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Contact Exploration Provides Operations Update

December 13, 2012

TSX-V:CEX

CALGARY, Dec. 13, 2012 /CNW/ – Contact Exploration Inc. (“Contact” or
the “Company”) (TSX-V: CEX) announces that the first Contact-operated
horizontal Montney well at 13-17-63-5 W6 (the “13-17 Well“) was placed on production on December 1, 2012.  The Company is pleased
to report that during the first seven days of production the 13-17 Well
averaged 200bbls of wellhead condensate/mmcf natural gas.  Contact
expects additional liquids recoveries at the third party gas plant to
add between 30 and 130bbl/mmcf, depending on whether the gas is
processed through the deep cut plant.  On a per production day average
basis, the 13-17 Well flowed gross rates of 750bbl/d condensate and
3.7mmcf/d raw gas during the first week (being 281 bbl/d condensate and
1.4mmcf/d raw gas net to Contact, before payout). Contact notes that
downstream liquids processing bottlenecks have required Contact to
temporarily restrict the productive capacity of the 13-17 Well, as
Contact works with downstream plant operators to manage the substantial
condensate volumes from the well.  Contact also notes that during this
production restricted period, flowing pressures at the 13-17 Well,
being over 20MPa (2,900psi) at the well head, averaged over three times
the line pressure.  Contact holds a 37.5% working interest before
payout and a 25% working interest after payout in the 13-17 Well.  The
Company advises that although the foregoing initial production rates
from the 13-17 Well are very encouraging, these results may not
necessarily be indicative of long-term performance or of ultimate
recovery from the 13-17 Well.

Contact is also pleased to announce that operations to tie-in the second
Contact operated Kakwa Montney well at 14-30-63-5 W6 (the “14-30 Well“) are on schedule.  Contact expects these operations to be finalized
and the 14-30 Well to be on production by early January 2013, subject
to processing capacity being available.  Contact holds a 25% working
interest in the 14-30 Well as well as in all additional wells to be
drilled on the Kakwa joint interest block, going forward.

Also at Kakwa, Contact expects to spud the third Contact operated
Montney well at 3-19-63-5 W6 (the “3-19 Well“) within the next week.  The 3-19 Well is a development well, being
drilled between the 13-17 and 14-30 Wells.  Drilling operations on the
3-19 Well are scheduled to be finished by late February 2013, inclusive
of a break in drilling operations for the Christmas holidays.

New Brunswick Update

As announced by Contact on October 24, 2012, Contact is negotiating with
Pieridae Energy Canada (“Pieridae“), a Canadian energy infrastructure development company, a formal
participation and earning arrangement for the funding and joint
development of Contact’s New Brunswick natural gas assets.  Pieridae
previously announced the development of a liquefied natural gas export
facility in Goldboro, Nova Scotia, Canada. Under the arrangement with
Pieridae, Contact is to exclusively manage the exploration and
development operations of all North American on-shore natural gas
assets that become, going forward, dedicated to providing natural gas
production for the Goldboro facility.  Contact and Pieridae are
currently finalizing the formal, definitive agreements respecting the
project, and Contact expects the agreements to be completed within the
next few weeks.

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 additional liquids recoveries from the
13-17 Well at the third party gas plant, the timing to tie-in the 14-30
Well and for that well to be on production, the timing to spud and
finish drilling operations on the 3-19 Well and the timing to finalize
negotiations with Pieridae regarding the participation and earning
arrangements and the specific terms of that arrangement, 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 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 the Deep Basin
Montney project; that additional drilling operations in the Deep Basin
Montney project 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