HALIFAX, NOVA SCOTIA--(Marketwired - Dec. 21, 2016) - Corridor Resources Inc. ("Corridor") (TSX:CDH) announced today that it has recently entered into the following financial hedges in respect of natural gas:
These financial hedges, combined with the previous financial hedge announced on October 7, 2016 for 2,500 mmbtu per day from December 1, 2016 to March 31, 2017, will result in an average hedged price of $US6.30/mmbtu from November 2016 to March 2017 for an average natural gas production of 2,950 mmbtu per day (approximately 2,750 mmcf/d) which represents approximately 45% of Corridor's estimated production during this period. Corridor's remaining production will be sold at daily market prices in the New England markets.
As disclosed in the October 7, 2016 press release, Corridor partially shut-in its natural gas production from September to November, with plans to optimize the recovery of expected flush volumes to match the anticipated higher natural gas pricing at the Algonquin city-gates market ("AGT") from December 1, 2016 to March 31, 2017.
By entering into the above noted financial hedges, Corridor has now guaranteed $3.5 million out of an estimated $8.1 million of gross revenues for the period from November 1, 2016 to March 31, 2017. The estimated gross revenues are based on the unhedged production volumes sold at an average current future strip pricing at AGT of $US6.70/mmbtu for this period.
"Corridor's production optimization and hedge strategy, combined with a robust strip pricing forecast for our New England market is expected to result in strong cash flow from operations for Corridor's first quarter of 2017" said Steve Moran, President and CEO of Corridor. "We remain on track to meet our previous guidance of a working capital balance of $33.8 million as at March 31, 2017.
Corridor has updated its Corporate Presentation on its website, which can be accessed at www.corridor.ca.
Corridor is a Canadian junior resource company engaged in the exploration for and development and production of petroleum and natural gas onshore in New Brunswick and Québec and offshore in the Gulf of St. Lawrence. Corridor currently has natural gas production and reserves in the McCully Field near Sussex, New Brunswick. In addition, Corridor has a shale gas prospect in New Brunswick, an offshore conventional hydrocarbon prospect in the Gulf of St. Lawrence and an unconventional hydrocarbon prospect through a 21.67% interest in Anticosti Hydrocarbons L.P., a joint venture which has undiscovered resources on Anticosti Island, Québec.
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: business plans and strategies and gross revenues, including revenues from the financial hedge agreements, expectations regarding natural gas production and prices at AGT and expectations that Corridor will meet its previously disclosed guidance, resulting in a working capital balance of $33.8 million as at March 31, 2017.
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 Corridor and its shareholders.
Forward-looking statements are based on Corridor's current beliefs and the terms of its financial hedge agreements as well as assumptions made by, and information currently available to, Corridor concerning anticipated financial performance, business prospects, strategies, regulatory developments, future natural gas commodity prices, 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. 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 Corridor's Annual Information Form for the year ended December 31, 2015.
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.