Contact Acquires CBM Property in Nova Scotia

Contact Exploration has been successful at a recent Crown land posting in acquiring the rights to explore for coalbed methane on 177,000 acres in the Cumberland Basin located in the Springhill area of Nova Scotia. AMVEST Nova Scotia, Inc. will be a 50% working interest partner with Contact. This acquisition brings Contact's gross land position in Nova Scotia to approximately 2.2 million acres.

The Springhill area has been noted for its coal mining during the 1900's, which was made particularly difficult as a result of significant methane emissions into underground mine workings. AMVEST, during previous coalbed methane exploration efforts in the Cumberland Basin, drilled and tested two exploration wells and conducted a detailed geologic and reservoir study of the area. An independent report prepared for AMVEST in 1999 estimated a coalbed methane gas resource in excess of 1 Tcf in the Cumberland Basin.

Contact will be the Operator of the Cumberland Basin coalbed methane project, and will retain exploration rights for up to 10 years (including potential license renewals). The exploration agreement may be replaced by a coalbed methane production license for commercialization of the gas resource. Contact and AMVEST will jointly review all existing technical data and plan to put forward plans to commence evaluation of the properties during the latter part of 2004.

A developing gas infrastructure in Nova Scotia is expected to provide the low-pressure facilities and markets needed to initiate commercialization of coalbed methane produced from the Cumberland Basin. Future large-scale gas production volumes may be introduced into a major gas transmission pipeline that traverses the property.

Contact is a junior exploration company with natural gas production in Alberta and a focus on Canadian East Coast onshore exploration. Contact has interests in approximately 2.2 million acres onshore Nova Scotia, 160,000 acres onshore West Newfoundland and 50,000 acres onshore New Brunswick. AMVEST is a private energy company with coalbed methane and natural gas projects throughout the United States. AMVEST is also independently developing coalbed methane resources in the Stellarton Basin, Nova Scotia.

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