Contact Exploration Inc. is pleased to announce that its 23.75% non-operated 14-2-63-6 W6M Kakwa Montney
well (the "14-2 Well") has been successfully completed within the upper interval of the Montney Formation. This interval had not previously been tested by Contact; however, other operators have demonstrated repeated success in this interval within the Kakwa/Resthaven trend. The 14-2 Well has been flow-tested by the operator for a total of 191 hours, including the final 98 hours with tubing in hole. During the first 24 hours with tubing in hole, the 14-2 Well averaged gross production rates consisting of 444 bbl/d condensate and 3,710 mcf/d natural gas (105 bbl/d
condensate and 882 mcf/d natural gas net) against a flowing pressure above 4,500 kPa.
During the final 74 hours with tubing in hole, the operator varied flowing pressures between 800 kPa and up to 6,800 kPa to test the 14-2 Well under various flowing conditions resulting in total average production during the final 98 hours of 327 bbl/d condensate and 2,800 mcf/d natural gas (77 bbl/d condensate and 670 mcf/d natural gas, net to Contact). In the final hour of testing, water cut from the 14-2 Well was 75%, with an average of 80% water being cut over the 98 hour testing interval. Approximately 2,300 m3of frac water was used, with a total recovery of 1,900m3 to date, which includes both frac flow back and natural formation water.
The results of the 14-2 Well confirm high condensate yields and strong reservoir performance
within this Montney zone. The operator is continuing to gather data from the 14-2 Well and has landed bottom hole
pressure recorders. Additional operational activity, including further reservoir testing, is being considered by the operator to help define the source of elevated water production. Options for pipeline tie-in have been addressed by the operator with completion expected before year end. The Company advises that production test results are not necessarily indicative of the long term performance or of the ultimate recovery from the 14-2 Well.