Contact files Q3 results, to finish 02/14-30 well March

Mar 1, 2014

CONTACT ANNOUNCES INTERIM FILING, CREDIT FACILITIES INCREASE AND OPERATIONS UPDATE

Contact Exploration Inc. has filed its condensed interim consolidated financial statements for the three- and nine-month periods ended Dec. 31, 2013, and the related management’s discussion and analysis (MD&A) on the company’s profile on the System for Electronic Document Analysis and Retrieval (SEDAR) website.

Credit facility increase

The company is also pleased to announce that its senior lender has increased the amounts available under the company’s credit facilities to $7.7-million. The amended operating facility has been increased to $4.5-million, and the non-revolving acquisition and development demand loan has been increased to $3.2-million. No amounts are currently drawn under either facility.

Operations update

Contact is currently in the late stages of drilling the Contact-operated well at 02/14-30-63-5 W6M (02/14-30 well). This well was originally programmed to target a bottomhole location of 15-30-63-5 W6M, but during drilling, it became operationally advantageous to target a bottomhole location of 14-30-63-5 W6M. The 02/14-30 well is being drilled in the Upper Montney D4 interval. The company anticipates that completion operations on the 02/14-30 well will be finalized in late March, 2014. With success, Contact expects the 02/14-30 well to be equipped and flowing into the company’s central compression and condensate stabilization facility in May, 2014. Upon rig release of the 02/14-30 well, the company anticipates spudding a well by mid-March, 2014, from a centrally located pad at 7-19-63-5 W6M, with the intention of drilling a minimum of two new wells from this surface location through spring breakup 2014.

Contact’s 5-23-63-6 W6M (25-per-cent working interest) well was brought on production in early January, 2014, and averaged 2.0 million cubic feet per day (gross) natural gas production during its first 30 days of production, with an average field condensate production estimate of 350 barrels per day (gross) (being 500,000 cubic feet per day and 88 barrels per day, or 171 barrels of oil equivalent per day, net to Contact).

Contact’s 16-25-63-6 W6M (25 per cent) well was brought on production in early February, 2014, and has averaged 2.3 million cubic feet per day (gross) natural gas production during its first 26 days of production, with an average field condensate production estimate of 430 barrels per day (gross) (being 575,000 cubic feet per day and 107 barrels per day, or 203 barrels of oil equivalent per day, net to Contact).

Contact’s 16-17-63-5 W5M (25-per-cent working interest) well was brought on production in mid-February, 2014, which well has experienced production performance similar to the other Contact wells brought on production in 2014.

Since bringing its central compressor and condensate stabilization facility on-line in mid-January, 2014, Contact’s aggregate net production has fluctuated between 500 boepd to 800 boepd, on per-producing-day basis. Contact expects production from its existing Kakwa wells to stabilize once all early-stage operational matters are addressed in the normal course. Rates will also be subject to normal production declines, which Contact expects to offset with production from new wells scheduled to be drilled at Kakwa.

http://www.contactexp.com/Press_Release.html