Contact Exploration Inc.

Contact Exploration Inc.

June 03, 2013 09:02 ET

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

CALGARY, ALBERTA--(Marketwired - June 3, 2013) - Contact Exploration Inc. ("Contact" or the "Company") (TSX VENTURE: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.

As described in Contact's press release of March 4, 2013, Contact and Pieridae are the partners in Pieridae Production Limited Partnership, a natural gas-focused exploration and production entity formed to source, develop and produce natural gas to serve as significant portion of the feedstock for the Goldboro LNG project.

The sales agreement was signed by Alfred Sorensen, President and CEO of Pieridae and Gareth Griffiths, Chief Commercial Officer, Merchant Trading of E.ON, at a signing ceremony at the Canadian Embassy in Berlin.

Alfred Sorensen, President and CEO of Pieridae remarked that the sales agreement represents one of the major milestones for Goldboro LNG, noting that the agreement with E.ON provides the economic security needed to complete the development of the first process train of the Goldboro LNG terminal. Pieridae noted that the LNG pricing in the sales agreement is based on market prices of natural gas in the Western European market.

In collaboration with Contact, Pieridae is having advanced discussions with North American natural gas exploration and production and pipeline companies, for the purpose of providing natural gas feedstock and transportation services for the Goldboro facility.

Upon completion, the Goldboro LNG terminal will have the ability to export up to 10 MTPA of natural gas, year round, with on-site storage capacity of 690,000 cubic metres of LNG. Upon commencement of commercial operations, expected by the first quarter of 2020, natural gas will be transported to Goldboro, Nova Scotia, primarily using existing pipeline systems and exported by ship to international markets.

"This milestone represents an enormous opportunity for Contact, in our role as the operator of the upstream partnership responsible for securing onshore natural gas reserves and production that will supply the Goldboro facility," remarked Steve Harding, President and CEO of Contact.

Pieridae is currently conducting the environmental assessment ("EA") for the Goldboro LNG project. Pieridae expects to submit the EA report to the Province of Nova Scotia in 2013, with approval of the EA being the next major milestone towards the final investment decision for the project, expected in 2015.

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:

About Pieridae

Pieridae Energy is an energy infrastructure development company focused on liquefied natural gas (LNG) opportunities. Founded in 2011, Pieridae plans to develop a fully integrated LNG infrastructure business. Pieridae is currently developing Goldboro LNG, a proposed export LNG terminal located in Goldboro, Nova Scotia, Canada.

ADVISORY ON FORWARD LOOKING 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 volumes of deliveries of LNG to E.ON by Pieridae in the future under the sales agreement, the capacity of the Goldboro LNG terminal to export LNG upon completion of the terminal, methods of transportation of natural gas and LNG to the terminal and international markets in the future, the timing for Pieridae to complete and submit the EA to the Province of Nova Scotia and the possible approval of such EA .

Forward-looking statements or information are based on a number of material factors, expectations or assumptions of Contact which have been used to develop such statements and information but which may prove to be incorrect. 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. In particular, in addition to other factors and assumptions which may be identified herein, no assurances can be given that: (i) Contact's New Brunswick natural gas assets will be developed as a result of the completion of the Goldboro LNG terminal; or (ii) the Goldboro LNG Facility will be completed or, if completed, will have the processing capacity, or will result in the economic benefits to Contact or otherwise, discussed herein.

Further, events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including, without limitation: changes in commodity prices; changes in the demand for or supply of the Company's products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters, in particular regulatory matters related to the development of the Goldboro LNG Facility; changes in development plans of Contact or by third party operators of Contact's properties, increased debt levels or debt service requirements; inaccurate estimation of Contact's oil and gas reserve and resource volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in Contact's public disclosure documents. Additional information regarding some of these risk factors may be found under "Risk Factors" in the Company's Management Discussion and Analysis prepared for the year ended March 31, 2012. The reader is cautioned not to place undue reliance on this forward-looking information. 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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