Atlantic Canada Land Holding Map [Back to Top]

Click here for a printable PDF version of the New Brunswick and Nova Scotia holdings map (118 KB)

Click here for a printable PDF version of the West Coast Newfoundland holdings map

Cilck here for an archive version of the entire Atlanic Canadian region map in 2005(393KB)

New Brunswick [Back to Top]

Eastern Moncton Sub-basin (74,568 acres)

Including Stoney Creek Field (5,500 acres)

& South Stoney Creek (68,000 acres)
Contact acquired a 100% working interest in approximately 74,568 acres of leases and licenses located 15 kilometres south of Moncton, New Brunswick, in an area known as the eastern Moncton subbasin. This area lies adjacent to and includes the Stoney Creek field, which produced approximately 800,000 barrels of oil and 28 bcf gas between 1909 and 1991. Here, the Albert Formation of the late Devonian to Tournaisian Horton Group records the deposition of thick sequences of deep lake, organic rich shales and lake margin fluvio-deltaic sandstones. The former represent an excellent petroleum source rock while the latter constitute productive reservoirs.

During the Second quarter of fiscal 2006, Contact entered into a seismic option and farmout agreement with an unrelated third party for the Stoney Creek oil field. The agreement required the Company to commence a seismic program on or before September 1, 2006 and provides an option to drill a test well. The Company contributed $600,000 towards abandonment and reclamation of existing wells within the farmout lands. Contact assumes no other abandonment or environmental liability. Contact has the option to earn a 100% working interest in the Stoney Creek property.

In the fall 2005, Contact completed a 17 square kilometre, 3-D program covering the Stoney Creek Field. The seismic was processed and two new horizontal wells have been drilled to date.

Contact has also completed a reservoir modelling study to address opportunities to maximize hydrocarbon recovery as well as identify areas that may not have been fully exploited for both oil and gas. From this study it has been decided that two previously abandoned wells will be re-entered and 30 existing wells will be re-tested. All regulatory approvals have been obtained on this work and work had commenced at the end of the quarter.

First the A-89-2328 horizontal well was completed and the heat string installed. The second horizontal well, the I-88-2328 well, was drilled and competed andsubsequently the heat string installed.  Heat strings were deemed necessary due to the paraffinitic nature of the oil expected from the field.

Other Albert Formation prospectsin the sub-basin include deeper (~2,000 metre) gas zones encountered but not adequately tested and completed during recent drilling at the Downey/Bull Creek prospect, 4 kilometres south of the Stoney Creek field. Contact also acquired 5500 acres of land under its acquisition of all of the shares of Columbia Natural Resources Canada Limited. A program of re-evaluation and possible production from these wells is planned. A 100 kilometer 2 dimensional seismic program that is looking to identify a Stoney Creek look-alike feature was also completed to confirm Stoney Creek look alike features.

As of June 2007 the field has been put back into production, exploiting the proved and probable reserves of 1,207,000 barrels of oil and 6.525 billion cubic feet of natural gas.  The initial field production was achieved by pumping crude from the two horizontal wells and two re-worked boreholes that were in near proximity to the horizontal wells.  During the second quarter of the fiscal year 2007-2008, Contact has completed the following work at Stoney Creek:

-Continued production from the four production wells in the field

-Optimized production operations and continued fine tuning the 24 hour operation

-Applied to the New Brunswick government for work-over permits for 14 prioritized wells

-Shipped approximately 2850 barrels of crude oil from the Stoney Creek facility during the  quarter (July, August, September 2007). 

The north part of the Stoney Creek area is in close proximity to the local gas distribution system to the Town of Riverview, New Brunswick.  This local gas distribution system is connected to the Maritimes and Northeast pipeline, which was completed in 2000 and delivers natural gas from offshore Nova Scotia to the northeastern United States and various local markets in the Province of New Brunswick. Oil production from the Stoney Creek Field is trucked directly to a nearby refinery in St. John, New Brunswick.

Exploration is continuing in the 68,000 acre South Stoney Creek Prospect, including the Shenstone G75-2328, drilled and suspended in August, 2007. A second exploratory well, the Pound Hill well in the Weldon area, is expected to spud in late 2007.  In July of 2007 a 40% (non-operated) interest of the conventional acreage in the block was farmed out to Shoal Point Energy Ltd.  Also in the spring of 2007, a farmout agreement with Triangle Petroleum Corporation has given them the ability to earn 70% of the deep (shale) rights on the block and the operatorship of same shale rights.

Nova Scotia [Back to Top]

Windsor Block (515,000 acres)
The Windsor Block (515,000 acres, 206,000 ha) covers the Kennetcook Basin, onshore Maritimes Basin, Nova Scotia. Two main play types are recognized, and the block has been subdivided into an East and West Block. On the East Block, shallow Horton potential has been identified by previous drilling and seismic programs. The Noel #1 well, drilled in 1975, encountered gas shows in the Cheverie and Horton Bluffs Formations of the Horton Group, at depths, between 350m and roughly 1,000m. No hydrocarbons were produced but good permeability and porosity were indicated from testing and logging. Other old wells and recent stratigraphic tests by Northstar Energy have also encountered gas in the Horton section, but a lack of complete logging and testing has precluded the identification and characterization of the reservoir zones.

In the East Block, Devon Energy has assigned its remaining interest to Contact in exchange for a 3% GORR, leaving Contact with a 100% working interest.

In the period from 1999-2002, two new seismic datasets were acquired over this area. Northstar Energy shot a grid in 2000 which was a vast improvement over older data. Contact acquired 40 km of 2-D seismic in 2002 to firm up drilling targets.

Through a farmout agreement with Oiltec Resources Ltd., a well was drilled in the second quarter of fiscal 2004 in the West Block. The well was terminated at 496 m after encountering salt at the top of the seismically-defined target interval, and did not penetrate into the underlying Windsor reef target. Contact was carried for a 10% working interest and earned an additional 5.5% by paying 9% of the drilling and abandonment costs of the well. Interests earned by Contact and Oiltec pertained in the West Block (322,540 acres) to the depth drilled. Contact continues to believe that highly prospective reef targets exist here and plans to continue exploration with the acquisition of 3D seismic data, and the deepening of the 2003 well to test the undrilled reef target. Prior to the end of the second quarter, Contact acquired Oiltec’s remaining interest in the Windsor block bringing our working interest to 100%.

In the past year, Husky Energy shot a 3D seismic program on the adjoining exploration block with the goal of identifying Windsor Reef targets. After shooting the seismic, Husky Energy drilled three wells. At the end of the quarter information was not fully available on the results for these wells.

As part of an option agreement with an unrelated third party, Contact had a study done on the potential to explore for shale gas on this exploration block. At the time the study concluded that the potential reserves were there but the current economics for exploiting them were not. The third party did not pick up the option and paid an option fee to Contact.

In June of 2007, Contact announced the completion of a farmout agreement with Triangle Petroleum Corporstion for the ability to earn a 70% interest and operatorship of the block.  Triangle Petroleum Corporation is a known explorer of shale gas plays, primarily in the United States.  Subsequent to the farmout agreement two exploratory wells were drilled in the fall of 2007, the Kennetcook #1 and Kennetcook #2.  In late November the first two stage slickwater fracturing treatment was conducted successfully on the Kennetcook #1 well. Completions and testing is ongoing.

Cumberland Coal Bed Methane (178,000 acres)
This 178,000 acre block, in northwestern Nova Scotia, was jointly acquired with Amvest Nova Scotia, Inc., with each company owning 50% of the rights to explore for coal gas. Previous exploratory work on these lands by Amvest included the drilling of two stratigraphic test wells. The prospect lies at depths of 600 metres to 2,200 metres within coal-bearing intervals of the Springhill Mines and Joggins Formations of the Westphalian-aged Cumberland Group. The coals are ranked as high-volatile A to medium-volatile bituminous, and occur in the northeast to southwest- trending Athol syncline, which affects Carboniferous rocks in the area.

In 2004, Contact signed an option agreement with Stealth Ventures Ltd. whereby Stealth would have to elect, prior to March 31, 2005, to drill a horizontal well to earn 50% of Contact’s interest in the block. This option was exercised and Stealth has committed to spend $1.6 million to drill a well on the block by December 31, 2005. Furthermore, Stealth has signed an agreement with Amvest to take over Amvest’s 50% interest in the block.

The operator has drilled one horizontal well on this property in March 2006. The well successfully drilled a 430 metre horizontal leg within the #6 coal seam. Sproule and Associates Limited of Calgary Alberta completed a report recognizing 1.183tcf of discovered CBM resource on the Cumberland Exploration Permit. Accordingly, Contact’s net working interest share of the Cumberland property resource would be 295-BCF. This well was completed during the quarter and placed on production test.

Two additional wells have been drilled on this property. The first well, referred to as Coalmine Brook #12 drilled a 738 metre horizontal coal section in the #2 seam. The next well, referred to as Coalmine Brook #13 drilled a 1000 metre horizontal coal section in the #3 seam. We now have three horizontal wells drilled in three different coal seams and will have all three on test during the third quarter of fiscal 2007. 

It was announced in March 2007 that Contact's working interest in the Cumberland CBM play was converted into a royalty interest. In addition to a cash payout and assumption of debt totalling $750,000, a total of 1.5% non-convertable gross override is in place (existing 0.5% plus 1.0% as part of the agreement).  The operator, Stealth Ventures Ltd., has indicated that it will be fracturing one of the wells in the near future.

Bras d’Or Block (636,000 acres) &

Wallace Station Block (293,000 acres)
As anticipated and noted in quarterly reports, Contact has given notification ot the Nova Scotia Government that it has elected not to continue holding this acreage, as of September 15,2007.

Newfoundland [Back to Top]

Parsons Pond Block (32,290 acres) and Portland Creek Block (38,040 acres)
These blocks are located in the mid-Ordovician dolomite play on the Great Northern Peninsula of western Newfoundland and are held 50% and 80% respectively by Contact. They also lie in the productive “inversion fairway”, equivalent to the northern landfall of the Appalachian fold-and-thrust belt, which is an important producing area in the southern Appalachians. The area contains four important play types: (1) structural traps within dolomitized platform carbonates of the St. George Group, which have produced oil at rates >2,000 bopd on the nearby Port au Port Peninsula, (2) stratigraphic traps associated with hydrothermal dolomitization along sub-vertical fault trends (“Trenton-Black River” type), (3) dolomitized deep-water carbonates (breccias and calcarenites) which stratigraphically overlie the platform, and (4) massive, deep water sandstones, which are generally low in inherent porosity and permeability, but which are highly fractured.

In general, reservoirs are widely interposed with deep-water, marine source rocks, creating favourable source-reservoir-trap scenarios. Over the last century, shallow production of light, low-sulphur oil occurred near seeps around the shores of ponds in the area. Approximately 300 km of good quality seismic collected in the 1990’s has enabled the identification of drilling targets in the various play types. Contact holds two of the three large blocks currently under license in this area.

In the winter of 2004, Contact operated a continuous-core well (Parsons Pond #1) to test one of the seismically-defined shallow dolomitized breccia targets (type 3) above. The reservoir target was not found beneath a section of massive sandstones and tight, deep-water carbonates within the Humber Arm Allochthon. The borehole encountered numerous hydrocarbon shows in natural fractures. The core is presently undergoing evaluation prior to a decision on testing the prospective intervals. The discovery of hydrocarbons in the fractures in general points to a potentially large fractured reservoir play in the area which will require further mapping and evaluation.

Velocity information gathered from the core will enable more accurate depth mapping of the mid-Ordovician platform prospects over both the Parsons Pond and Portland Creek blocks. Contact and partners plan to acquire further 2D and possibly 3D seismic data in the area, which will enable better definition of platform targets in particular. Exploration in the next year will also include the planning of a platform test, and mapping and characterization of the fractured allochthon play. Pooling of lands with a block between the two Contact blocks is also being considered.

Highlands Block (88,900 acres)
As anticipated and noted in quarterly reports, Contact has given notification to the Government of Newfoundland and Labrador that it has elected not to continue holding this acreage, as of February 12, 2008.

Saskatchewan [Back to Top]

Southeast Saskatchewan

On November 19, 2007 it was announced that Conatact had purchased  approximately 25 barrels per day of oil production in southeastern Saskatchewan, augmenting Contact’s current oil production in New Brunswick.  The production was acquired from a private company for a total purchase price of $200,000.  The wells have all been drilled within the last two years.  Contact will operate the majority of the properties and will have an average working interest of 85%.  The acquisition will be retroactive to October 1, 2007.