Press release from CNW Group Connacher Oil and Gas Limited Completes Commissioning and Commences Steam Circulation at its Algar Oil Sands Project Tuesday, May 25, 2010 CALGARY, May 25 /CNW/

- Connacher Oil and Gas Limited ("Connacher") announced today it has completed the commissioning of its central processing and steam generating plant at the Algar oil sands project ("Algar"), on schedule and without any major complications. First steam is being circulated in the seven steam assisted gravity drainage ("SAGD") well pairs on well pad 203. Algar is located within Connacher's principal Great Divide oil sands lease block approximately 80 km southeast of Fort McMurray, Alberta. All of Algar's 17 SAGD well pairs, distributed among three well pads, were drilled, completed and are now prepared to accept steam into the injector and producer well bores. Starting with the SAGD well pairs on well pad 203, each of the well pairs will be brought into circulation on a staged basis, over the next several weeks. Connacher plans to circulate steam into each pair of well bores for approximately 60 to 90 days prior to the planned start-up of bitumen production. The process will be closely monitored to determine the optimum production start-up date, based on individual well response. The Algar project has a design steam generation capacity of 30,000 bbl/d, which, at its forecast long-term target peak operating steam:oil ratio ("SOR") of 3.0, is anticipated to facilitate production of 10,000 bbl/d of bitumen over a project life of more than 25 years. Algar received regulatory approval in 2008 and construction was completed in April 2010. First production is anticipated in the third quarter of 2010. Connacher Oil and Gas Limited is a Calgary-based exploration, development, production, refining and marketing oil company. Our major asset is our interest in the Great Divide bitumen production projects. Pod One, our first 10,000 bbl/d SAGD project, is currently operational. Algar is the company's second 10,000 bbl/d bitumen production project and it was also designed for further expansion, upon receipt of regulatory approvals. We also own conventional crude oil and natural gas production in Western Canada and own and operate a 9,500 bbl/d heavy oil refinery located at Great Falls, Montana and maintain an approximate 19 percent equity stake in Petrolifera Petroleum Limited, a public oil company active in Argentina, Peru and Colombia in South America. Our common shares (CLL - TSX) and our outstanding convertible debentures are listed for trading on the Toronto Stock Exchange.

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Let the steaming begin.

Cheers; Scott