CALGARY, Alberta, Jan. 30, 2013 (GLOBE NEWSWIRE) -- Contact Exploration Inc. ("Contact" or the "Company") (TSX-V:CEX) is pleased to announce that it will be participating in a new non-operated Montney well, immediately adjacent to Contact's existing 25% working interest Kakwa acreage. The operator advises that drilling of this well is expected to commence in mid-February 2013. Contact is to pay 23.75% of the costs of drilling and casing this well to earn an average 23.75% working interest in the Montney Formation in 2.25 gross sections of lands contiguous to Contact's existing Kakwa acreage position, subject to a 5% non-convertible gross overriding royalty on the production from the well. Once earned, Contact will hold 27 gross (12.75 net) sections of Montney acreage at Kakwa.
The first Contact-operated horizontal Montney well (the "13-17 Well") has been on production since December 1, 2012. Various capacity bottlenecks associated with downstream processing restricted December 2012 production from this well. Upon introducing additional condensate handling equipment at the well site on January 4, 2013, the Company has maintained stable gross production averaging 3.8mmcf/d and 575bbl/d well head condensate. Contact has a 37.5% working interest in the 13-17 Well, before payout.
Contact's second operated Montney well (the "14-30 Well") has been successfully tied into downstream processing facilities. In January 2013, the 14-30 Well was flowed for only a brief period, due to the third party gas plant not having capacity for the extremely high levels of free flowing condensate (in excess of 200bbl/mmcf of natural gas) from the well. Contact's third operated Montney well (the "3-19 Well") is being drilled from the same surface location as the 14-30 Well, with drilling on schedule to be finished in mid-February 2013, with completion operations anticipated to be finished by mid-March 2013. Once completion operations on the 3-19 Well are finished, the Company will equip the 14-30 and 3-19 Wells in similar fashion to the 13-17 Well, such that condensate can be separated at location, allowing for flow of natural gas from these wells to the third party facility and for condensate to be trucked directly to the sales point. Contact has a 25% interest in both the 14-30 and 3-19 Wells.
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.
For more information please contact:
President and CEO
Contact Exploration Inc.
Phone: (403) 771-1091
Fax: (403) 695-3915
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 forgoing, this press release contains statements concerning the timing to drill a new non-operated well, the earning by Contact of a working interest upon paying a portion of the costs of drilling the non-operated well, the timing to drill and complete the 3-19 Well, the timing to equip the 14-30 Well and 3-19 Well and the ability of Contact to produce from these wells after equipping, 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; 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 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;rilling 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 requirement; 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, 2012. 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.
CONTACT: Steve Harding
President and CEO
Contact Exploration Inc.
Phone: (403) 771-1091
Fax: (403) 695-3915