CALGARY, Nov. 5, 2012 /CNW/ - Contact Exploration Inc. ("Contact" or the "Company") (TSX-V: CEX) is pleased to announce that the second Contact-operated horizontal Montney well (the "14-30 Well") has been successfully completed with a 14 stage water-based nitrogen foam frac. The well was flowed for 96 hours against anticipated gathering system pressure of approximately 1,100psi. During the final 24 hours of flow-back the well averaged gross production rates of 974 bbl/d condensate and 4,970 mcf/d gas, being 1,803 boe/d combined (244 bbl/d and 1,243 mcf/d, or 450 boe/d combined, net to Contact). An additional 4 hour flow test was subsequently conducted to provide insight into the free-flowing initial deliverability of the well, against a final wellhead pressure of 360 psi, which test resulted in gross rates of 1,324 bbl/d condensate and 6,423 mcf/d gas, being 2,394 boe/d combined. The 14-30 Well was drilled ahead of schedule and under budget and completion operations have remained on budget.
The successful drilling and completion of the 14-30 Well confirms that Contact's Kakwa lands are in the heart of the liquids-rich Montney trend, validating the repeatability of this prolific play. Steve Harding, President and CEO of Contact, commented, "Condensate rates from the 14-30 Well are right in line with our expectations given that both the horizontal length of 14-30 Well and its 24 hour production test volumes are approximately 85% of the horizontal length and test rates from our first well at 13-17. However, the 14-30 Well has surpassed our expectations for overall condensate production, having flowed more condensate in its 96 hour production test than did the 13-17 well and demonstrating free-flowing well head condensate yields of 200 bbls/mmcf. The condensate yields from the 14-30 Well will surely enhance the economic returns from this already strongly commercial project."
The 14-30 Well will now be equipped for production and Contact anticipates pipeline connection to the Company's previously built mainline to be finalized by early 2013. The 14-30 Well was designed to allow for the vertical completion and testing of an up-hole Montney target. However, given the success of the horizontal test and the potential risk of compromising wellbore integrity, Contact and its partners have elected not to complete this uphole Montney zone at this time. Contact continues to have confidence in this interval and will plan to test the zone in a future well. The Company is currently permitting a new well from the same surface location as 14-30, and is expecting to spud this well by January 2013.
Contact is also pleased to announce that it has acquired at recent Crown land sales, an additional 8 (eight) 100% working interest sections. These newly acquired lands are on trend with and nearby the Company's original Kakwa sixteen section block that it operates at a 25% working interest. Furthermore, Contact and its partners have acquired ¾ of a section immediately adjacent to the section upon which the 14-30 Well was drilled. With these acquisitions, Contact has added a total of 8.18 net sections of prospective Montney acreage for an average cost of less than $200 per hectare, such that the Company now holds 12.18 net sections prospective for Montney development.
The Company advises that although the initial rates from the 14-30 Well are very encouraging, production test results are not necessarily indicative of long-term performance or of ultimate recovery from the 14-30 Well.
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: www.contactexp.com
SOURCE Contact Exploration Inc.
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