UPDATE 1-Connacher stock offering priced at a discount

* Prices offering at C$0.90/shr

* Offering priced at 13 pct discount

* Part of proceeds may be used to fund Algar project

May 27 (Reuters) - Connacher Oil and Gas Ltd (CLL.TO) priced a share offering to raise C$150 million ($134.8 million), a portion of which may be used to fund its Algar oil sands project in northern Alberta.

The company priced an offering of 166.8 million shares at 90 Canadian cents a share, a 13 percent discount to its Wednesday's closing price.

Connacher said the offering will be conducted through a syndicate of underwriters with RBC Capital Markets as sole bookrunner and co-lead manager.

The company said it has agreed to grant the underwriters an over-allotment option to purchase up to an additional 25 million shares.

The company plans to use the net proceeds to fund capital expenditures and for general corporate purposes.

Connacher also said it is in talks with a Canadian chartered bank to secure a revolving working capital facility and a construction loan for its Algar project.

The company said the total capital raised through offerings and facilities should be sufficient to fund the remaining estimated C$200 million of construction costs for the project.

Connacher shares were down 8 cents at 96 Canadian cents in the morning trade on the Toronto Stock Exchange. ($1=1.113 Canadian dollar) (Reporting by R. Manikandan in Bangalore; Editing by Anil D'Silva)