The central compression and condensate stabilization facility located at 16-7-63-5W6 (“16-7 Facility”) was fully constructed and commissioned in early January 2014. The 16-7 Facility is being used to compress natural gas from the Contact-operated Kakwa area wells for transportation to a third party gas plant, as well as to stabilize and store condensate prior to trucking liquids to sales off-take facilities. The 16-7 Facility was designed to initially handle up to 2,500 bbls/d of condensate and 15MMcf/d natural gas, with additional capacity being able to be added as required. Contact anticipates that expansion of the 16- 7 Facility will be required to handle forecast production growth and the Company has begun planning for doubling the capacity of the facility by spring 2015.


Subsequent to the fiscal 2014 year end the Company has drilled 3 additional wells in an ongoing operation that persisted through spring breakup. These wells were drilled to a horizontal length of approximately 1.5 miles, almost 50% longer than Contact’s first 8 wells, and yet the time to drill two of these wells was slightly faster than the best one mile well drilled. Each of these wells are scheduled to be fractured and tested over the coming weeks, following which they will be brought into production.


One of the operated wells drilled during fiscal 2014 targeted the Upper Montney D4 unit, which the Company also believes to be prospective. The well encountered a condensate-rich natural gas bearing reservoir, with very high liquid levels (both condensate and water ratios appear to be about 50% greater than our  average Middle Montney/D2 wells). Elevated liquids have encouraged artificial lift technology to be investigated on this well to manage ongoing production. A successful test was conducted and Contact is currently looking to install artificial lift on this operated D4 well in the fall of 2014. Contact previously participated in a non-operated well from the D4 interval at 14-2-63-6W6. We remain very encouraged by the results of this zone and anticipate both reserves and production growth from this interval as the East Kakwa project matures.


Maintaining a focus on growth, the financing completed by Contact in June 2014 has enabled us to accelerate operational activity at East Kakwa and increase the net present value of the asset. A second rig was secured under contract, effectively doubling the number of wells that can be drilled in a given time frame. Contact now anticipates drilling between 12 and 15 wells within the current fiscal year.


Stepping beyond East Kakwa, Contact now holds a Deep Basin acreage position consisting of mineral rights in an additional 61 - 100% sections with Montney prospectivity. In addition to these Montney rights, the Company also holds the shallow rights on 31 of these sections with an additional 6 sections with shallow rights only being held. Excellent prospectivity is seen on these lands as well, from which 2 locations have already been identified and surveyed for drilling operations. In fiscal 2014, competitor activity increased around much of this acreage which is assisting in the de-risking of Contact’s acreage.


Turning to the Company’s East Coast projects, Contact’s focus was on its engagement with Pieridae Energy Ltd. (“Pieridae”), the Canadian energy infrastructure development company that has announced the development of a liquefied natural gas (“LNG”) export facility in Goldboro, Nova Scotia, Canada. This LNG project continues to move forward strongly, with Pieridae having successfully secured a major offtake partner in E.ON, Europe’s largest utility, and securing the required environmental permits to advance the project in Nova Scotia. Contact has also been working within the regulatory process, seeking permits for 2 vertical exploratory wells within our leasehold in the Moncton Sub-basin of New Brunswick. Pieridae has committed that they will fund each of these wells at 100% up to $15.4M to earn a 50% interest in approximately 33 sq. miles of prospective acreage. Contact will continue to provide support to Pieridae and has extended the initial phase of engagement, including the funding deadline, to January 31, 2015.


Contact’s oil assets in Atlantic Canada, at both Stoney Creek and Hopewell, are of significant value to the Company. Stoney Creek continues to perform very well, with an average production of about 40-45 bbl/d. We anticipate conducting operational activity at both Stoney Creek and Hopewell, once equipment has been mobilized for the Pieridae project.


The current activities of the Company are focused towards business growth. Contact is accelerating drilling at East Kakwa and looking to expand operations into one or more of our other assets in the Deep Basin, based not only our technical work, but the well results of competitors drilling around us. In Atlantic Canada we will continue to work with Pieridae to secure natural gas supply, both from our held acreage and potentially other sources, as the LNG project at Goldboro advances. Strong performance from the oil wells drilled to date in New Brunswick has encouraged additional drilling and completion of wells on these properties, likely to be undertaken concurrent with the expected drilling of the Pieridae wells.


On behalf of the Board of Directors,

Steve Harding

President / CEO

July 23, 2014

 

President’s Message

 

Contact Exploration Inc.
Suite 1520, 700 6th Ave. SW
Calgary, AB, Canada T2P 0T8

Ph:   1 (403) 234-8663
Fax: 1 (403) 695-3915

NEWS RELEASE

Contact Exploration Announces Participation in New Acreage Well; Provides Montney Operations Update

January 29, 2013 (Calgary, Alberta) Contact Exploration Inc. (“Contact” or the “Company”) (TSX-V: CEX) is pleased to announce that it will be participating in a new non-operated Montney well, immediately adjacent to Contact’s existing 25% working interest Kakwa acreage. The operator advises that drilling of this well is expected to commence in mid-February 2013. 

NEWS RELEASE

Contact Exploration Announces Filing of Third Quarter Results and Increased Credit Facilities

February 28, 2013, (Calgary, Alberta) Contact Exploration Inc. (TSX-V: CEX) announces that it has filed its unaudited Condensed Interim Consolidated Financial Statements for the three and nine month periods ended December 31, 2012 and the related Management’s Discussion and Analysis on www.sedar.com

NEWS RELEASE

Contact Exploration and Pieridae Energy Announce Partnership to Focus on Natural Gas Production for LNG Export 

March 4, 2013, (Calgary, Alberta) Contact Exploration Inc. (“Contact”) (TSX-V: CEX) and Pieridae Energy Limited (“Pieridae”) are pleased to announce the creation of a new natural gas-focused exploration and production entity – Pieridae Production Limited Partnership (“PPLP” or the "Partnership”).

PPLP has been formed by Pieridae and Contact to source, develop and produce natural gas to serve as significant portion of the feedstock for Pieridae’s proposed Goldboro LNG Terminal in Guysborough, Nova Scotia.

NEWS RELEASE

Contact Exploration Inc.Issues Incentive Options

March 8, 2013, (Calgary, Alberta)

Contact Exploration Inc. ("Contact" or the "Company") (TSX-V: CEX) announces that it has issued a total of 2,850,000 stock options to employees, executive officers and directors of the Company in accordance with the Company's shareholder approved stock option plan. The stock options are exercisable at a price of $0.24 per share, expire in five years and vest immediately. 

NEWS RELEASE

Contact Exploration Continues Success with Kakwa Liquids-Rich Montney Development

March 21, 2013, (Calgary, Alberta) Contact Exploration Inc. ("Contact" or the "Company") (TSX-V: CEX) is pleased to announce that the third Contact-operated horizontal Montney well (the "3-19 Well") has been successfully completed and tested. The well was flow-tested for 161 hours. During the final 24 hours of flow-back the well averaged gross production rates of 1,798 boe/d consisting of 826 bbl/d condensate and 5,833 mscf/d gas (207 bbl/d and 1,458 mscf/d, or 450 boe/d combined, net to Contact) against anticipated gathering system pressure of approximately 5,000 kPa.

NEWS RELEASE

Contact Exploration Announces Long-term Customer Signed by Pieridae Energy for Goldboro LNG Project

June 3, 2013, (Calgary, Alberta) – Contact Exploration Inc. (“Contact” or the “Company”) (TSX-V:CEX) is pleased to announce that Pieridae Energy (Canada) Ltd. (“Pieridae”) has entered into a long-term sales agreement with E.ON Global Commodities SE ("E.ON"), a subsidiary of E.ON SE, and one of the world's largest investor-owned power and gas companies, for the purchase of liquefied natural gas ("LNG") from the Goldboro LNG project being developed by Pieridae in Nova Scotia, Canada. Under the agreement, Pieridae is to deliver approximately 5 million tons per annum ("MTPA") of LNG to E.ON for 20 years into a number of locations in Western Europe.

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NEWS RELEASE

Contact Reserves Increase by 320% in Fiscal 2013

July 2, 2013, (Calgary, Alberta) Contact Exploration Inc. ("Contact" or the "Company") (TSX-V: CEX) is pleased to report that independent reserves evaluations effective March 31, 2013 have been completed by the Company's reserves evaluators in accordance with the COGE Handbook. GLJ Petroleum Consultants Ltd. ("GLJ") evaluated the Company's Stoney Creek and Hopewell properties in New Brunswick, while McDaniel and Associates Consultants Ltd. ("McDaniel") evaluated the Company's core area at Kakwa, Alberta.

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NEWS RELEASE

Contact Exploration Provides Upper Montney Operations Update

July 24, 2013 (Calgary, Alberta) Contact Exploration Inc. ("Contact" or the "Company") (TSX-V: CEX) is pleased to announce that its 23.75% non-operated 14-2-63-6 W6M Kakwa Montney well (the "14-2 Well") has been successfully completed within the upper interval of the Montney Formation. This interval had not previously been tested by Contact; however, other operators have demonstrated repeated success in this interval within the Kakwa/Resthaven trend. The 14-2 Well has been flow-tested by the operator for a total of 191 hours, including the final 98 hours with tubing in hole. 

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NEWS RELEASE

Contact Announces Private Placement

July 25, 2013, (Calgary, Alberta) – Contact Exploration Inc. ("Contact" or the "Company") (TSX-V:CEX) is pleased to announce its intention to complete a brokered private placement of up to 12,500,000 common shares (the "Shares") of the Company, at a price of $0.26 per Share, and up to 5,833,334 Shares to be issued on a "flow-through" basis pursuant to the Income Tax Act (Canada) (the "Flow-Through Shares"), at a price of $0.30 per Flow-Through Share, for aggregate gross proceeds of up to $5,000,000 (the "Private Placement").

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NEWS RELEASE

Contact Announces Increase to Previously Announced Private Placement

August 1, 2013, (Calgary, Alberta) – Contact Exploration Inc. ("Contact" or the "Company") (TSX-V:CEX) is pleased to announce that due to demand from potential investors, it has increased the size of its previously announced brokered private placement, to be conducted on a commercially reasonable "best efforts” agency basis through a syndicate of agents led by Integral Wealth Securities Limited and including Dundee Securities Corp., MGI Securities Inc. and Beacon Securities Ltd.

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NEWS RELEASE

Contact Announces Approval of Advance Notice By-law

August 2, 2013, (Calgary, Alberta) – Contact Exploration Inc. ("Contact" or the "Company") (TSX-V:CEX) is pleased to announce that the board of directors (the "Board") of Contact has approved amendments to the Company's standard by-laws. The amendments include certain housekeeping amendments to update the by-laws to current standards, as well as the adoption of an advance notice by-law (the "Advance Notice By-law").

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NEWS RELEASE

Contact Announces Closing of Private Placement

August 8, 2013, (Calgary, Alberta) Contact Exploration Inc. ("Contact" or the "Company") (TSX-V: CEX) is pleased to announce that it has closed its previously announced brokered private placement (the "Private Placement") pursuant to which it has issued 14,009,616 common shares ("Common Shares") of the Company at a price of $0.26 per Common Share and 9,495,000 Common Shares issued on a "flow-through" basis pursuant to the provisions of the Income Tax Act (Canada) (the "Flow-Through Shares") at an issue price of $0.30 per Flow-Through Share for aggregate gross proceeds of $6,491,000.00 (the "Private Placement").

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NEWS RELEASE

Contact Announces Interim Filings 

August 27, 2013, (Calgary, Alberta) Contact Exploration Inc. ("Contact" or the "Company") (TSX-V:CEX) is pleased to announce that it has today filed its condensed interim consolidated financial statements for the three months ended June 30, 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.

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NEWS RELEASE

Contact Exploration Inc. Issues Incentive Options  

September 5, 2013, (Calgary, Alberta) Contact Exploration Inc. (the "Company") (TSX-V: CEX) announces that it has issued a total of 1,100,000 stock options to certain employees and consultants of the Company in accordance with the Company's shareholder approved stock option plan. The stock options are exercisable at a price of $0.20 per share, expire in August 2018 and vest immediately.

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NEWS RELEASE

Contact Exploration Provides Operations Update  

September 9, 2013, (Calgary, Alberta) Contact Exploration Inc. (“Contact” or the “Company”) (TSX-V: CEX) is pleased to announce that the fourth Contact-operated Kakwa Montney well, at 5-23-63-6 W6M (the ”5-23 Well") has been successfully drilled horizontally to a total measured depth of 5017 meters. The 5-23 Well included a planned vertical stratigraphic penetration, whereby a full suite of logs throughout the Montney Formation was acquired and full diameter core data through the Upper and Middle Montney intervals was retrieved, allowing Contact to further calibrate the 5-23 Well and the other wells in the area.

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NEWS RELEASE

Contact Exploration Continues Success with Kakwa Liquids-Rich Development

October 16, 2013, (Calgary, Alberta) Contact Exploration Inc. (“Contact” or the “Company”) (TSX-V: CEX) is pleased to announce that the fourth Contact-operated horizontal Montney well at 5-23-63-6 W6 (the "5-23 Well") (Contact 25% working interest) has been successfully completed and tested. The well was flow-tested for approximately 170 hours. During the final 24 hours of flow-back the well produced against anticipated gathering system pressure of approximately 2,000 kPa and averaged gross production rates of 1,433 boe/d consisting of 815 bbl/d condensate and 3,704 mscf/d natural gas (204 bbl/d and 920 mscf/d, or 358 boe/d combined, net to Contact)...

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NEWS RELEASE

Contact Announces Interim Filings and Land Acquisitions

November 27,2013, (Calgary, Alberta) Contact Exploration Inc. (‘’Contact’’ or the ‘’Company’’) (TSX-V:CEX) is pleased to announce that it has today filed its condensed interim consolidated financial statements for the three and six month periods ended September 30, 2013 and the related management’s discussion and analysis on the Company’s profile on the System for  Electronic Document Analysis and Retrieval  website at www.sedar.com  ...

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NEWS RELEASE

Contact Exploration Announces Private Placement of Flow-Through Common Shares

December 26, 2013, (Calgary, Alberta) Contact Exploration Inc. (“Contact” or the “Company”) (TSX-V: CEX) announces that it is carrying out a non-brokered private placement (the "Private Placement") of common shares in the capital of the Company, to be issued on a "flow-through" basis pursuant to the Income Tax Act (Canada) ("Flow-Through Shares"). Contact expects to issue up to 5,555,556 Flow-Through Shares in the Private Placement, at a price of $0.36 per share, for maximum aggregate gross proceeds of $2,000,000.16.

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NEWS RELEASE

Contact Exploration Announces Closing of Private Placement

December 31, 2013, (Calgary, Alberta) Contact Exploration Inc. (“Contact” or the “Company”) (TSX-V: CEX) is pleased to announce that it has closed its previously announced non-brokered private placement (the "Private Placement") of common shares in the capital of the Company, to be issued on a "flow-through" basis pursuant to the Income Tax Act (Canada) ("Flow-Through Shares"). Contact issued an aggregate of 5,555,556 Flow-Through Shares in the Private Placement, at a price of $0.36 per Flow-Through Share for aggregate gross proceeds of $2,000,000.16. 

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NEWS RELEASE

Contact Exploration Provides Operations Update

January 20, 2014, (Calgary, Alberta) Contact Exploration Inc. (“Contact” or the “Company”) (TSX-V: CEX) is pleased to provide an operations update on its activities in the Kakwa area of Alberta.

Operated Activities  Contact holds a 25% working interest in all Montney wells and associated facilities on a 16¾ section block in the Kakwa, Alberta area, other than in the 13-17-63-5W6 Well (“13-17 Well”) in which the Company's working interest is 37.5% before payout, 25% after payout. Contact is the operator of all wells and facilities on this 16¾ section block.

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NEWS RELEASE

Contact Announces Interim Filling, Credit Facilities Increase and Operations Update

February 28, 2014, (Calgary, Alberta) Contact Exploration Inc. ("Contact" or the "Company") (TSX-V: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.

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NEWS RELEASE

Contact Exploration’s Kakwa Development Continues with Successful Test Results in Upper Montney Zone

April 7, 2014, (Calgary, Alberta) Contact Exploration Inc. (“Contact” or the “Company”) (TSXV:CEX) is pleased to announce that the seventh Contact-operated horizontal Montney well at 02/14-30-63-5 W6 (the "02/14-30 Well") (Contact 25% working interest) drilled in the Upper Montney D4 interval has been successfully completed and tested.The well was drilled to a total measured depth of 4,563 metres, with a horizontal leg of 1,068 metres, approximately 200-500 metres shorter than Contact’s other Kakwa wells and the shortest of the Company’s Kakwa horizontal wells drilled to date.

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NEWS RELEASE

Contact Exploration’s Provided Reserves Triple in Fiscal 2014

May 21, 2014, (Calgary, Alberta) Contact Exploration Inc. ("Contact" or the "Company") (TSX-V: CEX) is pleased to report that independent reserves evaluations effective March 31, 2014 have been completed by the Company's reserves evaluators in compliance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and in accordance with the Canadian Oil and Gas Evaluation ("COGE") Handbook. GLJ Petroleum Consultants Ltd.

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NEWS RELEASE

Contact Announces Non-Brokered Private Placement and Increase in Credit Facilities

May 26, 2014, (Calgary, Alberta) – Contact Exploration Inc. ("Contact" or the "Company") (TSX-V:CEX) is pleased to announce that it intends to proceed with a non-brokered private placement (the "Private Placement") of up to: (i) 10,256,411 common shares (the "Common Shares") of the Company at an issue price of $0.39 per Common Share; and (ii) 13,700,000 Common Shares to be issued on a "flow-through" basis respecting the expenditure of Canadian development expenses pursuant to the provisions of the Income Tax Act (Canada) (the "Flow-Through Shares") at an issue price of $0.445 per Flow-Through Share, for aggregate gross proceeds of up to approximately $10.09 million.

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NEWS RELEASE

Contact Exploration Announces Closing of Private Placement

June 5, 2014, (Calgary, Alberta) Contact Exploration Inc. (“Contact” or the “Company”) (TSX-V:CEX) is pleased to announce that it has closed its previously announced non-brokered private placement (the "Private Placement") of: (i) 10,256,411 common shares (the "Common Shares") of the Company at an issue price of $0.39 per Common Share; and (ii) 13,700,000 Common Shares issued on a "flow-through" basis respecting the expenditure of Canadian development expenses pursuant to the provisions of the Income Tax Act (Canada) (the "Flow-Through Shares") at an issue price of $0.445 per Flow-Through Share, for aggregate gross proceeds of approximately $10.09 million..

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The 2014 fiscal year for Contact was one of significant growth and accomplishment. At East Kakwa, the company drilled 4 new wells, participated in a fifth well and built and commissioned a central compression and condensate stabilization facility. Total Company reserves (net proved and probable) increased by 43% to 10,643 MBOE (56% oil and natural gas liquids) translating to a total Company net present value (net proved and probable reserves discounted at 10%) of $174.4MM, a 69% increase over the prior year. Proved reserves increased in fiscal 2014 by 226% over the prior year to 5,926 MBOE (52% oil and natural gas liquids), having a net present value of $92.7MM in 2014. In concert, Contact’s production, market capitalization, share price and cash flow all expanded significantly as the success at East Kakwa continued. As a result of this success, Contact secured a position on the 2014 TSX Venture 50 Top Performers list.

NEWS RELEASE

Contact Announces Year End Filing

July 28, 2014, (Calgary, Alberta) Contact Exploration Inc. ("Contact" or the "Company") (TSXV: CEX) is pleased to announce that it has today filed its audited consolidated condensed financial statements for the year ended March 31, 2014 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.

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