Contact Exploration Announces New Well in Deep Basin Montney Project

(TSX-V:CEX)

CALGARY, Aug. 22, 2012 /CNW/ - Contact Exploration Inc. ("Contact" or the "Company") (TSX-V: CEX) is pleased to announce that drilling commenced today on the CEX HZ 14-30-63-5W6 well, being the second well drilled by the Company on its Deep Basin Montney lands at Kakwa. The well is targeting the Montney Formation and is located approximately two miles from the Company's initial Montney well, which tested at greater than 2,500 BOE/d. The new well is programmed for a total drilled length of 4,684 metres, including a horizontal leg of 1,200 meters.  Contact operates the well with a 25% working interest.  Contact anticipates that the drilling of this well will be finalized by October 2012, with well completion (stimulation and testing) to be completed by November 2012.  Additionally, the Company confirms that the pipeline construction to tie-in the Company's initial well in the Kakwa area continues, with anticipated construction completion by late September 2012.

About Contact Exploration Inc.

Contact Exploration Inc. is a public company which is currently pursuing a new core area in Alberta's "Deep Basin" targeting the Montney Formation.  Historically, the Company has been focused on Canadian East Coast onshore oil and gas exploration and development. Our philosophy is to operate exploration and development in our core areas of Stoney Creek, Hillsborough and Edgett's Landing, New Brunswick, and Deep Basin, Alberta, and to participate 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 to drill and complete its Montney well in the Kakwa area of Alberta and the timing of completion of the pipeline in the Kakwa area of Alberta, 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 Kakwa prospect 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 Kakwa or; that drilling operations in Kakwa will be successful such that further development activities in this area are warranted; 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 completion of the pipeline in the Kakwa area; 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.