Contact Exploration Inc.
TSX VENTURE : CEX

Contact Exploration Inc.

January 31, 2008 09:20 ET

Contact Exploration Inc.: Update on Nova Scotia Shale Acreage

CALGARY, ALBERTA--(Marketwire - Jan. 31, 2008) - Contact Exploration Inc. ("Contact"), (TSX VENTURE:CEX) is pleased to announce that Triangle Petroleum Corporation ("Triangle") has reported the analytical results as well as an operational update on the wells drilled in Contact's Windsor Shale Block. Contact holds a 30% non-operated interest and Triangle is the operator with a 70% working interest in the Windsor Shale Block. In their release dated January 30, 2008, Triangle stated:

"Triangle Petroleum Corporation (the "Company" or "Triangle") (OTCBB:TPLM) is pleased to report that log analysis carried out on its Kennetcook #1 ("KC #1") and Kennetcook #2 ("KC #2") wells in the Windsor Basin of Nova Scotia, Canada, yielded an estimated resource range of 89 to 109 billion cubic feet ("Bcf") of original gas in place ("OGIP") per section (square mile) from the Horton Bluff formation.

These wells were drilled specifically for the purpose of providing the Company with the necessary technical information in order to fully assess the Upper Devonian to Lower Mississippian shale potential within the Horton Bluff formation. The KC #1 and KC #2 wells were selectively completed and fracture-stimulated in organic rich shale zones. Estimated OGIP for just the completed zones is 42 Bcf per section for KC #1 and 76 Bcf per section for KC #2.

Clarence Campbell, Vice-President, Exploration, states, "Our management team is confident that we have a significant unconventional resource play in Nova Scotia. This assessment is based on the observation of the physical released gas shows from the core samples to the detailed lab measurements and interpretations provided by the shale gas consultants we have engaged."

Analytical Summary

Extensive coring was undertaken while drilling the two Kennetcook wells including 1,254 feet of core from KC #1 and 392 feet of core from KC #2. More than 140 samples were submitted to multiple labs for analyses that included Leco TOC (total organic carbon content derived from the Leco Corporation carbon analyzer), RockEval (detection of type and maturity of organic matter with the Rock Eval module), organic facies determination, maturity, gas desorption, gas composition, XRD (X-ray diffraction to characterize composition of the shale), CT scans, mechanical rock properties and fluid compatibility studies. Log analysis was derived from the extensive log suites taken on the two wells integrated with core and sample derived data.

A comprehensive interpretation of source rock potential, thermal maturity, headspace gas composition, canister gas desorption, adsorption and composition, and physical properties of selected samples of both wells was performed by the analytical laboratories of the Weatherford Group (Humble Geochemical, OMNI Laboratories, and TICORA Geosciences) and Global Geoenergy Research Ltd.

Log analysis by Schlumberger on the two Kennetcook wells yielded an estimated resource range of 89 to 109 Bcf of OGIP from the Horton Bluff formation. In addition, widely varying samples of the core were immediately placed into canisters after drilling to enable direct desorption testing. Total gas content of the shales as measured from desorbed core samples ranged from 7.9 standard cubic feet ("scf") per ton to 190 scf/ton. Schlumberger provided the petrophysical analysis for these two wells.

Average TOC from all shale samples was 10%. Organic matter type was determined by organic facies analysis as Type II/III to Type III. Maturity of the shales in the zones of interest as measured by the vitrinite reflectance ranged from 1.53% to 2.07%, placing the shale's maturity within the peak window for natural gas generation.

X-ray diffraction data (XRD) indicates that the shales in the Horton Bluff contain an average of 52% quartz and carbonate with 42% clays. Clay type has been identified as a predominately kaolinite-illite mixture with more minor amounts of chlorite and mixed layer clays.

Operational Update

The Kennetcook wells have been continuously recovering frac fluids since their initial stimulations, with the exception of a temporary shut-in during the Christmas break. The wells continue to flow frac fluids to the surface. After a slight delay due to rig availability limitations, Triangle recently installed downhole pumps on both wells with the intent to increase frac fluid recovery rates.

Additionally, Triangle has successfully concluded its 25 square mile 3-D and 30 mile 2-D seismic programs. The seismic data has been processed and the technical team is actively interpreting the data. The seismic will assist Triangle in assessing the total natural gas resource potential within the Kennetcook area and to select future well locations."

Contact is encouraged by the above mentioned progress in the Windsor block. The farm-out of the Windsor block to Triangle was announced by Contact on June 11, 2007. By moving to a non-operated working interest in the Windsor block, Contact is able to still participate significantly in the area with a company whose expertise is shale gas exploitation, while allocating operational resources to the Stoney Creek field production and South Stoney Creek exploration activities. Additionally, Triangle has the option to earn a 70% operated working interest in Contact's 68,000 acre shale gas horizon in New Brunswick.

About Contact

Contact Exploration Inc. is a junior exploration company with a focus on Canadian East Coast onshore exploration & production. Contact's holdings and operations are located in close proximity to the world's largest consumption markets, near strong pipeline and refining infrastructure and in mature jurisdictions with reasonable royalty structures in place.

Contact's Philosophy is to operate production and close proximity exploration in our core area of Atlantic Canada, and to participate in unconventional or high-impact exploration, such as the Windsor Shale Block in Nova Scotia (operated by Triangle Petroleum).

Contact has onshore interests in approximately 700,000 acres in Nova Scotia, approximately 160,000 acres in west Newfoundland and 165,000 acres in New Brunswick which includes the Stoney Creek Field (approximately 5,500 acres), a field with estimated proved and probable reserves of 1.2 million barrels of oil and 6.5 bcf of natural gas.

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.

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