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Press release from CNW Group

Connacher Increases Cash Balances to $120.3 Million on Sale of Latornell Properties and Gran Tierra Shares

Monday, November 28, 2011

Connacher Increases Cash Balances to $120.3 Million on Sale of Latornell Properties and Gran Tierra Shares08:24 EST Monday, November 28, 2011CALGARY, Nov. 28, 2011 /CNW/ - Connacher Oil and Gas Limited (CLL - TSX) announced today that it has increased its cash balances to $120.3 million as of the close of business on Friday, November 25, 2011, principally as a result of the successful sale of its Latornell properties and its shares of Gran Tierra Energy Inc."With our increased cash balances and liquidity-raising initiatives, we remain confident that we will meet all of our 2012 financial obligations, including the repayment of $100 million in convertible debentures due in June 2012," said Richard A. Gusella, Chairman and Chief Executive Officer. "Without diluting our existing shareholders we can reduce debt, deal with any adversities that might arise from weak general economic conditions and properly maintain our valuable oil sands, conventional and refining assets.""Connacher also continues to advance two other liquidity-raising initiatives, a joint venture or sell-down of our Great Divide oil sands project in Alberta and a farm-out or sell-down of our conventional crude oil and natural gas properties at Twining and Penhold, Alberta," added Mr. Gusella. "On conclusion, which we anticipate will now occur next year, these initiatives could result in further debt reduction and an acceleration of growth activities on our assets."Cash Balance UpdateThe latest cash balance represents an increase of $38.6 million, or 47 percent, compared with the company's cash balances of $81.7 million at September 30, 2011. The increase in overall cash balances also includes a contribution from our operations since September 30, 2011. The contribution is partially attributable to stronger crude oil and bitumen prices so far in the fourth quarter of 2011, compared to the most recent quarter.Latornell and GTE UpdateConnacher's Latornell properties were largely undeveloped lands situated in the Deep Basin of northwestern Alberta.   Sayer Securities assisted Connacher in the transactions, which were conducted by way of an auction process.Connacher sold its entire shareholding in TSX-listed Gran Tierra in a series of market transactions.  These shares were received by Connacher in early 2011 when Petrolifera Petroleum Limited was sold to Gran Tierra.About ConnacherConnacher Oil and Gas Limited is a Calgary-based bitumen, crude oil and natural gas producer.  Our primary assets are our Pod One and Algar steam-assisted gravity drainage ("SAGD") in situ oil sands projects at Great Divide in northern Alberta.  We also own developed and undeveloped conventional light gravity crude oil properties in central Alberta at Twining, Penhold, Three Hills and Gilby.  Connacher also owns a profitable heavy crude oil refinery in Great Falls, Montana, U.S.A.Forward Looking InformationThis press release contains forward‐looking information including but not limited to, the ability of the Corporation to meet all of its 2012 financial obligations, the ability of the Corporation to reduce debt, deal with any adversities which may arise as a result of weak general economic conditions and to maintain its assets without diluting its existing shareholders and additional liquidity-raising initiatives being undertaken by the Corporation including the anticipated conclusion thereof and the possible impact such initiatives may have on the Corporation. Forward‐looking information is based on management's expectations regarding future growth, results of operations, production, future commodity prices and foreign exchange rates, future capital and other expenditures (including the amount, nature and sources of funding thereof), plans for and results of drilling activity, environmental matters, business prospects and opportunities and future economic conditions. Forward‐looking information involves significant known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to operational risks in development, exploration, production and start‐up activities; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve and resource estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks; the risk of commodity price and foreign exchange rate fluctuations; risks associated with the impact of general economic conditions; sales volumes and risks and uncertainties associated with securing and maintaining the necessary regulatory approvals and financing to proceed with the continued expansion of the Great Divide oil sands project.  Additional risks and uncertainties are described in further detail in Connacher's Annual Information Form ("AIF") for the year ended December 31, 2010 which is available at www.sedar.com.Although Connacher believes that the expectations in such forward‐looking information are reasonable, there can be no assurance that such expectations shall prove to be correct. The forward‐looking information included in this press release is expressly qualified in its entirety by this cautionary statement. The forward‐looking information included in this press release is made as of November 28, 2011 and Connacher assumes no obligation to update or revise any forward‐looking information to reflect new events or circumstances, except as required by law.For further information: Richard A. Gusella Chairman and Chief Executive Officer OR Peter D. Sametz President and Chief Operating Officer OR Grant D. Ukrainetz Vice President, Corporate Development Phone:  (403) 538-6201             Fax:  (403) 538-6225 inquiries@connacheroil.com       Website:  connacheroil.com