Contact Exploration Inc. ("Contact" or the "Company") is pleased to announce that the third Contact-operated horizontal Montney well (the "3-19 Well") has been successfully completed and tested. The well was flow-tested for 161 hours. During the final 24 hours of flow-back the well averaged gross production rates of 1,798 boe/d consisting of 826 bbl/d condensate and 5,833 mscf/d gas (207 bbl/d and 1,458 mscf/d, or 450 boe/d combined, net to Contact) against anticipated gathering system pressure of approximately 5,000 kPa.
The successful drilling and completion of the 3-19 Well continues to demonstrate that Contact's Kakwa lands are in the heart of the liquids-rich Montney trend, validating the repeatability of this prolific play. The Company has engaged an independent reserve evaluator to provide an assessment of the reserves and resources on Company lands as at Contact's fiscal year end of March 31, 2013. This assessment is anticipated to be complete by May 2013 and will be Contact’s first reserve evaluation to include its Kakwa interests.
Equipping and facilities work will begin immediately to add additional liquids handling equipment on site that will accommodate both the 3-19 Well and the Contact operated well at 14-30 which well was drilled from the same surface location. It is currently anticipated that production from both wells will commence in mid-April 2013.
The Company is currently permitting multiple new wells at Kakwa and anticipates the drilling of the next well to commence after spring break-up. The Company advises that although the initial rates from the 3-19 Well are very encouraging, production test results are not necessarily indicative of long-term performance or of ultimate
recovery from the 3-19 Well.
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