Contact Announces Proved Oil Reserves Increase byContact Announces Proved Oil Reserves Increase by 91% in Fiscal 2011
6/30/2011
Contact Exploration Inc. ("Contact" or the "Company") (TSX-V: CEX) is pleased to report that an independent reserves evaluation (the "MBA Report") of the Company's oil and gas assets has been completed by Martin and Brusset Associates in accordance with the COGE Handbook. The reserves estimated are net values before tax and after royalties and were established in accordance with National Instrument 51-101 of the Canadian Securities Administrators. The reserves evaluation is effective March 31, 2011, and did not review the prospective resources assigned by GLJ in January to the Company's unconventional gas acreage. Contact's reserves are almost exclusively associated with oil and gas assets within the province of New Brunswick, which include the 100% working interest Stoney Creek Field and a recently identified oil prospect the Company wishes to exploit in the Edgett's Landing area (the "Hopewell Structure").
Highlights include:
and#61623; Net Proved oil reserves increased in 2011 by 91% above reserve volumes reported in 2010 from 147,000 barrels to 281,000 barrels.
and#61623; Net present value of Net Proved oil reserves (discounted at 10%) increased by 260% from $3,026,000 to $10,909,000.
and#61623; Net Proved and Probable oil reserves increased by 20% from 1,429,000 barrels to 1,711,000 barrels.
and#61623; Net present value of Net Proved and Probable oil reserves (discounted at 10%) increased by 31% from $38,108,000 to $49,927,000.
and#61623; Net Proved and Probable gas reserves remained constant at 7.17 billion cubic feet of natural gas; net present value (discounted at 10%) has decreased by $6,060,000 (26%) related to currently depressed natural gas markets.
and#61623; Net present value of the entire reserves portfolio (discounted at 10%) increased by 9% from $61,438,000 to $67,197,000.
Increased reserve values have resulted from the drilling and completion of two horizontal wells in 2010, within the Company's Stoney Creek Field which confirmed excellent continuity and quality of the oil-bearing reservoir. Better definition of the field and its lateral extent has enabled superior modeling of infill drilling required for primary field development. Decreased oil reserves from the Company's small Saskatchewan property were more than offset by Stoney Creek additions and 93,000 barrels of net probable reserves assigned to the Hopewell Structure oil reservoir.
The Hopewell Structure is a newly defined oil opportunity within Contact's portfolio. The Company has obtained all necessary drilling approvals and is in the final planning stages for a new well in 2011. Oil production has already been demonstrated from a well flanking the seismically-defined structure, with significant opportunity to move up-structure with new wells.
About Contact Exploration Inc.
Contact Exploration Inc. is a public company with a focus on Canadian East Coast onshore oil and gas exploration and development. Our philosophy is to operate exploration and development in our core area of Atlantic Canada and to participate through overrides and carried interests in certain regional unconventional plays, such as coalbed methane in the Cumberland Basin, shale gas in the Windsor area, and conventional exploration on the west coast of Newfoundland. Contact has onshore interests in Nova Scotia, Newfoundland and New Brunswick which includes the Stoney Creek Field and the Hopewell Structure. In addition to the Atlantic Canadian properties, Contact has producing oil assets in south eastern Saskatchewan.
For more information please contact:
Steve Harding
President and CEO
Contact Exploration Inc.
Phone: (403) 771-1091
Fax: (403) 695-3915
Email: sharding@contactexp.com
www.contactexp.com