Contact Exploration Inc.

Contact Exploration Inc.

October 18, 2010 08:30 ET

Contact Announces Closing of Private Placement

CALGARY, ALBERTA--(Marketwire - Oct. 18, 2010) - Contact Exploration Inc. (TSX VENTURE:CEX) -


Contact Exploration Inc. ("Contact" or the "Company") is pleased to announce that it has closed its previously announced non-brokered private placement. Pursuant to the private placement, Contact issued an aggregate of 22,600,000 units ("Units") to exempt buyers on a private placement basis at a price of $0.20 per Unit for aggregate proceeds of $4,520,000. Each Unit consists of one common share ("Common Share") of the Company and one half of one Common Share purchase warrant (a "Warrant"). Each whole Warrant entitles the holder to purchase one additional Common Share at a price of $0.30 per Common Share at any time up to October 15, 2012, being two years from the date of closing of the private placement. 

The Common Shares and Warrants issued pursuant to the private placement are subject to a four month hold period under applicable securities laws, which hold period expires on February 16, 2011.

Proceeds from the private placement will be used to further the Company's drilling program and for general working capital purposes.

About Contact Exploration Inc.

Contact Exploration Inc. is a public company with a focus on Canadian East Coast onshore oil and gas production & exploration. Our philosophy is to explore for and produce hydrocarbons from our core area of Atlantic Canada and to participate through overrides and carried interests in certain non-core areas, such as coalbed methane in the Cumberland Basin, shale gas in the Windsor area and exploration on the west coast of Newfoundland. Contact has onshore interests in Nova Scotia, Newfoundland and New Brunswick which includes the oil producing Stoney Creek Field and potential shale gas assets in the South Stoney Creek area and Cocagne basin. In addition to the Atlantic Canada properties, Contact has producing oil assets in south eastern Saskatchewan.

Forward Looking Information

This press release contains forward looking statements. More particularly, this press release contains statements concerning the intended use of the proceeds of the private placement. 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. The intended use of the proceeds of the private placement by Contact might change if the board of directors of the Company determines that it would be in the best interests of Contact to deploy the proceeds for some other purpose.

The forward looking statements contained in this press release are made as of the date hereof and Contact undertakes no obligation 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.

The Common Shares and Warrants offered have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

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