/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES/

(TSX-V:CEX)

CALGARY, Dec. 21, 2012 /CNW/ - Contact Exploration Inc. ("Contact" or the "Company") (TSXV: CEX) is pleased to announce that it has closed the initial tranche of its previously announced non-brokered private placement (the "Private Placement") of common shares in the capital of the Company, to be issued on a "flow-through" basis pursuant to the Income Tax Act (Canada) ("Flow-Through Shares").  In this initial tranche, the Company has issued 9,273,033 Flow-Through Shares, at a price of $0.24 per share, for aggregate gross proceeds of $2,225,527.92.

Contact expects to use the proceeds of the Private Placement to incur eligible Canadian Exploration Expenses to fund its ongoing capital programs prior to December 31, 2013.  These qualifying Canadian Exploration Expense expenditures will be renounced to subscribers effective December 31, 2012.  Contact expects to carry out the closing of one additional tranche of the Private Placement on or before December 31, 2012, the proceeds of which are not expected to exceed $50,000.

The Flow-Through Shares issued in this initial tranche of the Private Placement are subject to a four-month hold period under applicable securities laws, which hold period expires on April 22, 2013.

About Contact Exploration Inc.

Contact Exploration Inc. is a public oil and gas company which has a long-term history of operating in Atlantic Canada and has recently demonstrated success in Alberta's liquids-rich Montney Formation tight gas play. For more information, please see the Company's website: www.contactexp.com

ADVISORY ON FORWARD-LOOKING STATEMENTS: This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements.  In particular, but without limiting the forgoing, this press release contains statements concerning the anticipated second closing of the Private Placement and the anticipated use of the proceeds of the Private Placement. 

Forward-looking statements or information are based on a number of material factors, expectations or assumptions of Contact which have been used to develop such statements and information but which may prove to be incorrect. 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 Canadian Exploration Expense expenditures.

The forward-looking statements contained in this press release are made as of the date hereof and Contact undertakes no obligations 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Contact Exploration Inc.