Contact Exploration Inc.
TSX VENTURE : CEX

Contact Exploration Inc.

February 27, 2008 01:00 ET

Contact Increases Daily Oil Production and Updates Exploration Activities

CALGARY, ALBERTA--(Marketwire - Feb. 27, 2008) - Contact Exploration Inc. ("Contact") (TSX VENTURE:CEX) is pleased to update its shareholders as to the recent increase in daily oil production rate and its exploration activities.

Production Rates:

The installation of permanent pumps on four wells in the Stoney Creek field, as described in our January 15, 2007 Press Release, has been completed. Initial production from these wells has increased Contact's total oil production to a rate of approximately 85 barrels per day. Contact will continue to evaluate between 15 and 20 additional candidates over the remainder of 2008 for increased oil production at Stoney Creek. Current oil pricing in excess of $90 per barrel makes this a very attractive and low cost approach to increase corporate profitability.

Exploration Activities:

In light of current market conditions and the viability of raising funds for exploratory activities, Contact has made a decision to not continue participating in the Szolnok shallow gas exploration project in Hungary. The Company's unearned interest is in the process of being transferred to a third party at no cost to Contact.

The South Stoney Creek Pound Hill C-67-2328 location was ready in mid February to commence drilling operations. Due to our partner's financial constraints, Contact has agreed to reduce their working interest in the exploration block and well reflecting funding to date. This has changed their earning interest from 40% to 28%, and resulted in a 72% interest in the Pound Hill well for Contact. As a result of these changes, the revised target date for commencement of drilling is after the spring load restriction season. This will also be operationally more cost effective than conducting operations through spring thaw.

In West Newfoundland, Contact has entered into two farmout agreements with a private company which could lead to 2 wells being drilled over the next 2 year period, with the primary target being the Trenton - Black River formation. Contact will have carried interests in these wells from 15-20% with the option to participate for additional working interests if desired. The agreements cover the Portland Creek and the Parson's Pond license areas.

Phase One of the New Brunswick portion of the shale (deep) farmout agreement to Triangle Petroleum Corporation has been fulfilled. They have indicated that their earning commitment will be the acquisition of seismic data or drilling of a well on the lands during 2008. In the Nova Scotia portion of the farmout agreement we will continue to monitor the flowback and testing operations of the Kennetcook #1 well prior to making our working interest election.

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 one of 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 70,000 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. In addition to the Atlantic Canadian properties, Contact has producing oil assets in south eastern Saskatchewan.

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