Corridor Resources Inc.

Corridor Resources Inc.

June 20, 2008 09:22 ET

Corridor Closes $55 Million Bought Deal Financing


Corridor Resources Inc. (TSX:CDH) announced today that it has closed a previously announced bought deal financing of 3,800,000 common shares of the Corporation ("Common Shares") at a price of $10.60 per share and 1,150,000 Common Shares issued on a "flow-through" basis ("Flow-Through Shares") at a price of $13.00 per share for aggregate gross proceeds of approximately $55 million.

RBC Capital Markets as co-lead underwriter and sole bookrunner, Jennings Capital Inc. as co-lead underwriter, FirstEnergy Capital Corp., D&D Securities Company, Beacon Securities Limited and Acadian Securities Incorporated were the underwriters in respect of the short form prospectus offering.

The underwriters have an option, exercisable for a period of 30 days from the date hereof, to purchase up to an additional 570,000 Common Shares at a price equal to the offering price to cover over-allotments and for market stabilization purposes.

Net proceeds from the offering will be used primarily to fund the acceleration of the appraisal and economic assessment of the prospective Frederick Brook shale development in the Elgin area of southern New Brunswick, to fund a program to accelerate production at the McCully Field and for working capital.

The outstanding securities of Corridor have not been registered in the United States and the Common Shares and the Flow Through Shares to be issued under this offering have not been and will not be registered under the United States securities legislation and may not be offered or sold in the United States except in transactions exempt from such registration. This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction where such offer, solicitation or sale would be unlawful.

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. In particular, this press release contains forward-looking statements pertaining to the Corporation's planned use of proceeds from the financing. 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. 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 the Corporation and its shareholders. Forward-looking statements are based on the Corporation's current beliefs as well as assumptions made by, and information currently available to, the Corporation concerning business prospects, strategies, future natural gas commodity prices, future natural gas production levels, 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. By their very nature, forward-looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward-looking statements will not be achieved. These factors may be found under the heading "Risk Factors" in the Corporation's annual information form for the year ended December 31, 2007, and in the Corporation's most recent financial statements, management's discussion and analysis, management information circular, material change reports and news releases. Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive.

The forward-looking statements contained in this press release are made as of the date hereof and the Corporation 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.

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