Connacher completes Pod One turnaround

2009-09-28 17:27 ET - News Release

Mr. Richard Gusella reports

CONNACHER OIL AND GAS LIMITED PROVIDES OPERATIONAL UPDATE

Connacher Oil and Gas Ltd. has successfully completed its annual turnaround at its 10,000-barrel-per-day Great Divide Pod One steam-assisted gravity drainage (SAGD) oil sands plant in northeastern Alberta. The company is in the process of restoring normal operations and again ramping up its bitumen production, which had exceeded 8,000 bbl/d prior to the turnaround. The Pod One plant, steam generation and injection, wells, and production were down for a period of four days during the turnaround. All vessels and treater systems were inspected and cleaned out and routine maintenance was conducted. The company also took the opportunity during the turnaround to conduct a number of SAGD well workovers. This work included the installation of one additional electric submersible pump (ESP) and workovers on five wells in the north pad, all part of the company's optimization program aimed at reducing steam-to-oil ratios (SORs), maximizing steam injection to specific wells and the location of steam in the wellbore, while increasing production in the affected wells. The company now has ESPs in six SAGD wells.

Production is now under way at 15 of the 17 SAGD well pairs at Pod One, including production from the company's two most recent SAGD wells, which were converted from steam injection in July of this year and which are still in the early stages of their ramp-up. It takes several days after reactivation to achieve targeted production levels from all wells and once steady state production operations have been achieved, we will report an update on bitumen production at Pod One.

The company anticipates installing two to three new-generation, high-temperature ESPs later this year which should result in longer pump run lives while allowing higher production volumes and reduced SORs. The high-temperature ESPs represent an evolution of ESP technology that has better applicability to Connacher's reservoir. Connacher is pleased to announce that it will be among the first oil sands producing companies to use these new ESPs in commercial operations. It is anticipated bitumen production levels will ramp up to near-design capacity in the fourth quarter of 2009 and 2010 daily average bitumen production is anticipated to be approximately 9,500 bbl/d.

Construction activities at Connacher's second 10,000-barrel-per-day SAGD facility (Algar) in the Great Divide region of northeastern Alberta are progressing with excellent results. Field construction at the Algar plant site resumed on July 7, 2009. At the time construction reactivation occurred, Connacher had estimated a remaining cost of $200-million to complete the project, excluding contingencies of $15-million. With the recent cancellation and deferral of a number of oil sands projects in the Fort McMurray region, the actual costs for labour, services and equipment may end up being lower than the cost estimates used in the Algar reactivation budget, providing a built-in contingency.

The company anticipated that completion of construction activities at Algar and the drilling of the associated 17 SAGD well pairs would take approximately 275 days from the reinstatement of construction. It appears that today the company is modestly ahead of this schedule, without taking into account approximately five days lost due to inclement weather. Construction activities have benefited from generally positive weather conditions since the recommencement of the Algar project in July, 2009. Drilling activity has proceeded in a very efficient manner, with improved engineering processes and technology, supported by the availability of superior hardware and crews compared with the company's experience at Pod One. Once plant construction and drilling and tie-in of the SAGD wells are complete at Algar, anticipated for April, 2010, a 30-day commissioning of the SAGD facility is anticipated. This will be followed by a 90-day steam circulation phase for the SAGD well pairs, prior to commencement of SAGD production and ramp-up toward rated plant capacity of 10,000 bbl/d, by the end of 2010 or early 2011. Connacher posts weekly pictorial progress reports about the Algar project on its website, including pictures of construction activities and a construction countdown clock.

The company's scheduled turnaround at the Great Falls, Mont., refinery is also proceeding favourably regarding timetable and budget, with the restoration of full throughput anticipated for mid-October, 2009. In the meantime, asphalt sales are proceeding favourably at attractive prices. Efforts are under way to capitalize on this strong asphalt market before the normal seasonal slowdown, when the company will further reduce inventories consistent with the restoration of normal refinery throughput.

Assuming no unusual collapse in crude oil prices such as occurred in 2008, Connacher anticipates that the combination of cash ($401-million cash on hand as at June 30, 2009) and future cash flow from operations, before non-cash working capital adjustments, during the second half of 2009 and during fiscal 2010 will be sufficient to fully finance completion of the Algar project, finance its conventional and refining capital activities in 2009 and 2010, finance the construction of an estimated $27-million cogeneration facility at Algar, finance an estimated $10-million dilbit sales transfer line between Algar and Pod One, and service the company's indebtedness through 2010. The company's remaining cash balances and future cash flow, including production from both Pod One and Algar, and funds from its conventional and refining operations, would then be available to service debt and to partially finance the company's growth expenditures during the 2011 to 2015 period, as the company moves toward achievement of its goal of surpassing 50,000 bbl/d of bitumen production in 2015. The company is presently evaluating a new round of core hole drilling on its existing acreage, aimed at further expanding its bitumen reserve and resource base. It also plans to evaluate some modest additional conventional exploration activity on its existing lands in Northern Alberta.

We seek Safe Harbor.

DEE Technically ready to run up 1.49-1.63

Delphi Energy to list 12 million more shares

2009-09-28 18:16 ET - Prospectus Approved

TSX bulletin 2009-1226

An additional 12 million common shares (symbol: DEE) will be listed at the opening on Wednesday, Sept. 30, 2009. The listing will cover common shares to be sold to the public at a price of $1.25 per common share pursuant to the terms of a short-form prospectus dated Sept. 23, 2009. The closing of the offering is expected to occur prior to the opening on Sept. 30, 2009.

Delphi Energy arranges $15-million financing

2009-09-09 17:33 ET - News Release

Mr. David Reid reports

DELPHI ENERGY ANNOUNCES FINANCING

Delphi Energy Corp. has entered into a financing agreement with a syndicate of underwriters, led by National Bank Financial, to issue and sell, on a bought-deal basis, 12 million common shares of Delphi at an issue price of $1.25 each, resulting in gross proceeds of $15-million. The underwriters will have the option to acquire up to an additional 1.2 million common shares at an issue price of $1.25 per common share for additional gross proceeds of up to $1.5-million for total gross proceeds of up to $16.5-million. Proceeds of the offering will be used to finance Delphi's continuing light oil development program in Hythe and additional potential acquisition opportunities. The offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange. Closing is expected to occur on or before Sept. 30, 2009.

Gary Sorenson, wanted for his alleged role in a Ponzi-type scheme that bilked investors of $100 million, has been arrested at Calgary International Ai

Sorenson, 66, was taken into custody as he stepped off a private plane Tuesday, said the RCMP.

Police did not disclose where Sorenson travelled from, other than to say it was from outside Canada. The suspect's last known address was in Honduras, where his company, Merendon Mining Corp., was based.

After being charged with fraud over $5,000 and theft over $5,000, Sorenson was released on bail of either a surety of $300,000 or $150,000 in cash.

A justice of the peace ordered Sorenson to:

* Surrender his Canadian passport and other travel documents.
* Report weekly to the RCMP.
* Remain in Alberta.
* Live at an address approved by the authorities.
* And refrain from communicating with people on a list provided by the RCMP.

"This arrest is an important milestone in our investigation," RCMP Supt. Eric Mattson said Tuesday about what "appears to be the largest Ponzi-type scheme" in Canadian history.

Sorenson is the second Alberta man arrested in the alleged pyramid sales scam in which the original investors are paid off by new investors.

Milowe Brost, 55, was arrested Sept. 13 on the same two criminal charges as Sorenson, which carry a prison sentence of up to 14 years each. He has also been released on bail.
Involved thousands of investors

The pair is accused of bilking 3,000 people in Canada, the U.S. and overseas out of $100 million — and possibly up to $400 million — between 1999 and 2008.

Police said the two men created a business, Syndicated Gold Depository S.A., then formed an agreement to lend money to Merendon Mining with a promise of a high rate of return.

Lured by the promise of high returns, investors were then enticed into offshore shell companies marketed by Brost's firms, Capital Alternatives Inc. and Institute for Financial Learning Group of Companies Inc., said the RCMP.

The shell companies included:

* Asset Trax Inc.
* Quatro Communications Corp.
* Rapid Express Corp.
* Strategic Metals Corp.
* Merendon Mining (Nevada) Inc.

Alberta RCMP are asking anyone who was victimized b

Pescod Says...

CRUDE OIL
$66.62 -0.22

It wasn’t too long ago in the good ole days that every-
one seemed to be talking about peak oil. The world econ-
omy was humming along just beautifully, thank you very
much, and oil was in increasing demand just about every-
where...well, just about everywhere except North America.
Oh! The good ole days!
One of the biggest industries of the time was churning
out books that dwelled on the topic of peak oil and how
sooner or later the world would run out of this stuff and the
price would go to $150, $200, $250 a barrel. Take your pick.
Oh! The good ole days!

I don’t think too many people believe that anytime soon
now. Heck, we might have bought into that theory our-
selves, once upon a time, now I can’t see this peak oil be-
ing believable...even ten or twenty years out doesn’t seem
possible.

Maybe now a person has to play oil and gas
stocks for cycles, price range, seasonal moves, but more
importantly—discoveries.

Last week the New York Times did a feature article enti-
tled “Oil Industry Set the Brisk Pace of New Discoveries”
and points out that almost 10 billion barrels have been dis-
covered in the first six months of this year. The Times
writes, “The oil industry has been on a hot streak this year,
thanks to a series of major discoveries that have rekindled
the sense of excitement across the petroleum sector de-
spite falling prices in tough economies.

These discoveries
spanning five continents are the result of hefty investments
that began early in the decade when oil prices rose and of
new technologies that allow explorers to drill at greater
depths and break tougher rocks.”
The Times continues, “More than 200 discoveries have
been reported so far this year in dozens of countries in-
cluding Northern Iraq’s Kurdish region, Australia, Israel,
Iran, Brazil, Norway, Ghana and Russia. They have been
made by International giants like ExxonMobil, but also by
industry minnows like Tullow Oil.”
As far as their 10 billion barrel number, you could use
much bigger numbers if you consider discoveries made in
the last 12 months or so. The numbers are all over place
for the sub-salt discoveries offshore Brazil, but you could
use numbers as low as 10 billion barrels potential or as
much as 50 billion barrels. New discoveries in the Gulf of
Mexico made recently are in the two to five billion range.
They’ve just made one of the biggest ever natural gas dis-
coveries in Venezuela and projects planned in Venezuela
could add significantly to production.
Then of course there are areas like Kurdistan, where we
don’t doubt there is going to billions if not tens of billions of
new discoveries made over the coming time.

Given that it’s one of the most corrupt places in the
world, and politics are a big problem, one could question
who would ultimately own the prize, but we don’t doubt
discoveries will be made.
At the same time as all these oil discoveries are being
made and we must admit, some of them are going to take
at least $60 oil to see actual production, there have been
immense changes in technology from horizontal drilling to
fracing that is going to make the discovery and the pro-
duction of oil much more efficient and cost effective.
Then of course, there is the story of Wavefront Energy
which we’ve talked about many times in the last four or
five months and is one of our favourite stories. If their
technology works, it is simply going to revolutionize the
oil and gas business and if they can produce an extra 15%
to 20% of the oil out of old oil fields, with tens of billions of
barrels plus that could be found this way, is simply mind-
boggling.
Yes, there might be a peak oil some day, it’s just proba-
bly decades in the future.
Mind you, there are other opinions. Goldman Sachs,
who seems to change their bets on oil prices weekly, is
now suggesting $85 for the end of 2009 from $65 and $95
for the end of 2010.

We caught up with a very busy John Kaiser today and
he’s busy because he’s got one of the hottest hands in the
mining sector. He is the guy that was talking about rare
earths before people even knew what it was, and some of
his picks have absolutely flown.
When we caught up with him today, we were hoping to
get some information on Quest Uranium (QUC), one of his
previous picks was moving today, but he preferred not to
comment.
Meanwhile, for those following Peregrine Diamonds
(PGD) it would be very important to read his comments in
today’s Kaiser Bottom Fishing Report (just go to
info@kaiserbottomfish.com) and heaven forbid, anyone
would listen to a technical analyst for opinions on Pere-
grine rather than someone who knows fundamentals.

But when we ask Kaiser to pick one stock to buy today,
he goes for something right out of left field, a walk on the
wild side and picks International Enexco for their “hot pot”
project in Nevada which is expecting assays shortly, but so
far is coming up with all the rights poisons and work to
date suggests there might be something interesting com-
ing. Kaiser points out the little company has $8 million in
the bank.