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Contact Exploration Edges Down after Operations Update

Contact Exploration Inc. (CEX.V) is down more than 2% after saying it has commenced mobilization of the Nabors #112 drilling rig to the Stoney Creek oil field and expects that the first horizontal oil well of the company's drilling program will be spud this week. Contact has received regulatory approval to drill two horizontal wells in the Stoney Creek oil field. Contact anticipates deploying completions equipment shortly after its drilling program concludes.

"Contact is extremely encouraged by the results of its technical assessment to date of its unconventional assets in South Stoney Creek. Contact will continue to investigate optimum strategies for developing its shale gas assets and anticipates that these assets will play an ever increasing role in the company's future. Despite the recent technical analysis by Contact, no assurances can be given that these geological units continue throughout any or all of Contact's Stoney Creek acreage. In addition, because Contact's technical work on its shale gas prospect is in the early stages only, no assurances can be given that commercial volumes of natural gas (or other hydrocarbons) exist within Contact's shale gas acreage or that if such hydrocarbons do exist, that they can be extracted on economic terms, or at all. Contact's further technical and exploration work on this shale gas prospect is subject to many risks and uncertainties, including that Contact will not be able to access the capital required to advance the required technical work and carry out subsequent drilling operations on the prospect, all risks typically associated with drilling operations and the risks that drilling operations will be unsuccessful or that recovery factors will not be commercial."

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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