CALGARY, ALBERTA--(Marketwire - Oct. 4, 2010) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Connacher Oil and Gas Limited (TSX:CLL) ("Connacher" or the "Corporation") announces today that it has entered into an agreement with a syndicate of underwriters led by RBC Capital Markets under which Connacher will issue 15,200,000 flow-through common shares ("Flow-Through Shares") on a "bought deal" basis for gross proceeds of approximately $22 million ($1.45 per Flow-Through Share). Connacher has granted the underwriters an over-allotment option to purchase up to an additional 2,280,000 Flow-Through Shares on the same terms and conditions, exercisable in whole or in part up to 30 days following closing of the offering, for aggregate gross proceeds of approximately $25 million. The offering is scheduled to close on or about October 22, 2010.

Connacher will use the gross proceeds from the sale of the Flow-Through Shares to pay exploration expenses on the Corporation's properties which qualify as Canadian Exploration Expenses (as such term is defined in the Income Tax Act (Canada)). It is anticipated that the net proceeds will primarily be used to further delineate and define Connacher's oil sands properties through the drilling of additional core holes and for conducting a three-dimensional (3-D) seismic program over Connacher's oil sands properties. Connacher remains positive about, and committed to, the exploration of its oil sands acreage to enhance its reserve and resource base which is anticipated to support future bitumen production growth.

A preliminary short-form prospectus will be filed with securities regulatory authorities in all provinces of Canada except Quebec. The offering is subject to the approval of such securities regulatory authorities, in addition to approval by the Toronto Stock Exchange.

This press release is not an offer to sell securities or the solicitation of an offer to buy securities in any jurisdiction. Securities may not be offered or sold in the United States absent registration or an applicable exemption from registration.

Connacher Oil and Gas Limited is a Calgary-based crude oil, bitumen, natural gas and natural gas liquids production company. Principal oil sands assets are held in the Great Divide region of Alberta. Conventional production is held in Alberta and Saskatchewan and Connacher also owns and operates a heavy oil refinery in Great Falls, Montana.

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The sale of 15,200,000 flow through common shares on a bought deal basis with an over allotment of 2,280,000 shares will further dilute shareholder's holdings. On the one hand, drilling around 80 more core holes this winter and undertaking a 3D seizmic program, similar to last years is a good thing as increased reserves will add value to the share price as well as the total value of the company. On the other hand, I am not happy with this share sale as it continues to dilute shareholders holdings. I wonder if this has anything to do with the wild volume of shares traded over the last couple of days with the share price staying the same. I don't know. It appears that management believes that the price of Connacher's shares will go up as they have pre sold these shares at "$1.45 per Flow-Through-Share" with a closing date of "about October 22, 2010." So it will be interesting to watch and see if Connacher's shares go to $1.45 a share by October 22. I am getting tired of management continuing to issue more shares as we were told by management on several occassions that Connacher had enough money to get through 2010. I guess the winter drilling plan doesn't fit into this. Connacher management needs to find a partner Now! We need a silent partner with deep pockets to pay off Connacher's debt and to provide development capital. In return for Connacher running the operation and the expansion, the silent partner will be given 25% of yearly future profits. This is the same deal that Penn West Energy just signed. We need a partner now. The longer Connacher management waits to find a partner the worse the deal will be when it is signed. We will end up with a partner, mark my words. The only question is when.

Cheers; Scott