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Contact Exploration Confirms Repeatability of Kakwa Liquids-Rich Montney Development with Second Successful Well

November 5, 2012

(TSX-V:CEX)

CALGARY, Nov. 5, 2012 /CNW/ – Contact Exploration Inc. (“Contact” or the
“Company”) (TSX-V: CEX) is pleased to announce that the second
Contact-operated horizontal Montney well (the “14-30 Well”) has been
successfully completed with a 14 stage water-based nitrogen foam frac. The well was flowed for 96 hours against anticipated gathering system
pressure of approximately 1,100psi. During the final 24 hours of
flow-back the well averaged gross production rates of 974 bbl/d
condensate and 4,970 mcf/d gas, being 1,803 boe/d combined (244 bbl/d
and 1,243 mcf/d, or 450 boe/d combined, net to Contact).  An additional
4 hour flow test was subsequently conducted to provide insight into the
free-flowing initial deliverability of the well, against a final
wellhead pressure of 360 psi, which test resulted in gross rates of
1,324 bbl/d condensate and 6,423 mcf/d gas, being 2,394 boe/d combined.
The 14-30 Well was drilled ahead of schedule and under budget and
completion operations have remained on budget.

The successful drilling and completion of the 14-30 Well confirms that
Contact’s Kakwa lands are in the heart of the liquids-rich Montney
trend, validating the repeatability of this prolific play. Steve
Harding, President and CEO of Contact, commented, “Condensate rates
from the 14-30 Well are right in line with our expectations given that
both the horizontal length of 14-30 Well and its 24 hour production
test volumes are approximately 85% of the horizontal length and test
rates from our first well at 13-17.  However, the 14-30 Well has
surpassed our expectations for overall condensate production, having
flowed more condensate in its 96 hour production test than did the
13-17 well and demonstrating free-flowing well head condensate yields
of 200 bbls/mmcf.  The condensate yields from the 14-30 Well will
surely enhance the economic returns from this already strongly
commercial project.”

The 14-30 Well will now be equipped for production and Contact
anticipates pipeline connection to the Company’s previously built
mainline to be finalized by early 2013.  The 14-30 Well was designed to
allow for the vertical completion and testing of an up-hole Montney
target.  However, given the success of the horizontal test and the
potential risk of compromising wellbore integrity, Contact and its
partners have elected not to complete this uphole Montney zone at this
time. Contact continues to have confidence in this interval and will
plan to test the zone in a future well. The Company is currently
permitting a new well from the same surface location as 14-30, and is
expecting to spud this well by January 2013.

Contact is also pleased to announce that it has acquired at recent Crown
land sales, an additional 8 (eight) 100% working interest sections. 
These newly acquired lands are on trend with and nearby the Company’s
original Kakwa sixteen section block that it operates at a 25% working
interest.  Furthermore, Contact and its partners have acquired ¾ of a
section immediately adjacent to the section upon which the 14-30 Well
was drilled.  With these acquisitions, Contact has added a total of
8.18 net sections of prospective Montney acreage for an average cost of
less than $200 per hectare, such that the Company now holds 12.18 net
sections prospective for Montney development.

The Company advises that although the initial rates from the 14-30 Well
are very encouraging, production test results are not necessarily
indicative of long-term performance or of ultimate recovery from the
14-30 Well.

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 USE OF “BOEs”: “BOEs” may be misleading, particularly if used in isolation. A BOE
conversion ratio of six thousand cubic feet of natural gas to one
barrel of oil equivalent (6 mcf: 1 bbl) is based on an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead.  Given that
the value ratio based on the current price of crude oil as compared to
natural gas is significantly different from the energy equivalency of
6:1, utilizing a conversion on a 6:1 basis may be misleading as an
indication of value.

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 of clean up of frac water
from the Company’s 14-30 Well, utilizing completion techniques on
subsequent wells at Kakwa, plans to vertically test and complete an
up-hole Montney target on future wells, the economic returns from the
14-30 Well and the timing to tie-in the 14-30 Well, 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 Deep Basin
Montney project and the 14-30 Well 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; that the results
of the 24 hour production test will be indicative of the long-term performance of the 14-30 Well or of
ultimate recovery from the well; the ultimate size and scope of any
hydrocarbon bearing formations at the Deep Basin Montney project; that
additional drilling operations in the Deep Basin Montney project,
including at the 14-30 Well, will be successful such that further
development activities in this area is 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.


Source: PR Newswire