(TSX-V:CEX)
CALGARY, Oct. 9, 2012 /CNW/ - Contact Exploration Inc.
("Contact" or the "Company") (TSX-V: CEX) is pleased to announce
that it has successfully drilled its second horizontal Montney well (the "14-30 Well") to a measured
depth of 4,678 metres, including a horizontal leg that remained
within the target interval for its entire 1,230 metre length. The
14-30 well was drilled to total depth ("TD") seven days ahead of
schedule and under budget, having reached TD 17 days faster than
the Company's initial Montney
discovery well at 13-17-63-5W6 (the "13-17 Well").
The 14-30 Well has been logged, cased and
equipped with a packer-style completion system that will facilitate
a fourteen stage nitrogen-based frac with an option to frac an
additional prospective interval above the primary target, also
within the Montney. Contact
is planning to complete and test the well over the next 30 days.
With successful test results, the well will be equipped for
production and tied-in to the Company's newly constructed gas
transportation line by year end. Contact is preparing to drill
another well from the same surface location as the 14-30 Well later
this winter, and is also in the process of licensing additional
locations on its Kakwa acreage.
As previously announced on May 3, 2012, Contact's 13-17 Well (37.5% working
interest Contact before payout, 25% after payout) was successfully
drilled and completed, demonstrating average gross production rates
over the final 24 hours of production testing of 1,150 bbl/d
condensate and 8,290 mscf/d gas, being 2,532 boe/d (431 bbl/d and
3,109 mscf/d, or 950 boe/d combined, net to Contact and before
payout). The Company has finalized construction of the well
site facilities and transportation line, connecting the 13-17 Well
to Pembina's Musreau facility. A series of outages at
downstream liquids processing facilities in Alberta have caused a delay in the start-up of
the 13-17 Well, as new volumes of propane and butane temporarily
cannot be accepted at these facilities. Contact is
investigating alternative solutions for this short-term restriction
and is confident the delay will not affect the overall forecast
economics for the project, which remain exceptional due to the
strong condensate market and improving natural gas prices.
Contact operates the Deep Basin Montney project
and is responsible for 25% of the costs of drilling and completion
of the 14-30 Well and of the pipeline tie-in for the 13-17 Well.
The Company holds a 25% interest in 16 contiguous sections of lands
at Kakwa.
About Contact Exploration Inc.
Contact Exploration Inc. is a public oil and gas
company which has been aggressively pursuing a new core area in
Alberta's "Deep Basin" targeting
the Montney Formation. The Company's philosophy has been to
establish core areas, with a focus on liquids-rich hydrocarbon
accumulations, realizing growth through increased production and
reserve addition.
Historically, Contact was focussed in
Atlantic Canada. Current
exploration and development activities onshore East Coast include
the project areas of Stoney Creek,
Hillsborough and Edgett's Landing
in New Brunswick and participation
through overrides and carried interests in certain regional
unconventional plays in Nova
Scotia and Newfoundland.
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", "anticipate", "continue", "estimate", "may",
"will", "project", "should", "believe", "plans", "intends" 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 and scope of exploration and development
activities on the Company's properties in the Resthaven-Kakwa area
of Alberta, the prospectivity of
the Resthaven-Kakwa area, the petroleum and natural gas reserves
and production that may be encountered through the exploration of
such properties, the timing for completion, testing and tie-ing in
of the 14-30 Well, drilling of additional wells in this area, the
timing to resolve a processing restriction to allow the 13-17 Well
to be produced, the forecasted economics from the 13-17 Well and
the timing of the future development of the Resthaven-Kakwa
prospect through horizontal drilling, 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
Resthaven-Kakwa or Hopewell
prospects 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 Resthaven-Kakwa or
Hopewell; that drilling operations
in Resthaven-Kakwa or Hopewell
will be successful such that further development activities in
these areas are 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, 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
SOURCE Contact Exploration Inc.