Corridor Resources Inc.

Corridor Resources Inc.

March 23, 2007 08:00 ET

Corridor Updates Drilling and Development Activities at McCully

HALIFAX, NOVA SCOTIA--(CCNMatthews - March 23, 2007) - Corridor Resources Inc. (TSX:CDH) reported today that drilling operations have commenced at the P-76 well in the McCully natural gas field located near Sussex in southern New Brunswick. The well is the first to be drilled at McCully using the Nabors #86 (triple) drilling rig which was recently mobilized to the field from Alberta. The well is designed to evaluate and test the Hiram Brook formation at a location approximately 600 meters west of the M-66 well and to penetrate and evaluate the top 550 meters of the underlying Frederick Brook dolomitic shale formation. It is expected that it will take approximately 40 days to drill, log and case the well in preparation for well stimulation (fraccing) and testing operations planned to be undertaken in late summer.

The Nabors #4 (double) drilling rig has been moved to a surface location approximately 2 kilometers east northeast of the McCully D-48 well where Corridor plans to drill the McCully E-38 well, the 22nd well to be drilled in the McCully Field. E-38 will be directionally drilled to evaluate the natural gas potential of the Hiram Brook formation and the upper part of the Frederick Brook formation at a bottom-hole location approximately 600 meters south southeast of the surface location (please refer to the accompanying map). Corridor plans to spud the well early next week and to drill and case it to a measured depth of approximately 3200 meters by mid May in preparation for completion activities planned for late summer.

Corridor is making preliminary plans to perforate and flow test two of the fractured dolomitic shale intervals encountered in the Frederick Brook formation at the McCully F-58 well (please refer to Corridor's February 23 news release). Completion plans will be finalized following receipt of results from laboratory tests on drill cuttings and sidewall core samples and the contracting of equipment and services required to conduct the operations. These initial flow tests will not be fracture stimulated, and are expected to be conducted in late May or early June following finalization of testing plans. Corridor plans to frac these intervals (if necessary) and to conduct further testing when frac equipment is on site in late summer.

Corridor is nearing completion of construction of the main pipeline which will connect the McCully gas plant with the Maritimes & Northeast Pipeline (M&NP). Construction of the gathering system and gas plant is at an advanced stage. However, timing of required approvals, weather conditions and general tightness in the construction industry have contributed to increased capital costs and have delayed the expected completion date of the facilities. Corridor now projects the capital cost of these facilities to total $59.6 million (compared to our previous forecast of $52.5 million) and for production to M&NP to commence in early June.

A map is available at the following address:

Corridor Resources Inc. is a Halifax, Nova Scotia based company focused on exploring and developing natural gas resources in the McCully Field and surrounding areas of southern New Brunswick. The Company is in the latter stages of constructing a field gathering system, a gas plant, and a pipeline lateral to connect the McCully Field to markets through the Maritimes & Northeast Pipeline (M&NP). The Company plans to initiate natural gas production to M&NP by late spring 2007, at a planned initial gross rate of 35 mmscf/day (63% net to Corridor), and has a continuous development drilling program underway to add reserves and production capacity as field development expands. Corridor also has a number of potentially high impact exploration projects planned in New Brunswick and elsewhere in eastern Canada.

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, President
    902-429-0209 (FAX)