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Contact Announces Year End Filings and Filing of Statement of Reserves Data

July 20, 2012

(TSX-V:CEX)

CALGARY, July 20, 2012 /CNW/ – Contact Exploration Inc. (“Contact” or
the “Company”) (TSX-V: CEX) is pleased to announce that it has today filed its audited consolidated
financial statements for the year ended March 31, 2012 and the related
management’s discussion and analysis on the Company’s profile on the
System for Electronic Document Analysis and Retrieval (SEDAR) website
at www.sedar.com.

Year End Summary

Alberta

During the year ended March 31, 2012, Contact acquired a 25% operated
working interest in 16 contiguous gross sections of land in the
prolific Deep Basin at Kakwa, Alberta. Subsequent to the end of the
fiscal year, Contact successfully drilled and completed a horizontal
well in the Montney Formation at Kakwa.  This well tested at 1,150
bbl/d condensate and 8,290 mcf/d gas, being 2,532 boe/d combined (431
bbl/d and 3,109 mcf/d, or 950 boe/d combined, net to Contact and before
payout). In addition to well head condensate, the gas analysis from the
13-17 Well suggests up to an additional 70 bbl/mmcf of natural gas
liquids could be recoverable with access to a deep cut processing
facility. Contact is proceeding with tie in/pipeline work for this well
and is currently licensing its second horizontal well on the Kakwa
property. As this well was completed after the fiscal year end, the
associated reserves are not included in Contact’s reserves evaluation
for the year ended March 31, 2012.

New Brunswick

Contact expanded its oil presence in New Brunswick during the year by
drilling the Hopewell structure. The well encountered thick net pay
with a significant oil presence.  Contact estimates the Hopewell
structure to be more aerially extensive and at least as prospective for
crude oil as the Stoney Creek field.  Contact plans to complete this
well and bring it onto production shortly thereafter. Contact also
extended the exploration leases on all its gas-prone assets in the
Moncton sub-basin for 5 years and all lands with respect to the
Company’s Hopewell project for 2 years.

Fiscal year end March 31, 2011 (Audited)


                                       2012        2011        2010
                                       IFRS        IFRS        Previous
                                       $           $           GAAP
                                                               $

    Revenues (Net of Royalties and tax 3,925,202   1,873,585     1,281,390
    credits)

    Impairment                         (4,126,190)    (26,046)         (-)

    Net Loss:                          (4,013,722) (1,259,103) (1,390,909)

    Loss Per Diluted Share:            (0.027)     (0.011)     (0.022)

    Total Assets                       20,079,933  21,351,163  13,234,353

Highlights from the year ended March 31, 2012 include:

        --  Gross proved oil reserves increased 40% from 319mbbl to
            449mbbl. In the calendar year 2011, the Company produced more
            oil from the Stoney Creek field than had been produced in any
            other year in the field's 102 year history.
        --  The Company secured 16 gross sections of land in the Kakwa area
            of Alberta.
        --  The Hopewell structure was drilled in the Edgett's Landing area
            of New Brunswick successfully encountering the oil prone
            target, within a gross interval greater than 100m thick.
        --  Numerous lease extensions in New Brunswick were granted,
            securing all New Brunswick acreage for between 2 and 5 years.
        --  The Company divested a small Saskatchewan producing asset which
            was no longer cash flow positive, due to high operational
            costs.
        --  Over $2 million in equity financing was obtained.
        --  A new $2.5 million credit facility agreement was agreed upon
            between Contact and its lender.
        --  Contact welcomed Robert Hodgins to its Board of Directors on
            April 25, 2012.  Mr. Hodgins is an independent businessman who
            brings a wealth of financial, business and corporate governance
            skills and experience to Contact's Board.

Statement of Reserves Data

Contact is pleased to report that an independent reserves evaluation
effective March 31, 2012 (the “GLJ Report”) has been completed by its
newly appointed reserves evaluator, GLJ Petroleum Consultants Ltd., in
accordance with the COGE Handbook.  The GLJ Report evaluates the
Company’s Stoney Creek and Hopewell areas only and does not include the
Company’s new core area at Kakwa Alberta.  In this connection, Contact
has today filed on the SEDAR website the following reports for the year
ended March 31, 2012, as required under National Instrument 51-101 -
Standard of Disclosure for Oil and Gas Activities of the Canadian
Securities Administrators:  Form 51-101F1 – Statement of Reserves Data
and Other Oil and Gas Information, Form 51-101F2 – Reports of Reserve
Data by Independent Qualified Reserves Evaluators and Form 51-101F3 -
Report of Management and Directors on Oil and Gas Disclosure.  These
filings can be accessed electronically under Contact’s profile on the
SEDAR website at www.sedar.com.

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”, “continue”, “estimate”, “may”, “will”,
“should”, “believe”, “plans”, “cautions” 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 and the Hopewell prospect, the petroleum and
natural gas reserves and production that may be encountered through the
exploration of such properties and future results from operations 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
additional drilling operations in the Deep Basin Montney or Hopewell projects will be successful such that further development activities in these
areas is 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 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.


Source: PR Newswire