Corridor Resources Inc.
TSX : CDH

Corridor Resources Inc.

July 13, 2011 08:35 ET

Corridor Reports Independent Macasty Shale Resource Assessment for Anticosti Island

HALIFAX, NOVA SCOTIA--(Marketwire - July 13, 2011) - (TSX:CDH) - Corridor Resources Inc. ("Corridor") reported today the results of an independent resource assessment of the Macasty Shale by qualified reserves evaluator Sproule Associates Limited of Calgary ("Sproule") dated July 12, 2011. Based on data available at the time, Sproule's best estimate of the Total Petroleum Initially-In-Place is 33.9 (19.8 net to Corridor) billion barrels of oil equivalent (Bboe) for Corridor's land holdings. The probability that the Total Petroleum Initially-In-Place exceeds 21.4 (12.3 net to Corridor) Bboe is 90% (low estimate) and the probability that the Total Petroleum Initially-In-Place exceeds 53.9 (31.9 net to Corridor) Bboe is 10% (high estimate).

Sproule was engaged to conduct a resource assessment of the Macasty shale across Anticosti Island where Corridor hold interests varying from 50% to 100% on licenses covering more than 1.5 million gross acres (approximately 900,000 net acres). The report is effective as at June 1, 2011.

The following table shows a summary of the resource assessment.

Estimates of Total Petroleum Initially-In-Place1
Macasty Shale, Anticosti Island, Quebec
As At June 1, 2011
Classification Company
Interest
Lands
Low
Estimate
(P90)
3
Bboe6
Best
Estimate
(P50)
4
Bboe6
High
Estimate
(P10)
5
Bboe6
Undiscovered
Petroleum Initially-In-Place
2
Total Lands 21.4 33.9 53.9
Corridor Interest 12.3 19.8 31.9

1. Total Petroleum Initially-In-Place (PIIP) is that quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered.

2. Undiscovered Petroleum Initially-In-Place (equivalent to Undiscovered Resources) are those quantities of petroleum that are estimated, on a given date, to be contained in accumulations yet to be discovered. The recoverable portion of undiscovered petroleum initially in place is referred to as Prospective Resources, the remainder as Unrecoverable. Undiscovered resources carry discovery risk. There is no certainty that any portion of these resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. A recovery project cannot be defined for this volume of undiscovered petroleum initially-in-place at this time.

3. The probability that the quantity actually in place is equal to or greater than the estimate is 90%.

4. The probability that the quantity actually in place is equal to or greater than the estimate is 50%.

5. The probability that the quantity actually in place is equal to or greater than the estimate is 10%.

6. Bboe-Billions of barrels of oil equivalent. Oil equivalent has been used to reflect uncertainty in the type of hydrocarbons expected to be encountered across the holdings. BOE's may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Corridor believes the significant positive factors relevant to the estimates are:

  • The Macasty core from the Chaloupe well drilled in 2010 contained oil and gas. This well is located on the high side of the Jupiter fault, where most of the Corridor acreage is located, and where the shale is interpreted to be oil prone;
  • The Macasty shale is equivalent to the Utica shale of the St. Lawrence Lowlands of Quebec, which has been reported to have produced oil and gas on test;
  • Core analysis indicates that the Macasty has similar petrophysical and geochemical characteristics to Utica fields found in the North-East US;
  • The Macasty shale is a prolific source rock which is within the oil generation window over approximately three quarters of the island (most of it located in the Corridor land holdings).

National Instrument 51-101 disclosure requires that the resource estimates must be classified according to Canadian Oil and Gas Evaluation Handbook definitions and disclosed in the most specific category. Under these definitions, Sproule has classified the Total Petroleum Initially-In-Place as Undiscovered Resources, based on the following:

  • A core of the Macasty shale from the Chaloupe well contained residual oil;
  • The Macasty shale has not been flow tested from any well on Anticosti Island;
  • The resources are inferred to exist based on the interpretation and mapping of limited pyrolysis, core, well log and seismic data;
  • This is an unconventional shale oil resource that will require a stimulated completion for evaluation and, until an appropriately researched project has been undertaken to identify and evaluate potentially recoverable volumes, it is premature to speculate whether the Macasty contains recoverable or unrecoverable resources.

The value in conducting this assessment lies purely in its use as a basis for determining whether it appears worthwhile to conduct further investigation into these resources. Corridor is actively evaluating options regarding further exploration to determine the potential of the resource, including the possibility of farming out some of the Corridor interest to an experienced shale oil developer. The Anticosti exploration program is at an early stage; further work is required to determine the potential for commercially viable resource recovery, prior to considering development.

Corridor is an Eastern Canadian 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 Québec and offshore in the Gulf of St. Lawrence. Corridor currently has natural gas reserves and production in the McCully Field near Sussex, New Brunswick and discovered crude oil reserves in the Caledonia Field near Sussex, New Brunswick in 2008. In addition, Corridor has contingent resources and discovered resources of shale gas in Elgin, New Brunswick.

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 presentation contains forward-looking statements pertaining to: business plans and strategies; the characteristics and potential of the Macasty shale; exploration plans; and the possibility of engaging in discussions with potential farm out partners to assist in the development of the Macasty shale. Statements relating to "resources" are forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources described exist in the quantities predicted or estimated and can profitably be produced in the future.

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 as well as assumptions made by, and information currently available to, Corridor concerning the characteristics of the Macasty shale, business prospects, strategies, regulatory developments, future natural gas and oil commodity prices and the ability to obtain equipment in a timely manner to carry out exploration and development activities. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Unknown risks and uncertainties include, but are not limited to risks associated with oil and gas exploration, financial risks, substantial capital requirements, bank financing, government regulation, environmental, prices, risks may not be insurable and reserves and resources estimates. Further information regarding these factors and additional factors may be found under the heading "Risk Factors" in Corridor's Annual Information Form for the year ended December 31, 2010.

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

  • Philip R. Knoll
    President
    Corridor Resources Inc.
    (902) 429-4511
    (902) 429-0209 (FAX)
    www.corridor.ca