Contact Announces Interim Filing, Credit Facilities Increase and Operations Update
February 28 2014 - 7:30AM
Marketwired
Contact Announces Interim Filing, Credit Facilities Increase and
Operations Update
CALGARY, ALBERTA--(Marketwired - Feb 28, 2014) - Contact
Exploration Inc. ("Contact" or the "Company") (TSX-VENTURE:CEX) is
pleased to announce that it has today filed its condensed interim
consolidated financial statements for the three and nine month
periods ended December 31, 2013 and the related management's
discussion and analysis ("MD&A") on the Company's profile on
the System for Electronic Document Analysis and Retrieval ("SEDAR")
website at www.sedar.com.
Credit Facility Increase
The Company is also pleased to announce that its senior lender
has increased the amounts available under the Company's credit
facilities to $7.7 million. The amended operating facility has been
increased to $4.5 million and the non-revolving acquisition and
development demand loan has been increased to $3.2 million. No
amounts are currently drawn under either facility.
Operations Update
Contact is currently in the late stages of drilling the Contact
operated well at 02/14- 30 -63-5 W6M ("02/14-30 Well"). This well
was originally programmed to target a bottom hole location of 15-
30 -63-5 W6M, but during drilling it became operationally
advantageous to target a bottom hole location of 14- 30 -63-5 W6M.
The 02/14-30 Well is being drilled in the Upper Montney D4
interval. The Company anticipates that completion operations on the
02/14-30 Well will be finalized in late March 2014. With success,
Contact expects the 02/14-30 Well to be equipped and flowing into
the Company's central compression and condensate stabilization
facility in May 2014. Upon rig release of the 02/14-30 Well, the
Company anticipates spudding a well by mid-March 2014 from a
centrally located pad at 7-19-63-5 W6M, with the intention of
drilling a minimum of two new wells from this surface location
through spring break-up 2014.
Contact's 5-23-63-6 W6M (25% WI) well was brought on production
in early January 2014 and averaged 2.0 mmcf/d (gross) natural gas
production during its first 30 days of production, with an average
field condensate production estimate of 350bbl/d (gross) (being 500
mcf/d and 88bbl/d, or 171 boe/d, net to Contact).
Contact's 16-25-63-6 W6M (25%) well was brought on production in
early February 2014 and has averaged 2.3 mmcf/d (gross) natural gas
production during its first 26 days of production, with an average
field condensate production estimate of 430bbl/d (gross) (being 575
mcf/d and 107bbl/d, or 203 boe/d, net to Contact).
Contact's 16-17-63-5 W5M (25% WI) well was brought on production
in mid-February 2014, which well has experienced production
performance similar to the other Contact wells brought on
production in 2014.
Since bringing its central compressor and condensate
stabilization facility online in mid-January 2014, Contact's
aggregate net production has fluctuated between 500 - 800 boe/d, on
per producing day basis. Contact expects production from its
existing Kakwa wells to stabilize once all early stage operational
matters are addressed in the normal course. Rates will also be
subject to normal production declines, which Contact expects to
offset with production from new wells scheduled to be drilled at
Kakwa.
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", "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 to complete,
equip and tie-in the 02/14-30 Well, the timing to drill up to two
new wells from a pad at 7-19-63-5 W6M, the timing for production
from its existing Kakwa wells to stabilize and the expectation for
production from new wells scheduled to be drilled at Kakwa.
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 and completion
operations in the Deep Basin Montney project will
be successful such that further development activities in this area
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, 2013. 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.
Steve HardingPresident and CEOContact Exploration Inc.(403)
771-1091(403) 695-3915sharding@contactexp.comwww.contactexp.com
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