Jurek

With regards to:

“I would suggest to you that using SAGD process you can not extract any barrel of oil from the oil reserves rated as possible or probable. Guessing or counting on probabilities will not do it. You have to have proven (1p) reservoir (POD) with the exact location to drill the wells. If you miss by few meters you are out of luck.”

And

“Let me ask you a question? Is your $20 CLL price target ($10 billion dollars market capitalization) realistic or this is just pumping out of the blue?”

1P, 2P and 3P, as I’ve stated previously, do not relate to specific reservoirs but rather are probabilities relating to the recoverable oil,the more core holes drilled per specific area, the higher the 1P reserves. Connacher’s drilling to date has been to prove 1P reserves for Pod 1 and Algar.There stated objective is to have 50,000 barrels per day of production by 2015.This will probably require additional drilling to further delineate the reservoirs for this added production.

Since only approximately 10% of the potential core hole sites have been drilled and if you take into account that most of those drilled to date were to prove 1P for pod 1 and Algar, this leaves a huge amount of Connacher’s leases undrilled.The net present value of their existing reserves is reported at 2 billion dollars.If you assume that this is just 10% of their potential, Connacher’s real holdings for bitumen could exceed 20 billion dollars or $50 per share.

What I stated previously to Dondon was that his estimate of $20 per share when Connacher achieves their objectives of 50,000 barrels per day was not unrealistic.At $65.00 per barrel WTI, Connacher’s netback for bitumen was reported at $23.94 per barrel.This translates into $1.092 per share.At $120 per barrel WTI, it translates into $2.16 per share.By that time Connacher will also have real capital on the ground in their plants, refinery and infrastructure that should be worth at least a couple of billion dollars as well.So, 10 billion in capitalization should be rather easy to achieveby 2015, and this doesn’t even take into account the huge potential for their share in Petrolifera!

Martin