operation and continued 
expansion of the Great Divide oil sands project.

Information 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 to 
achieve the future net revenue calculated in accordance with certain 
assumptions. The assumptions relating to the reserves reported herein are 
contained in the reports of GLJ Petroleum Consultants Ltd. December 31, 2013 
and December 31, 2012 and are summarized in Connacher's Annual Information 
Form for the year ended December 31, 2013 and December 31, 2012, both of which 
are available on the System for Electronic Document Analysis and Retrieval 
(SEDAR) at Future net revenues associated with reserves do not 
necessarily represent fair market value.

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 

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, 2013. 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 
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CO: Connacher Oil and Gas Limited
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