Corridor Resources Inc.
TSX : CDH

Corridor Resources Inc.

September 09, 2009 08:00 ET

Corridor Successfully Fractures and Completes the McCully L-38 and P-47 Wells

HALIFAX, NOVA SCOTIA--(Marketwire - Sept. 9, 2009) - Corridor Resources Inc. (TSX:CDH) reported the initial results of fracturing and flow-testing of the McCully L-38 and P-47 wells located in the northeastern segment of the McCully natural gas field in southern New Brunswick. The wells were fractured with liquid propane followed by flow-back and initial flow test operations. This was the first time that fracturing with propane was conducted in the McCully Field, as completion operations in previous years had mainly used combinations of water and methanol as the frac fluid. The positive results (described below) are attributed partially to reservoir characteristics and partially to the successful application of propane as the frac fluid. Corridor's technical staff is reviewing seismic and other data to identify a number of additional drilling locations in the vicinity of these wells for potential inclusion in the 2010 drilling program.

Four fractures were separately propagated in the P-47 well, including two in the "E" sand and two in the "G" sand. The four zones were then commingled and flow tested. Initial flow-back (primarily gaseous propane) was directed to the flare stack for a short period of time to avoid exceeding heating value limits acceptable to Maritimes & Northeast Pipeline (M&NP). Once the percent of propane present in the flow-back declined to acceptable levels, the flow-back gas was directed to the gas plant for an initial test period of 46 hours. At the end of this initial test period the flow rate was measured at 2.6 mmscf/day at a flowing wellhead pressure of 18,600 kPa (2,702 psi). The flow rate was constrained to ensure the composite McCully production did not exceed the heating value limits acceptable to M&NP. Longer term production will be required to clean up the amounts of propane (approximately 14%) remaining in the produced gas and to more accurately project the long term performance of the well. Based on the initial results, Corridor estimates the initial production capacity of the well to be 9 - 10 mmscf/day at the McCully gathering system line pressure (3,500 kPa or 500 psi). The well is currently shut in for a pressure build-up and to run production tubing.

Three fractures were separately propagated in the L-38 well, including an initial frac and re-frac of the lower "E" sand and one frac in the upper "E" sand. The lower "E" sand flowed natural gas at a disappointing rate of 0.4 mmscf/day at a flowing wellhead pressure of 20 psi after 256 hours of flow time. Subsequent analysis of recovered fluids indicates that acid used to spearhead the fracture may have chemically reacted with the propane gelling agent. A bridge plug was set below the upper "E" sand to segregate the lower zone for production in the future and to ensure the upper "E" sand completion was not compromised by contaminated fluids from the lower interval. The upper "E" sand was successfully fractured without using an acid spear. Initial flow-back (primarily gaseous propane) was directed to the flare stack for a short period of time to avoid exceeding heating value limits acceptable to M&NP. Once the percent of propane present in the flow-back declined to acceptable levels, the flow-back gas was directed to the gas plant for an initial test period of 79 hours. At the end of this initial test period the flow rate was measured at 2.5 mmscf/day at a flowing wellhead pressure of 24,400 kPa (3,536 psi). The flow rate was constrained to ensure the composite McCully production did not exceed the heating value limits acceptable to M&NP. Longer term production will be required to clean up the amounts of propane (approximately 11%) remaining in the produced gas and to more accurately project the long term performance of the well. Based on the initial test results, Corridor estimates the initial production capacity of the well to be 12 - 13 mmscf/day at the McCully gathering system line pressure (3,500 kPa or 500 psi). The well is currently shut in for a pressure build-up and to run production tubing.

The L-38 and P-47 wells have the initial capacity to add significantly to the current production from the McCully Field. However, given the current low level of gas prices, consideration is being given to restricting rates of production until market conditions improve. Further guidance on estimated average daily production and operating budget for 2009 will be dependent on the outcome of this consideration.

In other activities, the McCully I-47 well has been connected to the gathering facilities and is currently producing to the gas plant at a rate of approximately 0.45 mmscf/day.

Work-over operations, as previously disclosed, aimed at improving rates of production from several underperforming McCully production wells are scheduled to begin in the next week.

The McCully Development Map with Gathering System and Gas Plant is available at the following address: http://media3.marketwire.com/docs/MAPCDH_0909.jpg

Corridor is a junior resource company engaged in the exploration for and development and production of petroleum and natural gas onshore in New Brunswick, Prince Edward Island and Quebec and offshore in the Gulf of St. Lawrence. Corridor currently has reserves of natural gas at only one property, the McCully Field near Sussex, New Brunswick. In June 2007, Corridor completed the construction of a field gathering system, a gas plant and a pipeline lateral connecting the McCully Field to markets through the Maritimes & Northeast Pipeline.

Forward Looking Statements

This press release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes. In particular, this press release contains forward-looking statements pertaining to the following: work-over program, initial production capacity, projected production levels and natural gas prices.

Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. These factors include, but are not limited to: risks associated with oil and gas exploration, financial risks, substantial capital requirements, bank financing, government regulation, environmental, prices, markets and marketing, issuance of debt, variations in exchange rates and hedging. Further information regarding these factors may be found under the heading "Risk Factors" in Corridor's annual information form for the year ended December 31, 2008 and its most recent management's discussion and analysis. Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized. Actual results will differ, and the difference may be material and adverse to Corridor and its shareholders.

Forward-looking statements are based on Corridor's current beliefs as well as assumptions made by, and information currently available to, Corridor concerning anticipated financial performance, business prospects, strategies, regulatory developments, future natural gas and oil commodity prices, exchange rates, future natural gas production levels, the ability to obtain equipment in a timely manner to carry out development activities, the ability to market natural gas successfully to current and new customers, the impact of increasing competition, the ability to obtain financing on acceptable terms, and the ability to add production and reserves through development and exploration activities. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. The forward-looking statements contained in this press release are made as of the date hereof and Corridor does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

Contact Information

  • Corridor Resources Inc.
    Norman W. Miller
    President
    902-429-4511
    902-429-0209 (FAX)
    www.corridor.ca