In my view, the recent flow through share offering by Connacher and its announcement yesterday that it has increased the size of the bought deal financing is a good move on Connacher's part in order to access the additional capital needed to conduct a seizmic program which will lead to a lot more core holes being drilled. Many on this board have been upset with Connacher's spending money from the capital budget on items that were not released in the Capital Budget for example, recently buying more shares in Petrolifera to retain Connacher's controlling interest. Connacher is a complex company now and it continually needs money to expand its bitumen reserves, conventional natural gas production to equal its bitumen production, as well as the refinery expansion down the road. But Connacher has already alotted all of the money that it recently raised (through it's doubling its number of shares to 403 million ) to its capital budget for 2009 and 2010. So there are few other places where Connacher can turn to raise the capital needed to expand its exploration program. The bought deal is getting $1.30 per share which is better than the .90 cents per share that Connacher got by doubling its number of shares in August. However, more importantly, Connacher was able to raise $30 million which is not debt which does not have to be paid back to the bank at today's high interest rates. However, the gold lining with this exploration plan is that this is the one way that Connacher can potentially increase its share price in a relatively short period of time. If Connacher is able to drill up a new number of core hole samples over the next 6 months, and it is able to add to its bitumen reserves, this has the possibility of raising Connacher's share price. The time is right to drill up more reserves now as the costs for drilling are now a lot lower then they were at the height of the $140 a barrel oil boom last fall. This is good. Secondly, by increasing Connacher's bitumen reserves this could have a big impact at the beginning of next year 2010 when the SEC in the USA changes the rules to let Oilsands companies book bitumen reserves in the same way that conventional oil companies are permitted to book their existing reserves. With the playing field leveled for the first time early next year in terms of booking bitumen reserves and conventional oil reserves the same way, this will be a shot in the arm to the share prices of oilsands companies. There is a lot less risk as you are aware with bitumen reserves for once they are proven up by the seizmic and core hole drilling they are good for 25 + years, unlike conventional oil reserves which must be constantly replaced by drilling new, increasingly expensive, conventional oil wells in a lot of risky spots in the world with a 30% success rate of hitting a successful conventional well on average. Proving up new reserves lowers the risk for oilsands companies. Now that Connacher has a high debt (to discourage a takeover) it can now expand its reserves in a carefully planned manner which hopefully will have the added benefit of raising Connacher's share price. When Connacher originally drilled it's 128 bitumen core holes around 2005-2006, Connacher had a lot of debt and only a limited amount of daily cash flow from conventional oil and gas production to support the core hole drilling program. It had no daily bitumen production which it does today which is bringing in increasing amounts of cashflow daily. Those of us who have held Connacher shares a long time know that that increase in reserves in the past doubled Connacher's share price in a very short period of time when the GLJ's Petroleum Consultants Reserve Report came out. A new reserve report could increase the share price again.

On another note, shareholders should be happy now that Cameron Todd has been promoted to Senior Vice President of Operations, over the Great Divide and Algar bitumen prodution operations. Now there is a face attached to the 8,000 bbl/day + bitumen production which is incouraging. Finally someone is specifically responsible for increasing daily production. Up to now the entire management team was responsible for daily increases or decreases in bitumen production and there was no accountability. When production went down it was a collective management responsiblity and nothing happened. Nobody individually stood up and was accountable. So shareholders should rejoice at this move by management as it shows us shareholders that management is very concerned about increading daily bitumen production, which many of us have been concerned about for the last 6 months. Management is finally listening to us and is focused on increasing daily bitumen production, and there is hopefully responsibility.

Just a few thoughts today that I had while re reading the last three Connacher press releases.

Best Wishes; Scott