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.