Corridor Resources Inc.
TSX : CDH

Corridor Resources Inc.

October 16, 2008 07:55 ET

Corridor Updates Exploration and Development Activities in New Brunswick

HALIFAX, NOVA SCOTIA--(Marketwire - Oct. 16, 2008) - Corridor Resources Inc. (TSX:CDH) reported today that the South Branch G-36 exploration well is currently drilling ahead at a depth of approximately 2566 meters in the Frederick Brook shale. The well encountered a thick Hiram Brook formation within the interval 1380 meters to 2194 meters containing 33 meters of net natural gas bearing sands and a further 46 meters of net reservoir sand with unknown fluid content, based on well logs and using a 4% porosity cut-off. The well is currently being deepened to evaluate the characteristics and natural gas potential of the Frederick Brook shale, including the cutting of full diameter cores. The current deepening of the South Branch G-36 exploration well is providing an opportunity to evaluate the shale gas potential of the Frederick Brook formation at that location, negating the need to drill and evaluate one of the previously planned shale gas evaluation wells at Elgin. Once total depth is reached at G-36, the well will be cased to the base of the pay intervals within the Hiram Brook formation and the intervals of primary interest will be frac'ed and flow tested to confirm fluid content and productivity. Nabors Rig #86 will then be relocated approximately 20 kilometers to the east to drill the first Frederick Brook shale gas appraisal well in the Elgin area at the Green Road O-50 location.

Following completion of drilling operations at the horizontal McCully N-66 location, the Nabors Rig #58 has been relocated to the I-39 well pad where it has been placed in position to drill the McCully C-29 well. Drilling operations have been temporarily suspended at C-29 while Corridor assesses the pace of forward drilling operations in the context of the current economic downturn. Corridor has a strong balance sheet with current working capital in excess of $20 million and no debt, and is in the process of planning its capital expenditure program for the remainder of the year and for 2009. Corridor expects to further strengthen its net cash flow from the McCully Field in 2009, partially dependent upon results from its 2008 frac campaign that is currently under way. Corridor also expects to benefit financially from having pre-sold a portion of its gas production for the coming winter season (November 1, 2008 through March 31, 2009). The forward sales are priced at Dracut, Massachusetts and consist of 5,000 MMBtu/day at a price of US$14.40/MMBtu and an additional 5,000 MMBtu/day at a price of US$15.49/MMBtu.

Fraccing operations at McCully have now been completed at the P-67, C-57, K-48 and C-48 wells and are nearing completion in the J-47 well. Fracturing of the N-66 horizontal well is expected to commence next week using the Packers Plus technology, followed by similar fracturing operations in the horizontal I-47 well in November. The results to date from fraccing operations in the vertical wells are encouraging, with frac water clean-up and testing operations in various stages of completion before more reliable production test rates can be determined and reported. These reports will be forthcoming over the next number of weeks as these results are obtained and these new wells are added to the McCully production stream. Several changes to this year's frac program for the vertical wells appear to be contributing to these encouraging results, including conducting smaller fracs and including CO2 spears and larger concentrations of methanol in the frac fluids.

Corridor's most recent corporate presentation is available for review on its website at www.corridor.ca.

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.

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 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 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, 2007.

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.

A map of the Current McCully Development is available at the following adress: http://media3.marketwire.com/docs/CORMAP.pdf

Contact Information

  • Corridor Resources Inc.
    Norman W. Miller
    President
    902-429-4511
    902-429-0209 (FAX)
    www.corridor.ca