Connacher Announces Q1 2014 Results

CALGARY, May 14, 2014 /CNW/ - Connacher Oil and Gas Limited (CLL - TSX; 
"Connacher" or the "Company") announces its financial and operating results 
for the quarter-ended March 31, 2014 ("Q1 2014") as outlined below (all 
amounts are in Canadian dollars unless otherwise noted). 
Q1 2014 Highlights: 


        --  Connacher's production for Q1 2014 increased by 8% to 13,433
            bbl/d (Q1 2013 - 12,406 bbl/d). Production increases were
            attributable to the Company's four new well pairs at Pad 104
            and four infill wells at Pod One
        --  Revenue, net of royalties, increased 4% to $105.0 million in Q1
            2014 (Q1 2013 - $101.3 million)
        --  Net realized bitumen sales price increased in Q1 2014 to
            $54.28/bbl (Q1 2013 - $38.31/bbl) due to higher dilbit sales
            prices, decreased diluent usage and lower transportation and
            handling costs
        --  Adjusted EBITDA increased 2% to $10.9 million in Q1 2014 (Q1
            2013 - $10.7 million) due to higher bitumen netbacks, offset by
            higher realized risk management losses
        --  Operating costs increased 42% to $31.6 million in Q1 2014 (Q1
            2013 - $22.4 million) due to higher natural gas prices,
            temporary treating costs arising from the start-up of new SAGD
            well pairs at Pod One and the costs to repair a natural gas
            line leak at Algar
        --  In order to mitigate volatility in natural gas costs, Connacher
            is now hedging 60% of anticipated natural gas consumption for
            the remainder of 2014 and 30% for 2015
        --  Connacher closed Q1 2014 with a cash balance of $19.6 million
            (Q4 2013 - $55.6 million) and available credit facilities of
            $56.9 million (Q4 2013 - $76.7 million), net of cash drawings
            of $10 million (Q4 2013 - $nil) and outstanding letters of
            credit of $28.1 million (Q4 2013 - $18.3 million)
        --  Q1 2014 capital expenditures totaled $18.1 million (Q1 2013 -
            $20.3 million). Q1 2014 expenditures were focused primarily on
            the drilling of six of nine planned new infill wells at Pod
            One. As of May 11, all nine wells have been drilled and will
            begin to impact production in the second half of 2014

Q1 2014 Financial and Operational Summary
                                                                  
    FINANCIAL ($000 except per share                            
    amounts)                                Q1 2014    Q1 2013   % Change
    Revenue, net of royalties              $104,952   $101,320          4
    Adjusted EBITDA (1)                      10,948     10,682          2
    Net earnings (loss)                    (62,613)   (46,566)         34
    Funds flow (used) (1)                  (10,185)    (9,111)         12
    Per share, basic and diluted (total)     (0.14)     (0.10)         40
    Capital expenditures                     18,085     20,251       (11)
    Cash on hand                             19,631     81,714       (76)
    Working capital surplus (deficiency)   (13,726)     76,957      (118)
    Long-term debt                          913,764    861,828          6
    Shareholders' equity                    159,529    296,746       (46)

((1) Adjusted EBITDA and funds flow (used) are non-GAAP measures, which are 
defined in the Advisory section of the Company's management's discussion and 
analysis for the period ending March 31, 2014 )
                                                               
    OPERATIONAL                           Q1 2014   Q1 2013   % Change
    Daily bitumen production (bbl/d)       13,433    12,406          8
    Daily bitumen sales (bbl/d)            12,364    12,679        (2)
    Pricing ($/bbl) (net of diluent and     54.28     38.31         42
    transportation)

First Lien Financing

As previously announced, Connacher has engaged Credit Suisse to act as sole 
lead arranger and bookrunner in the arrangement of a first lien term loan 
facility in an aggregate principal amount of US dollar equivalent of C$140 
million (the "Term Loan Facility"). The Company's intention is to concurrently 
amend and reduce the existing $95 million amended and restated senior secured 
revolving credit facility (the "Credit Facility") to $30 million.

Connacher received unanimous consent from the lenders under the Credit 
Facility on May 2,( )2014 to extend the maturity date from May 31, 2014 to 
July 31, 2014 and to waive the consolidated total debt to total capitalization 
ratio covenant under the Credit Facility at March 31, 2014 and June 30, 2014.

Q1 2014 Conference Call Details

Connacher will host its quarterly conference call on May 15, 2014 at 8AM MDT. 
Interested participants can call in to (888) 231-8191. Please use the 
Conference ID# 27180361. Participants are encouraged to call in 5 minutes 
prior to commencement of the call.

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 steam assisted gravity drainage facilities located on the 
Company's Great Divide oil sands leases near Fort McMurray, Alberta.

Forward Looking Information

This press release contains forward looking information, including but not 
limited to, the expectations relating to the arrangement of the Term Loan 
Facility and the amendment and reduction of the existing Credit Facility and 
the timing thereof .

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:  that the Company may not be successful in the syndication of the 
Term Loan Facility, that the Term Loan Facility may not provide adequate funds 
to fund the Company's growth capital program, 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, 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 
inquiries@connacheroil.com www.connacheroil.com   
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CO: Connacher Oil and Gas Limited
ST: Alberta
NI: OIL ERN CONF  
-0- May/14/2014 23:06 GMT
 
 
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