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

 

Contact Exploration Inc. CEX
1/30/2013 12:23:33 AM

 

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

 

 

CALGARY, Alberta, Jan. 30, 2013 (GLOBE NEWSWIRE) -- 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. Contact is to pay 23.75% of the costs of drilling and casing this well to earn an average 23.75% working interest in the Montney Formation in 2.25 gross sections of lands contiguous to Contact's existing Kakwa acreage position, subject to a 5% non-convertible gross overriding royalty on the production from the well. Once earned, Contact will hold 27 gross (12.75 net) sections of Montney acreage at Kakwa.

The first Contact-operated horizontal Montney well (the "13-17 Well") has been on production since December 1, 2012. Various capacity bottlenecks associated with downstream processing restricted December 2012 production from this well. Upon introducing additional condensate handling equipment at the well site on January 4, 2013, the Company has maintained stable gross production averaging 3.8mmcf/d and 575bbl/d well head condensate. Contact has a 37.5% working interest in the 13-17 Well, before payout.

Contact's second operated Montney well (the "14-30 Well") has been successfully tied into downstream processing facilities.  In January 2013, the 14-30 Well was flowed for only a brief period, due to the third party gas plant not having capacity for the extremely high levels of free flowing condensate (in excess of 200bbl/mmcf of natural gas) from the well.  Contact's third operated Montney well (the "3-19 Well") is being drilled from the same surface location as the 14-30 Well, with drilling on schedule to be finished in mid-February 2013, with completion operations anticipated to be finished by mid-March 2013. Once completion operations on the 3-19 Well are finished, the Company will equip the 14-30 and 3-19 Wells in similar fashion to the 13-17 Well, such that condensate can be separated at location, allowing for flow of natural gas from these wells to the third party facility and for condensate to be trucked directly to the sales point.  Contact has a 25% interest in both the 14-30 and 3-19 Wells.


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