Corridor Resources Inc.

Corridor Resources Inc.

November 27, 2006 20:12 ET

Corridor Announces Year End Earnings and Filings Under NI 51-101

HALIFAX, NOVA SCOTIA--(CCNMatthews - Nov. 27, 2006) - (TSX:CDH) Corridor Resources Inc. announced today net earnings of $56 thousand for the year ended August 31, 2006 compared to $1,120 thousand for the year ended August 31, 2005. Corridor's earnings per share were $0.001 for the year ended August 31, 2006 compared to $0.025 in the previous year. The decrease in annual earnings mostly reflects higher stock-based compensation expense reflecting the Company's need to attract and maintain key personnel.

For the year ended August 31, 2006 revenues increased to $5,289 thousand compared to $4,419 thousand in the previous year due to stronger commodity prices offset slightly by a decrease in production. Cash provided by operating activities was $3,725 thousand for the year ended August 31, 2006, compared to $2,043 thousand for the previous year, reflecting this increase in revenues and increased interest income from the investment of $40 million gross proceeds received from the April 2006 share offering.

Corridor announced today that it has filed Form 51-101F1: Statement of Reserves Data and Other Oil and Gas Information for the year ended August 31, 2006, Form 51-101F2: Report of Independent Qualified Reserves Evaluator and Form 51-101F3: Report of Management and Directors under National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. Copies of the filings can be obtained electronically through the SEDAR system at

On November 13, 2006, the Corporation determined to change its financial year end from August 31 to December 31 to be consistent with most reporting issuers in the oil and gas industry.

Corridor has signed a credit agreement with the Royal Bank of Canada for a $30 million non-revolving term loan to finance a portion of the midstream facilities.

Corridor also provided an update regarding construction of the McCully Stage 2 midstream facilities. Approximately 85% of the pipeline right-of-way has been cleared and 65% has been graded in preparation for trenching. Horizontal drilling under wetlands, stream crossings and highways has commenced. The major components of the gas conditioning plant are under construction, including the plant foundation and modular components constructed offsite.

A number of factors have contributed to slippage in the project schedule, including a longer than expected approval process and unusually wet autumn weather conditions, resulting in the bulk of the construction period being pushed into the winter months. In view of this reality, Corridor and its primary contractors, AMEC and RB Sommerville, have conducted a reassessment of the project schedule. Corridor expects to complete gas plant construction and pipeline installation operations by early spring, followed by commissioning of the facilities during April and early May. First gas deliveries to Maritimes & Northeast Pipeline are now forecast to commence in early May, later than the Corporation had previously forecast. Efforts are underway with our contractors to determine areas where it may be possible to regain schedule and move forward the expected time of first gas deliveries. The total cost of the Stage 2 midstream facilities is currently forecast to be $49 million.

Corridor also announced that Douglas Foster was appointed as Chairman of the Corporation's Board of Directors.

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 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; treatment under governmental regulatory regimes; and expectations regarding the construction of the necessary midstream facilities to connect the McCully Field to the M&NP. 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, delay in construction of midstream facilities, 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)