Corridor Resources Inc.

Corridor Resources Inc.

January 16, 2007 08:55 ET

Corridor Reports Progress on McCully Drilling and Development Activities

HALIFAX, NOVA SCOTIA--(CCNMatthews - Jan. 16, 2007) - Corridor Resources Inc. (TSX:CDH) reported today on progress with respect to its drilling and development activities at the McCully Field, located near Sussex in southern New Brunswick.

Progress at the McCully F-58 Well

The Nabors #4 drilling rig is currently preparing to drill ahead at the McCully F-58 well in the upper part of the Fredericks Brook Formation. The well has been cased and cemented to a depth of 2832 meters through the Hiram Brook Formation and into the top of the Fredericks Brook Formation. The well encountered 9 meters and 15 meters of net gas pay in the "B" and "A" sands respectively. Schlumberger's analysis of the well logs indicates that the "A" sand has a calculated average porosity of 6.2% and a calculated average water saturation of 38% over the 15 meter net pay interval. While the "A" sand is clearly gas bearing, it has a higher water saturation than generally experienced in other McCully wells. Numerous pressure measurements confirm that the "A" sand has a formation pressure of approximately 4600 psi, or 700 psi greater than normal hydrostatic pressure for the interval depth (-2644 meters subsea). The relatively high pressure recordings suggest that the zone is sitting at least 600 meters above any normally pressured free water aquifer and within an over-pressured gas bearing structure. Corridor plans to frac and produce the "A" and "B" sands as part of its completion program later this year.

A map of the McCully Drilling Program is available on CCNMatthews' Web site at the following address:

The Hiram Brook Formation was encountered approximately 100 meters deeper than expected, and consequently Corridor now expects to encounter the Dawson Settlement Formation at a depth of approximately -3135 meters subsea during the first half of February. The F-58 well is the 20th successful gas bearing well in the Hiram Brook Formation to date in the McCully Field and is the first well designed to explore and evaluate the deeper Dawson Settlement Formation.

McCully Stage 2 Development Progress

Construction is well underway for the Stage 2 gas gathering system, gas processing plant and pipeline lateral (the "midstream facilities") to connect the McCully Field with the Maritimes & Northeast Pipeline. Right-of-access has been secured with all landowners and 100% of the pipeline right-of-way has been cleared. Approximately 43% of the main pipeline has been welded, and approximately 30% has been buried. Construction of the gas plant is approximately 25% complete, while construction of the gas gathering system is approximately 20% complete. Corridor expects that construction of all the facilities will be completed by April and that initial gas production will commence by mid May following commissioning of the facilities.

The capital cost of the midstream facilities is now forecast to be $50.6 million, $1.5 million higher than projected in Corridor's previous estimate. Construction during the late fall and winter months is extending the time to construct these facilities and increasing the cost of completion.

McCully Stage 2 Production Forecast

Corridor has upgraded its production forecast for 2007 following Stage 2 start-up as a result of a more detailed analysis of production test results for the thirteen completed wells that will initiate Stage 2 production. Based on this analysis and coupled with the projected design capacity of the gas plant at various operating pressures, Corridor is now forecasting that initial Stage 2 production will be in the order of 35 mmscf/day once the plant is fully operational. In August/September, 2007, Corridor plans to frac, test and complete seven new McCully wells, resulting in estimated year-end 2007 exit production rates for Stage 2 development of 40 to 45 mmscf/day, with Corridor's share projected to be in the range of 25 to 30 mmscf/day.

Corridor is a junior oil and gas exploration and production company, headquartered in Halifax, Nova Scotia, with interests onshore in New Brunswick, Prince Edward Island and Quebec, and offshore in the Gulf of St. Lawrence.

Forward Looking Statements

This press release contains forward looking statements relating to certain production test results from Corridor's operations. These statements are based on current expectations that involve numerous assumptions regarding factors and risks that could cause longer term production performance to vary materially. 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)