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CALGARY, March 23, 2012 /CNW/ - Contact Exploration Inc. ("Contact" or the "Company") (TSXV: CEX) is pleased to announce that it has closed its previously announced non-brokered private placement (the "Private Placement") of $1 million of convertible, redeemable, 8% preferred shares ("Preferred Shares") of the Company. Pursuant to the Private Placement, Contact has issued an aggregate of 1,000 Preferred Shares to an exempt buyer on a private placement basis at a stated value (the "Stated Value") of $1,000 per Preferred Share, for aggregate gross proceeds of $1,000,000.
Holders of the Preferred Shares are entitled to a preferred 8% cumulative dividend payable on the last business day of March, June, September and December in each year, commencing on June 29, 2012. Each Preferred Share is convertible at any time at the option of the holder into common shares ("Common Shares") of the Company at a conversion price of $0.20 per Common Share, such that each Preferred Share is convertible, based on the $1,000 Stated Value thereof, into 5,000 Common Shares. Additionally, the Preferred Shares are redeemable by the Company at any time for the Stated Value thereof plus all declared but unpaid dividends and are retractable by the holder after one year from the date of issue for the Stated Value thereof plus all declared but unpaid dividends.
The Preferred Shares issued in the private placement, and any Common Shares issued on conversion thereof, are subject to a four month hold period under applicable securities laws, which hold period expires on July 23, 2012.
Contact expects to use the proceeds of the Private Placement to fund ongoing operations and capital programs, including a portion of its capital obligations associated with the drilling of the Corporation's previously announced Montney exploratory well in the Kakwa area of Alberta.
About Contact Exploration Inc.
Contact Exploration Inc. is a public company which has been focused on Canadian East Coast onshore oil and gas exploration and development. Our philosophy is to operate exploration and development in our core areas of Stoney Creek, Hillsborough and Edgett's Landing, New Brunswick and to participate through overrides and carried interests in certain regional unconventional plays in Nova Scotia and Newfoundland. In addition to the Atlantic Canadian properties, Contact is pursuing a new core area in Alberta's "Deep Basin" targeting the Montney Formation.
Forward Looking Information
This press release contains forward looking statements. More particularly, this press release contains statements concerning the anticipated use of the proceeds of the Private Placement. Although Contact believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because Contact can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The intended use of the proceeds of the Private Placement by Contact might change if the board of directors of the Company determines that it would be in the best interests of Contact to deploy the proceeds for some other expenditures.
The forward looking statements contained in this press release are made as of the date hereof and Contact undertakes no obligation to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
The Preferred Shares offered have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
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