Contact Sets Up New Core Exploration Area in New Brunswick

Contact Exploration has been successful in acquiring approximately 28,000 acres in 4 blocks at the February 10, 2004 New Brunswick, Canada land sale. This acquisition is in addition to 22,000 acres that was acquired through a private company in late 2003 bringing Contact's land holdings in this new core area to 50,000 acres.

This new exploration area is in the eastern portion of the Devonian- Carboniferous Moncton Subbasin and is south of and contiguous with the Stoney Creek field which produced 1 million barrels of light oil and 30 BCF of gas during its production life in the early to late 1900's. The productive interval is the Albert Formation of the Horton Group, a sequence of ancient lake deposits that contain mature fluvio-deltaic sandstone reservoirs. This is the same interval that is found at the Corridor McCully field but at a much shallower depth.

The first prospect to be tested on the new acreage will be the 1750-acre Gautreau play, which lies 2 km southeast of the Stoney Creek field. Several shallow wells were drilled into the upper Albert Formation between 1920 and 1930. Many of these wells encountered petroleum-bearing sandstones that flowed liquid rich gas to surface. Lack of gas demand, infrastructure and commodity prices prevented development at that time. The zones of interest are encountered under an evaporite seal and consist of approximately 300 meters of gross and 100 meters of potential net pay. The well depth is projected to be a maximum of 1500 meters. Potential gas reserves for this project could be in excess of 100 BCF. The second prospect Downey/Bull creek is located 4 kilometers south of Stoney Creek and is keyed off another well previously drilled. Reserves for this prospect again could be in excess of 100 BCF. A third prospect is a shallow oil target (800-1500) meters at Albert Mines, which is approximately 8 km south of Stoney Creek. This prospect had 2 producing oil wells on it as recently as 2 years ago. Reserve potential on this prospect could be in excess of 50 mmbbls. All three prospects will be enhanced by the use of modern techniques for drilling and completions.

Contact believes the eastern Moncton Subbasin of New Brunswick has the potential to become a major producing area for both oil and natural gas. The area lies 20 kilometers south of the city of Moncton and 25 kilometers southwest of the Maritimes and Northeast pipeline, which delivers offshore Nova Scotia gas to the northeastern United States.