Corridor Resources Inc.
TSX : CDH

Corridor Resources Inc.

December 19, 2008 08:00 ET

Corridor Provides Update on Operations in New Brunswick

HALIFAX, NOVA SCOTIA--(Marketwire - Dec. 19, 2008) - Corridor Resources Inc. (TSX:CDH) provided an update today on its exploration, development and production operations in southern New Brunswick. Twenty-six McCully Field gas wells are expected to be on production prior to the end of December, resulting in a projected 2008 exit gross natural gas production rate of 32 mmscf/day (23.8 mmscf/day net to Corridor), less than previously projected. The new 2008 production wells include the McCully P-67, C-57, K-48, C-48 and J-47 wells which have been successfully frac'ed and are currently being placed on production.

Two horizontal wells drilled in 2008 at the McCully I-47 and N-66 locations have encountered problems which have prevented them from being completed and achieving their production potential prior to the end of this year. Initial attempts to install and pressure test a casing patch at I-47 to correct a leak in the well have taken longer than expected as a result of a recent failure of a down-hole hydraulic setting tool. A new set of tools are being mobilized to install the casing patch in early 2009 and once the casing patch has been successfully installed and pressure tested, Corridor plans to conduct a multi-stage frac in the well and place it on production. The frac equipment which Corridor has been contracting this year will be returning to western Canada prior to the end of this month to undertake winter work there, and will not be available to resume work at McCully until after break-up in the early spring. Alternatively, Corridor is evaluating contracting frac equipment from another region that may be available to frac I-47 in early 2009. At N-66, new evidence indicates the well has frac'ed into an over-pressured 'perched' water zone underlying the "heel" of the horizontal part of the wellbore. Formation water has accumulated in the heel, which Corridor believes is restricting the flow of natural gas to the surface. Corridor is preparing to install a sliding sleeve in the production tubing which, if successful, will permit gas flow to by-pass the water restriction and produce at rates expected to be in the range between 2 and 3 mmscf/day by early January.

Corridor is currently coring part of the Frederick Brook shale formation at a depth below 1900 meters in the Green Road G-41 well located approximately 4 kilometers north of the village of Elgin in southern New Brunswick. The vertical well is expected to be drilled to a total depth of approximately 2500 meters prior to being logged and cased in preparation for conducting a minimum of 2 fracs in the Frederick Brook shale once frac equipment is next available in the region (as discussed for I-47). Corridor has completed the drilling and logging of a core-hole that cored the entire (thinner) Frederick Brook shale interval at the Mapleton N-11 well, located approximately 8 kilometers northeast of Elgin. The extensive amount of continuous core will assist significantly in evaluating the geological, mineralogical and organic nature of the shale at this location. The well reached a total depth of 810 meters in red beds (basement rocks) prior to logging and is currently being abandoned. The coring rig will be mobilized in early January to drill 2 core holes in the Sally's Brook area (approximately 15 kilometers north of the McCully Field). These core holes are designed to evaluate the Hiram Brook and Frederick Brook stratigraphy in this northern part of Corridor's licences.

Initial processing of the 3-D seismic surrounding the South Branch G-36 oil-well discovery is now completed and interpretation of the data will commence next week. (Please refer to the yellow patch on the following map which outlines the area of the 3-D survey). The new data will be critically important in mapping the potential extent of the Caledonia oil field and in identifying the most favourable locations for drilling follow-up wells to determine the potential size of the oilfield.

To view the Prospects, Leads and Exploration Areas in the Sussex and Elgin Subbasins map, please visit the following link: http://media3.marketwire.com/docs/CDH1219.pdf.

Corridor expects to end the 2008 fiscal year with approximately $11 million working capital and has no debt. Cash flow for 2008 is expected to meet our previous projection of $55 million. The capital budget for 2009 is expected to be approved and released by mid January, 2009.

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 relating to proposed frac'ing, testing, completion and tie-in of wells at the McCully Field and Corridor's projected natural gas production as well as proposed frac'ing of the Green Road G-41 well in the Elgin area.

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.

These forward-looking statements are based on Corridor's current beliefs as well as assumptions made by, and information currently available to, Corridor concerning results from such development program. 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, 2007, and also in Corridor's most recent interim financial statements and management's discussion and analysis.

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)
    Website: www.corridor.ca