Contact Announces Operations Update and Advancement of Shale Gas Assets
(TSX-V: CEX)
CALGARY, Oct 4 /CNW/ - Contact Exploration Inc. ("Contact" or the "Company") (TSX-V: CEX) is pleased to announce that it has commenced mobilization of the Nabors #112 drilling rig to the Stoney Creek oil field and expects that the first horizontal oil well of the Company's drilling program will be spud this week. Contact has received regulatory approval to drill two horizontal wells in the Stoney Creek oil field. Contact anticipates deploying completions equipment shortly after its drilling program concludes.
Contact has recently undertaken a rigorous technical assessment of its unconventional assets to accurately quantify the shale gas prospectivity within the Company's South Stoney Creek lands. Working in conjunction with industry leading experts, analytical testing was conducted to establish the mineralogical and geochemical attributes of the shale gas reservoirs within the block. Xray diffraction, vitrinite reflectance, rock eval pyrolysis and thin section assessments were performed. This data was integrated into a shale gas analysis performed for Contact by a leading oilfield and technical services provider, the results of which confirms shale gas prospectivity within both the Frederick Brook and Hiram Brook Members of the Albert Formation. This analysis was performed on the deepest well on Contact's acreage, drilled in 1985 to a depth of 3013m. The Hiram Brook Member in this well is over 400m thick while the Frederick Brook Member reaches more than 500m thick, with the well still in the Frederick Brook at total depth.
Concurrently, Contact has conducted seismic mapping incorporating proprietary data shot in recent years, to establish the overall geometry and areal extent of the shale gas units on Contact's Stoney Creek acreage. Contact has engaged GLJ Petroleum Consultants Ltd. ("GLJ") to conduct a Petroleum Initially-In-Place Study and Resource Assessment. This independent GLJ assessment will review and incorporate the technical analyses performed to date into a National Instrument 51-101 compliant assessment of the shale gas resource on Contact's South Stoney Creek acreage. It is expected that this GLJ resource assessment will be completed within the next two months.
Contact also advises that it has recently closed a property acquisition that increases its working interest to 100% on all Company lands in South Stoney Creek currently considered potentially prospective for shale gas development.
Contact is extremely encouraged by the results of its technical assessment to date of its unconventional assets in South Stoney Creek. Contact will continue to investigate optimum strategies for developing its shale gas assets and anticipates that these assets will play an ever increasing role in the Company's future. Despite the recent technical analysis by Contact, no assurances can be given that these geological units continue throughout any or all of Contact's Stoney Creek acreage. In addition, because Contact's technical work on its shale gas prospect is in the early stages only, no assurances can be given that commercial volumes of natural gas (or other hydrocarbons) exist within Contact's shale gas acreage or that if such hydrocarbons do exist, that they can be extracted on economic terms, or at all. Contact's further technical and exploration work on this shale gas prospect is subject to many risks and uncertainties, including that Contact will not be able to access the capital required to advance the required technical work and carry out subsequent drilling operations on the prospect, all risks typically associated with drilling operations and the risks that drilling operations will be unsuccessful or that recovery factors will not be commercial.
About Contact Exploration Inc.
Contact Exploration Inc. is a public company with a focus on Canadian East Coast onshore oil and gas production & exploration. Our philosophy is to operate production and exploration in our core area of Atlantic Canada and to participate through overrides and carried interests in certain regional unconventional plays, such as coalbed methane in the Cumberland Basin, shale gas in the Windsor area, and exploration on the west coast of Newfoundland. Contact has onshore interests in Nova Scotia, Newfoundland and New Brunswick which includes the Stoney Creek Field. In addition to the Atlantic Canadian properties, Contact has producing oil assets in south eastern Saskatchewan.
ADVISORY: 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 exploration and development of the Company's properties in the Stoney Creek area of New Brunswick and petroleum and natural gas (including shale gas) reserves or resources that may be encountered through the exploration of such properties. 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, no assurances can be given that the Company's exploration and development activities in the Stoney Creek area of New Brunswick will be successful or that material volumes of petroleum and natural gas reserves or resources will be encountered, or if encountered can be produced on a commercial basis. 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. 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, 2010. 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.
For further information:
Steve Harding
President and CEO
Contact Exploration Inc.
Phone: (403) 234-8663
Fax: (403) 695-3915
Email: [email protected]
www.contactexp.com
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