Contact/Triangle - From Canaccord Today

Contact Exploration* (CEX : TSX-V : $0.52), Net Change: -0.02, % Change: -3.70%, Volume: 109,300
Triangle Petroleum* (TPLM : NASDAQ : US$1.35), Net Change: -0.03, % Change: -2.17%, Volume: 28,400

On board and ready to go. Led by the Utica in Quebec, Bakken in Saskatchewan and the Montney in northeast B.C., Canadian shale plays have caught fire in 2008 thanks to an increased natural gas price, better technology and the huge success of the Barnett shale play in Texas. Relatively unknown to most investors, and definitely not caught up in the excitement yet, is the
shale gas plays developing in the Canadian Maritimes that some industry players believe is more prospective and potentially larger than a couple of the other Canadian shale plays mentioned above. Of course, until proven, predictions are just that, predictions. While all the junior Canadian shale gas players have seen there stocks come off substantially in the last couple
weeks, as drilling and news picks up the excitement for the sector should gain traction again. There will be an extremely large amount of drilling on all the big Canadian shale plays this summer and by the end of the year the market should have a much better grasp on who the winners are. On Thursday, Contact Exploration, which holds highly prospective land in New Brunswick near Corridor Resources (CDH), announced Thursday that it has elected to participate on a working interest basis in the Windsor Shale prospect in Nova Scotia. Contact originally identified and acquired the Windsor Shale block in 2002 and subsequently farmed out a 70% working interest to Triangle Petroleum. Contact retained the right to participate with a 30% working interest or to convert its working interest to a 5% Gross Overriding Royalty. On Thursday, Contact said it has notified Triangle, the operator of the property, that it will continue as a 30% working interest partner. The junior oil and gas company will participate retroactively on the already drilled Kennetcook #2 well and the 3D seismic data that was procured by Triangle last fall. Expenditures for the retroactive participation in the Kennetcook #2 well and seismic will be approximately $3 million.

The Kennetcook #1 well was carried at no cost to Contact by Triangle as part of the earning process on the block. The next well on the prospect is expected to spud in late July and is a 3,000-meter (10,000-foot) vertical test that targets the deeper and considerably thicker shale package, in an undrilled fault block north of Triangle’s first two vertical test wells. This next well is one of six new delineation wells that comprise the second phase of Triangle’s three-phase strategy for developing natural gas from shale in Eastern Canada. At least one horizontal well is expected to be drilled as part of the second phase. On May 19, independent resource evaluator Ryder Scott estimated 69 Tcf of original gas-in-place for the Horton Bluff Shale on the Windsor
Block.