Corridor Resources Inc.
TSX : CDH

Corridor Resources Inc.

May 14, 2008 19:40 ET

Corridor Announces First Quarter Earnings

HALIFAX, NOVA SCOTIA--(Marketwire - May 14, 2008) - (TSX:CDH): Corridor Resources Inc. ("Corridor") announced today its first quarter earnings. The financial statements and management's discussion and analysis for the three months ended March 31, 2008 have been filed on SEDAR at www.sedar.com and are available on Corridor's website at www.corridor.ca.

All amounts referred to in this press release are in Canadian dollars unless otherwise stated.

The following table provides a summary of Corridor's financial and operating results for the three months ended March 31, 2008.



Selected Financial Information

-------------------------------------------------------------------------
thousands of dollars, except per share amounts Three months ended
-------------------------------------------------------------------------
March 31 March 31
2008 2007
-------------------------------------------------------------------------
Revenues $20,179 $1,280
Net earnings (loss) $6,081 $(825)
Net earnings (loss) per share - basic $0.074 $(0.011)
Net earnings (loss) per share - diluted $0.073 $(0.011)
Cash flow from operations (1) $14,549 $(78)
Capital expenditures $17,982 $33,976
Gross proceeds from capital stock issues $12 $480
Total assets $242,483 $165,452
-------------------------------------------------------------------------
-------------------------------------------------------------------------


(1) Cash flow from operations is a non-GAAP measure. Cash flow from operations represents net earnings adjusted for non-cash items including depletion & depreciation, future income taxes, stock-based compensation and other non-cash expenses. See "Non-GAAP Financial Measures" in Corridor's management's discussion and analysis for the three months ended March 31, 2008.

First Quarter Highlights

- During Q1 2008, natural gas production averaged 19.7 mmscfpd net to Corridor (including production from penalty wells) with an average natural gas sales price of $10.78/mscf, resulting in net earnings of $6,081 thousand and basic and diluted net earnings per share of $0.074 and $0.073 respectively.

- Natural gas revenues for the three months ended March 31, 2008 increased to $19,316 thousand from $1,280 thousand for Q1 2007 due to the start-up of natural gas production from the McCully Field to the Maritimes and Northeast Pipeline in Q2 2007.

- Net earnings for Q1 2008 increased to $6,081 thousand from a net loss of $825 thousand for Q1 2007.

- During the quarter ended March 31, 2008, Corridor completed drilling the E-67 and K-48 wells (1.5 net wells) and commenced drilling the J-47 well (1 net well).



Q1 2008 Netback Analysis

-------------------------------------------------------------------------
thousands of dollars Three months ended
-------------------------------------------------------------------------
March 31 March 31
2008 2007
-------------------------------------------------------------------------
Natural gas revenues $19,316 $1,280
Royalty expense (1,286) (100)
Production expense (1,188) (56)
Transportation expense (2,655) -
-------------------------------------------------------------------------
Netback $14,187 $1,124
-------------------------------------------------------------------------

Natural gas production (mmscf) 1,792 83

Natural gas revenues ($/mscf) $10.78 $15.41
Royalty expense ($/mscf) 0.72 1.21
Production expense ($/mscf) 0.66 0.67
Transportation expense ($/mscf) 1.48 -
-------------------------------------------------------------------------
Netback ($/mscf) $7.92 $13.53
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Netback increased to $14,187 thousand for Q1 2008 from $1,124 thousand for Q1 2007 due to the additional production and sale of natural gas resulting from the completion of the midstream facilities connecting the McCully Field to markets throughout the M&NP on June 28, 2007.

During the quarter, Corridor tied in another five wells to the McCully gathering system for a total of 20 producing wells by the end of March 31, 2008. In Q1 2007 two wells were producing and connected to a nearby potash mill owned by Corridor's joint venture partner Potash Corporation of Saskatchewan ("PCS"). Prior to June 28, 2007, natural gas sales to PCS had been based on the N.Y. Harbour price of No. 2 fuel oil. Natural gas delivered to M&NP is sold to Corridor's gas marketer at prices referenced to Henry Hub (the published Platt's Gas Daily, Dracut mid-point price).

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.

Contact Information

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