Wednesday, June 22, 2011
Connacher O&G Ltd.
Connacher O&G announced that in conjunction with Alberta Oil Sands ("AOS"), has engaged RBC Rundle to assist in the sale of a 100 percent working interest (held 50 percent by Connacher and 50 percent by AOS) in 38.5 contiguous sections (24,640 acres) of oil sands leases located at Halfway Creek, in the heart of the Athabasca oil sands region in northeast Alberta.
As at December 31, 2010, in aggregate, the Halfway Creek leases have been assigned 154.5 million barrels of best estimate contingent resources and 47.7 million barrels of best estimate prospective resources based on an independent reserve and resource report prepared by GLJ Petroleum Consultants Ltd. ("GLJ"). To date, a total of 32 core holes have been drilled on the Halfway Creek lands and the lease block has been covered by 2-D seismic. Connacher is disposing of its interest in the Halfway Creek leases to allow the company to continue to focus on its Great Divide assets as its core oil sands region. As evaluated by GLJ in a report as at December 31, 2010, Great Divide has the potential for greater than 55,000 bbl/d of bitumen production, based on estimates of proved plus probable plus possible reserves.
Assuming successful completion of the disposition process, the transaction would further fortify Connacher's liquidity position. The disposition is consistent with the company's previously announced five-point strategy for 2011, which includes asset rationalization, production optimization, streamlining its balance sheet, accelerating its evaluation of its conventional resource plays and accelerating the development of its Great Divide oil sands assets through a process to conclude a joint venture.
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