Contact Exploration Inc.

Contact Exploration Inc.

May 26, 2014 08:00 ET

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

CALGARY, ALBERTA--(Marketwired - May 26, 2014) -


Contact Exploration Inc. ("Contact" or the "Company") (TSX VENTURE: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.

Proceeds of the Private Placement will be used to fund the Company's exploration and development program, including funding expenditures that qualify as Canadian development expenses which will be renounced in favour of the subscribers of the Flow-Through Shares effective on or before December 31, 2014.

All securities issued pursuant to the Private Placement will be subject to a four-month hold period from the closing date. The Private Placement is subject to approval of the TSX Venture Exchange.

It is expected that a cash fee of 5% of the gross proceeds from the sale of the Common Shares in the Private Placement will be paid to Beacon Securities Limited ("Beacon") as a financial advisory fee respecting Beacon's assistance with the placement of the Common Shares. No fees or commissions are payable by Contact in respect of the issuance of the Flow-Through Shares.

Credit Facility Increase

Contact is also pleased to announce that its senior lender has increased the amounts available under the Company's credit facilities to $9.7 million. The amended operating facility has been increased from $4.5 million to $5.5 million and the non-revolving acquisition and development demand loan has been increased from $3.2 million to $4.2 million. The other terms of the Company's credit facility have remained the same.

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

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:

Forward-Looking Information and 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", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" 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 anticipated closing of the Private Placement, the anticipated fee payable to Beacon in respect of the Common Shares sold pursuant to the Private Placement and the anticipated use of 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 closing of the Private Placement could be delayed if Contact is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The Private Placement will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the Private Placement will not be completed within the anticipated time or at all. The intended use of the proceeds of the Private Placement by Contact might change if the board of directors of Contact 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 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.

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