Contact Exploration Announces Negotiations for New Brunswick Natural Gas Assets

(TSX-V:CEX)

CALGARY, Oct. 24, 2012 /CNW/ - Contact Exploration Inc. ("Contact" or the "Company") (TSXV: CEX) is pleased to announce that it is currently negotiating with Pieridae Energy Canada ("Pieridae") a participation and earning agreement (the "Proposed Agreement") respecting Contact's New Brunswick natural gas assets. Pieridae is a Canadian energy infrastructure development company that has announced the development, along with RWE Group (being one of Europe's leading integrated energy companies), of a liquefied natural gas ("LNG") export facility (the "Goldboro LNG Facility") in Goldboro, Nova Scotia, Canada.

In addition to setting forth the framework for the funding and joint development of Contact's New Brunswick natural gas assets, the Proposed Agreement is to contemplate that Contact will exclusively manage the operations of any investment made by the partners in the Goldboro LNG Facility with respect to the exploration and development of all potential Canadian on-shore natural gas for the facility.

As announced by Pieridae, the Goldboro LNG Facility is to include a gas liquefaction plant and facilities for the storage and export of LNG, including a marine jetty for off-loading, and upon completion, is expected to ship approximately five million metric tons of LNG per year and have on-site storage capacity of 420,000 cubic metres of LNG. The Goldboro LNG Facility is to be located adjacent to the Maritimes & Northeast Pipeline, a 1,400-kilometre transmission pipeline system built to transport natural gas between Nova Scotia, Atlantic Canada and the North eastern United States. As announced by Pieridae, the Goldboro LNG Facility project is expected to create significant direct and indirect economic benefits for the local community, Provinces of Nova Scotia and New Brunswick and region, with Pieridae anticipating that, at its peak, the Goldboro LNG Facility will create up to 1,500 jobs during construction and 100 full-time, permanent jobs during operations.

Negotiations between Contact and Pieridae respecting the terms of the Proposed Agreement are ongoing and the Company expects the Proposed Agreement to be finalized within the next four weeks.  Contact will provide further details regarding the timing of finalizing and entering into the Proposed Agreement, and the terms and conditions thereof, in due course.

About Contact Exploration Inc.

Contact Exploration Inc. is a public oil and gas company which has a long-term history of operating in Atlantic Canada and has recently demonstrated success in Alberta's liquids-rich Montney Formation tight gas play. For more information, please see the Company's website: www.contactexp.com

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 of Contact negotiating and entering into the Proposed Agreement, the possible future development of Contact's New Brunswick natural gas assets, Contact exclusively managing the operations of any investment made in natural gas development for the Goldboro LNG Facility, the construction, and future capacity, of the Goldboro LNG Facility and the economic benefits of the development and operation of such facility. 

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 that: (i) the Proposed Agreement will be finalized or entered into by Contact; (ii) Contact's New Brunswick natural gas assets will be developed as a result of entering into the Proposed Agreement; (iii), Contact will be entitled to exclusively manage the operations of any investment made in natural gas development for the Goldboro LNG Facility; or (iv) the Goldboro LNG Facility will be completed or, if completed, will have the processing capacity, or will result in the economic benefits, discussed herein.

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, in particular regulatory matters related to the development of the Goldboro LNG Facility; 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.

Steve Harding
President and CEO
Contact Exploration Inc.
Phone: [phone]
Fax: [phone]
Email: [email protected]
www.contactexp.com