The current plan is to complete drilling operations on horizontal well A89-2328 which was suspended on April 11 2006 due to a rig failure. Drilling operations should take approximately 2 weeks. To recap the horizontal leg of the well had reached a length of 2200 feet. Of the 2200 feet drilled, approximately 1400 feet was drilled within the oil reservoir targeted. Logs, gas readings and samples indicated the reservoir to be of excellent quality. The zone consisted of highly porous oil stained reservoir consisting of clean quartz sand. The zone was encountered as expected from the seismic model and the offsetting well logs that were available. In addition to the targeted reservoir, three separate up hole reservoirs were encountered that exhibited excellent reservoir characteristics from logs, samples and gas readings and evaluation is underway to determine if further testing is required.
Subsequent to the drilling of the first horizontal well Contact will move the rig to a second location for a planned horizontal well in the same targeted zone but in a different part of the reservoir which appears through technical work done to date to be as good or better than our initial location. This drilling operation is expected to take approximately 3 weeks. After both wells are drilled a completion rig will be brought in to complete both wells. Production facilities will be installed in conjunction with this work so the wells can be placed on production to test as quickly as possible. Depending on regulatory approvals it is anticipated that the wells could be placed on production in the next 2-3 months.
Located approximately 10 miles south of Moncton, New Brunswick, Stoney Creek is in close proximity to the largest consumption market in North America with existing pipeline and refinery infrastructure in place. Recognized as one of the oldest producing fields in Canada, the Stoney Creek field produced approximately 800,000 bbl of oil and 28.7 billion cubic feet of gas from 1909 to 1991. The reservoir is approximately 2,700 feet deep and averages 100 feet in thickness. The reservoir quality is excellent with porosity averaging 18% and permeability averaging 160 md. To date, less than 5% of the original oil in place has been recovered. Incremental gas reserves also exist. Utilizing 3-D seismic, 3-D reservoir modeling and horizontal drilling technology, Contact plans to exploit incremental oil and gas from the Stoney Creek field.
Contact Exploration Inc. is a junior exploration company with a focus on Canadian East Coast onshore exploration. Contact's land is located in close proximity to the largest consumption markets in North American with pipeline and refinery infrastructure in place.
Contact has interests in approximately 2.3 million acres onshore Nova Scotia including its developing Coal Bed Methane play at Cumberland, approximately 160,000 acres onshore West Newfoundland and 62,000 acres onshore New Brunswick which includes the Stoney Creek Field.
Contacts' objective is to deliver early cash-flow from the Stoney Creek Field; expand production potential by utilizing 3-D seismic, horizontal drilling and reservoir modeling while continuing to explore underdeveloped basins for home run targets in the East Coast.
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