Contact Exploration Inc.
TSX VENTURE : CEX

Contact Exploration Inc.

December 01, 2006 16:40 ET

Contact Exploration Inc.: Stoney Creek Work-Over Program Update

CALGARY, ALBERTA--(CCNMatthews - Dec. 1, 2006) - Contact Exploration Inc. (TSX VENTURE:CEX) is pleased to provide an update on its 30-well retesting and work over program for the Stoney Creek field.

To date, Contact has completed initial retesting of 24 gas wells with the eight most productive wells having a combined deliverability in excess of 1mmcfd. Pressure surveys and electric logs have been run on the majority of the wells. With this information we will be able to determine the reserve potential from the existing zones and identify zones for future recompletion potential. Additional gas wells may be tested over the next year to evaluate their potential. Contact's objective is to establish a long term strategy to market this gas through a local marketing network.

In addition, Contact has swab tested three old oil wells which produced oil inflow rates from 10-25 bopd. Since these wells are already in place, minimal capital is required to put them on production. These wells will be production tested over the next 3-6 months. Based on the stabilized production rates, as many as 12 more old oil wells could be retested and placed on production. Pressure surveys taken in the oil producing region of the field have shown that the average reservoir pressure is twice that which was previously reported. This higher reservoir pressure will positively impact our ability to recover additional oil from the field.

Contact is aggressively developing the Stoney Creek field to deliver incremental production from this well known field and to revitalize the field for commercial production. We anticipate oil production revenue by year-end. In addition to the work-over program, other exploration activity in the Stoney Creek area which is currently underway includes the completion and production of two horizontal wells drilled within the Stoney Creek Field, a three well re-entry program which includes a cased gas well that was shut in with very encouraging initial test results and the interpretation of a recently completed 100km seismic program designed to identify untested zones south of the South Stoney Creek field. To date, Contact has invested in excess of $8 million in the Stoney Creek field and surrounding area including seismic, drilling, completions, re-testing and equipping.

Contact will continue to report further results upon the completion of further testing. While it is too early to project long-term production rates from the work-over program, Contact is very pleased with the initial test results to date.

About Contact

Contact Exploration Inc. is a junior exploration company with a focus on Canadian East Coast onshore exploration. Contact's land claims and holdings are located in close proximity to the largest consumption markets in North American with pipeline and refinery infrastructure in place.

Contact has interests in approximately 1.5 million acres onshore Nova Scotia including its 25% working interest in the developing Coal Bed Methane play at Cumberland, approximately 160,000 acres onshore West Newfoundland and 165,000 acres onshore New Brunswick which includes the Stoney Creek Field.

Certain statements contained herein may constitute forward-looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. We believe that the expectations reflected in the forward-looking statements are reasonable based upon management's current views but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements speak only as of the date hereof. We do not intend, and do not assume any obligation, to update conclusions, forecasts or projections that may be contained in these forward-looking statements, whether as a result of new information, future events or otherwise. No assurance can be given that actual results, performance or achievement expressed in, or implied by these forward-looking statements will occur, or if they do, that any benefits may be derived from them. Past results have been applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of factors that may include, but are not limited to: the impact of government regulation, potential delays or changes in plans with respect to exploration and development projects, success of exploration and development activities, general industry and market conditions and other risks detailed from time to time in Contact's Annual Information Form and Management's Discussion and Analysis, both of which may be found at www.sedar.com.


The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information