Besides the negative news of the production problems that Connacher has been experiencing at POD 1 there is also some positive news. If you look at the new chart on page 5 Connacher seems to indicate where part of the new money that it just raised will go over the next couple of years. For 2009 the chart indicates 10,000 barrels per day of bitumen production and 12,000 barrels per day of conventional oil and gas production.

When we get to 2011 bitumen production has increased to 20,000 barrels per day (with Algar) and conventioal oil and gas production has increased to 20,000 barrels per day.

By 2015 bitumen production is forecast at 50,000 barrels per day and conventional oil and gas is forecast at 50,000 barrels per day. So if one reads between the lines, Connacher will be doing a lot of drilling this winter to increase natural gas and oil production with half of the oil rigs in Alberta presently sitting idle, Connacher should be able to drill a lot of cheap wells this winter of 2009-2010. Also the Alberta governments new incentive plan of reduced royalties on new wells should also benefit Connacher.

However, to the pessimists among us, the numbers provided are basically meaningless in light of POD 1's production forecasts over the last two years.

ON page 30 of the presentation Connacher has a new WTI Hedge. In addition to the two swaps that it already has in place: US$46 bbl on 2500 bbl/d from Feb-'Aug 2009 & US$49.50/bbl on 2500bbl/d from April-Dec 2009

Connacher has also put in place a new costless collar at US$60/bbl by US$84/bbl on 2500 bbl/d from Sept.-Dec 2009.

Best Wishes; Scott