Corridor Resources Inc.

Corridor Resources Inc.

September 27, 2007 08:00 ET

Corridor Provides an Update Report on Well Completion and Testing Operations at McCully

HALIFAX, NOVA SCOTIA--(Marketwire - Sept. 27, 2007) - Corridor Resources Inc. (TSX:CDH) reported today on the current status of continuing well completion and testing operations at the McCully natural gas field in southern New Brunswick. A total of 28 fracs in seven wells (F-58, H-76, P-76, D-66, E-38, J-38 and I-67) have been planned for this year at McCully, with approximately 25% now completed. The actual number of planned fracs to be completed this year will be evaluated as the program progresses. Extended flow-back operations for the fracced intervals in each well will not be undertaken until all the fracs for each well have been completed. When available, the final flow results will be reported for all the wells in the current frac program and will be incorporated in production commencing in January, 2008.

Well Completion Activities

Three small fracs have been completed in the Frederick Brook shale formation in the McCully F-58 well. The well is currently flowing gas at a rate of approximately 320,000 cubic feet per day at a very low well head pressure following build-up of frac fluid in the wellbore. A total of only 520 cubic meters of frac fluids have been recovered from 1412 cubic meters placed in the formation during the fraccing operations. In early October, Corridor plans to perforate the production casing and perform an acid squeeze on three additional intervals in the Frederick Brook shale prior to putting the well on a long-term flow test in an effort to recover additional frac fluids and improve the rate of gas production from the formation.

At other McCully wells, a frac of the "A" sand at the D-66 well (please refer to the well location map below) placed 97 tonnes of proppant (sand) along with 642 cubic meters of frac fluids in the formation. The zone flowed gas at an initial average rate of approximately 430,000 cubic feet per day at a flowing wellhead pressure of 575 psi after recovery of 243 cubic meters of frac fluids. Gas flow from the "A" sand has been shut in and the overlying "B" sand was fracced, placing 30 tonnes of proppant along with 433 cubic meters of frac fluid. Initial flow performance of the "B" sand will be determined following flow-back of frac fluids.

At the H-76 well, a pre-frac test of the lower part of the "A" sand recovered over-pressured formation water, resulting in cancellation of the planned frac for that interval. A frac of the indicated gas-bearing upper "A" sand and lower "B" sands was successful in placing 70 tonnes of proppant (sand) along with 514 cubic meters of frac fluid in the formation. The initial flow performance of this interval will be determined following flow-back of frac fluids. The zone will then be shut in to prepare for a pre-frac test of the fluid content and a potential frac of the upper "B" sand. The presence of formation water in the lower part of the "A" sand suggests that the southwesterly limit of gas reserves in the lower "A" sand has been reached in the H-76 fault block.

At the P-76 well, a frac of the upper part of the Frederick Brook formation placed 13 tonnes of proppant (sand) along with 297 cubic meters of frac fluid in the formation. The zone flowed gas at an initial rate of approximately 150,000 cubic feet per day at a low flowing wellhead pressure due to loading up of frac fluid in the wellbore and following recovery of 133 cubic meters of frac fluids. Gas flow from this interval has been shut in to prepare for a pre-frac test of the fluid content of the "A" sand prior to conducting a frac completion of that interval.

Drilling Related Activities

The Nabors #86 rig is drilling ahead at the McCully J-76 well at a depth of 2150 meters. Corridor expects to complete drilling, logging and casing operations at the J-76 well in the latter half of October, prior to drilling the next location (to be determined) from the same well pad. The Nabors #4 (double) drilling rig has run and cemented intermediate casing at a depth of 1952 meters at the New Harmony #1 well. Corridor expects to complete drilling, logging and casing operations at New Harmony by mid October. Corridor is drilling the New Harmony well as part of a farm-in on lands held by PetroWorth Resources Inc. announced on May 11, 2007. If the well is successful in encountering natural gas, Corridor plans to frac and flow-test the well later in October.

Corridor has contracted a second 'triple' drilling rig (Nabors #58) and will be moving it to New Brunswick in late October to commence drilling a deep test at the E-67 location. The well is designed to evaluate the Hiram Brook and Frederick Brook formations and will attempt to reach the Dawson Settlement formation. E-67 will be a 50/50 joint well with Potash Corporation of Saskatchewan.


On Friday, September 21, 2007 Corridor received approval from the New Brunswick Energy Utilities Board to expand its gas gathering system to tie in the F-58, E-38 and J-38 wells to Corridor's gas plant. Tie-in of the P-76, H-76 and D-66 wells were previously approved last year as part of the initial gathering system approval received in October, 2006. Construction has commenced on the tie-in of these wells and is expected to be completed by the end of December, 2007 at an estimated cost of $6.5 million and two months later than previously projected.

As a result of the deferred tie-in of the new wells and gas plant efficiency factors, McCully gas production for the balance of 2007 is currently forecast to average 30 million standard cubic feet per day (mmscf/day), of which approximately 20 mmsfc/day is net to Corridor's interest. However, Corridor has recently received notice from Maritimes & Northeast Pipeline that all service on M&NP will be curtailed for two days in late October and could be available only for firm service for the balance of the period between October 16th and 31st. Corridor estimates that this could reduce gas sales for October by as much as thirty percent. The limitations on service planned by M&NP are a result of maintenance requirements on the US portion of the M&NP system. Consequently, previously estimated revenues for combined Quarters 3 and 4 will be reduced by approximately $12 million, including gas price and foreign exchange adjustments. Commencing in January, 2008, and based on management's projected results for the current frac program, McCully production is forecast to increase to an initial rate of approximately 45 mmscf/day (30 mmscf/day net to Corridor) with the addition of the newly connected wells.

Maps are available on Marketwire's Web Site at the following address:

Corridor Resources Inc. is a Halifax, Nova Scotia based company focused on exploring and developing natural gas resources in the McCully Field and surrounding areas of southern New Brunswick. The Company has completed construction of a field gathering system, a gas plant, and a pipeline lateral connecting the McCully Field to markets through the Maritimes & Northeast Pipeline (M&NP). The Company initiated natural gas production to M&NP on June 28, 2007 and has a continuous development drilling program underway to add reserves and production capacity as field development expands. Corridor also has a number of potentially high impact exploration projects planned in New Brunswick and elsewhere in eastern Canada.

Forward Looking Statements

This press release contains certain forward looking statements relating to, but not limited to, Corridor's operations, anticipated financial performance, business prospects and strategies, including expectations relating to production levels; capital expenditure programs; the quantity of natural gas reserves; projections of market prices; projections of costs; supply and demand for natural gas; expectations regarding the ability to raise capital and to continually add to reserves through exploration and development; and treatment under governmental regulatory regimes. These statements are based on current expectations that involve numerous assumptions regarding factors and risks that could cause actual results to vary materially, including, without limitation to, the following factors: risks associated with oil and gas exploration, financial risks, substantial capital requirements, bank financing, government regulation, environmental, prices, markets and marketing, dependence on key personnel, dependence on Potash Corporation of Saskatchewan, Inc., availability of drilling equipment and access, risks may not be insurable, management of growth, expiration of licenses and leases, reserves estimates, seasonality, competition, conflicts of interest, Kyoto Protocol, issuance of debt, title to properties and hedging. There is no representation by Corridor that actual results achieved will be the same in whole or in part as those set out in the forward looking information. Furthermore, the forward looking statements contained in this press release are made as of the date hereof, and Corridor undertakes no obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events or otherwise.

Contact Information

  • Corridor Resources Inc.
    Norman W. Miller
    902-429-0209 (FAX)