Exploration & Production

Contact Exploration Confirms Kakwa Prospectivity

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Contact Exploration Inc. has reported that independent reserves evaluations effective March 31, 2014 have been completed by the Company's reserves evaluators in compliance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and in accordance with the Canadian Oil and Gas Evaluation Handbook.

GLJ Petroleum Consultants Ltd. evaluated the Company's Stoney Creek and Hopewell properties in New Brunswick, while McDaniel and Associates Consultants Ltd. evaluated the Company's Montney Formation assets at East Kakwa, Alberta.

Highlights of the Company's reserves evaluations include (all reserve volumes are reported as net to the Company, before tax and royalty deductions with the increases referenced being against the evaluations carried out on Contact's reserves for the year ended March 31, 2013):

• Total Company reserves (net proved and probable) increased by 43% to 10,643 MBOE (56% oil and natural gas liquids).
• Total Company net present value (net proved and probable reserves discounted at 10%) increased by 69% to $174.4MM.
• Total proved reserves increased from 1,815 MBOE (61% oil and natural gas liquids) to 5,926 MBOE (52% oil and natural gas liquids), an increase of 226%.
• Net present value of proved reserves (discounted at 10%) increased from $28.0MM in 2013 to $92.7MM in 2014, an increase of 231%.

Kakwa - McDaniel Report

During the fiscal year ended March 31, 2014, the Company expanded development at its East Kakwa property, drilling and completing four additional Contact operated horizontal wells (average 25% working interest (WI)) and participating in a fifth non-operated well (24% WI).

The confirmed regional extent of prospective Montney reserves at East Kakwa was expanded and the prospectivity of a second zone (the Upper Montney D4 interval) was confirmed in the McDaniel Report.

Considerable additional data was collected from Contact's extensive operational program, which included securing more than 100 meters of Montney formation core from the Company's 5-23-63-6W6 well. Also during the fiscal year, Contact successfully expanded its Kakwa pipeline gathering system and constructed and commissioned the 16-7 compressor and condensate stabilization facility.

The reserves assignments by McDaniel in the McDaniel Report now encompass 10.5 gross sections (out of 18.75 total gross sections) in the middle Montney (D2 interval) and two gross sections (out of 18.75 total gross sections) in the upper Montney (D4 interval) at East Kakwa, where Contact holds a 25% WI. Contact's Montney acreage at West Kakwa, Chime and Pinto, consisting of 61 composite sections (100% WI), were not evaluated as part of the McDaniel Report.

Highlights of the McDaniel Report include (all reserve volumes are reported as net to the Company, before tax and royalty deductions with the increases referenced being against the evaluation carried out on Contact's reserves at Kakwa by McDaniel for the year ended March 31, 2013):

• East Kakwa proved plus probable reserves increased by 61% to 8,451 MBOE in 2014 consisting of 4,325 MBOE natural gas and 4,125 MBOE liquids.
• The net present value of Contact's East Kakwa net proved and probable reserves (discounted at 10%) increased by 99% to $127.6MM.
• East Kakwa proved reserves increased by 299% to 5,510 MBOE in 2014 consisting of 2,819 MBOE natural gas and 2,691 MBOE liquids.
• The net present value of Contact's East Kakwa net proved reserves (discounted at 10%) increased by 332% to $82.5MM.

Stoney Creek New Brunswick - GLJ Report

The Company's Stoney Creek and Hopewell, New Brunswick reserve evaluation remained consistent from the year ended March 31, 2013, with total proved and probable reserves decreasing less than 1% (2,210 MBOE to 2,192 MBOE). Continued well performance at Stoney Creek, combined with improved commodity forecasts, enabled net present value (discounted at 10%) during the year ended March 31, 2014 to increase by 20% to $46.8MM from $38.9MM.

Operations Update

The Company's first mile and a half horizontal well was drilled from the 7-19 pad location at East Kakwa, reaching a total measured depth of 5,504 meters in 36 days. This well achieved total depth in fewer days than any of the Company's previous mile long horizontal wells.

On the second well drilled from the 7-19 site, Contact is nearing total depth of 5,400 meters, at a similar pace to that of the first well. The Company expects to spud a third well off of the same surface pad before the end of May 2014. Once the third well has reached total depth, Contact plans to consecutively complete and tie-in each of these wells to the Company's existing infrastructure. Contact holds a 25% WI in all three wells.

In addition, Contact is the process of contracting a second rig that is expected to be used to accelerate drilling at East Kakwa. This rig could also be used for drilling on the Company's 100% WI acreage at West Kakwa, Chime or Pinto.