CALGARY, ALBERTA–(Marketwired – April 7, 2014) – Contact Exploration Inc. (“Contact” or the “Company“) (TSX VENTURE:CEX) is pleased to announce that the seventh Contact-operated horizontal Montney well at 02/14-30-63-5 W6 (the “02/14-30 Well“) (Contact 25% working interest) drilled in the Upper Montney D4 interval has been successfully completed and tested. The well was drilled to a total measured depth of 4,563 metres, with a horizontal leg of 1,068 metres, approximately 200-500 metres shorter than Contact’s other Kakwa wells and the shortest of the Company’s Kakwa horizontal wells drilled to date. The well was completed using a water-based nitrogen foam frac and then tested for approximately 119 hours, flowing up 4.5 inch casing. During the final 24 hours of flow-back the well continued to clean up frac fluid and produced against anticipated gathering system pressure of approximately 1,800 kPa and averaged gross production rates of 1,076 boe/d consisting of 621 bbl/d condensate and 2,734 mscf/d natural gas (155 bbl/d and 684 mscf/d, or 269 boe/d combined, net to Contact).
The 02/14-30 Well is Contact’s first operated well in the uppermost Montney D4 interval. Contact is encouraged by the strong test rates and high ratio of condensate to natural gas production from this interval and the potential for additional development of this interval across its entire East Kakwa land position. Production results from the Upper Montney D4 interval in the 02/14-30 Well have been announced based on the initial production test period given the significance to the Company of having achieved Kakwa development success in an additional Montney interval. As previously announced, Contact expects to release further development drilling production results at Kakwa based on 30 day initial production rates.
The Company advises that although the initial rates from the 02/14-30 Well are very encouraging, production test results are not necessarily indicative of long-term performance or of ultimate recovery from the 02/14-30 Well.
Final well equipping and onsite facilities work will begin immediately to provide for tie-in of production from the 02/14-30 Well into Company-operated infrastructure. Contact anticipates that the 02/14-30 well should be ready for production in early May 2014.
About Contact Exploration Inc.
Contact Exploration Inc. is a public oil and gas company which has a long-term history of operating in Atlantic Canada and has recently demonstrated success in Alberta’s liquids-rich Montney Formation tight gas play. For more information, please see the Company’s website: www.contactexp.com
[expand title=”Advisories & Contact”]ADVISORY ON USE OF “BOEs”: “BOEs” may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 mcf: 1 bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
ADVISORY ON FORWARD-LOOKING STATEMENTS: This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words “expect”, “continue”, “estimate”, “may”, “will”, “should”, “believe”, “plans”, “cautions” and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this press release contains statements concerning the Company announcing the timing for the tie-in of the 02/14-30 Well among others.
Forward-looking statements or information are based on a number of material factors, expectations or assumptions of Contact which have been used to develop such statements and information but which may prove to be incorrect. Although Contact believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Contact can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. In particular, in addition to other factors and assumptions which may be identified herein, no assurances can be given respecting: whether the Company’s exploration and development activities respecting the Deep Basin Montney project will be successful or that material volumes of petroleum and natural gas reserves will be encountered, or if encountered can be produced on a commercial basis; that the results of the 24 hour production test will be indicative of the long-term performance of the 02/14-30 Well or of ultimate recovery from the well; the ultimate size and scope of any hydrocarbon bearing formations at the Deep Basin Montney project; that additional drilling operations in the Deep Basin Montney project, including at the 02/14-30 Well, will be successful such that further development activities in this area is warranted; that Contact’s efforts to raise additional capital will be successful;; that Contact will continue to conduct its operations in a manner consistent with past operations; results from drilling and development activities will be consistent with past operations; the accuracy of the estimates of Contact’s reserve volumes; the general stability of the economic and political environment in which Contact operates; drilling results; field production rates and decline rates; the general continuance of current industry conditions; the timing and cost of pipeline, storage and facility construction and expansion and the ability of Contact to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Contact operates; and the ability of Contact to successfully market its oil and natural gas products.
Further, events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including, without limitation: changes in commodity prices; changes in the demand for or supply of the Company’s products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Contact or by third party operators of Contact’s properties, increased debt levels or debt service requirements; inaccurate estimation of Contact’s oil and gas reserve and resource volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in Contact’s public disclosure documents. Additional information regarding some of these risk factors may be found under “Risk Factors” in the Company’s Management Discussion and Analysis prepared for the year ended March 31, 2013. The reader is cautioned not to place undue reliance on this forward-looking information. The forward-looking statements contained in this press release are made as of the date hereof and Contact undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Steve Harding
President and CEO
Contact Exploration Inc.
Phone: (403) 771-1091
(403) 695-3915 (FAX)
Email: sharding@contactexp.com
www.contactexp.com
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