Rig Contracted By Shell To Drill Corridor's Anticosti Prospects
Halifax, Nova Scotia, February 26, 1998: Corridor Resources Inc. (CDH - ASE) was advised today by Shell Canada Limited that Shell has contracted the Ralex #4 drilling rig, from Quebec, to drill two wells on Anticosti Island. Shell expects to mobilize operations in May and to spud the first well around the first of June. These wells are the first of four exploration wells which Shell has committed to drill and operate on exploration licenses held by Corridor on Anticosti Island, Quebec. During the next three years, a total of 4 wells are to be drilled and 500 kilometres of seismic conducted at Shell's sole risk and expense, up to the maximum earning expenditure of $20 million. Shell has also advised Corridor that operations on Anticosti Island are expected to commence this May, subject to receiving approval from the relevant Quebec government departments.
Upon completing its farmin obligations as set forth in the agreement, Shell will earn an undivided 100% working interest and will retain 100% of the funding obligations in the farmout lands, subject to a 12% over-riding royalty payable to Corridor on production from exploration licenses covering an area of 260,000 acres (the "A" lands), and a 10% over-riding royalty payable to Corridor on production from the exploration licenses covering approximately 2,110,000 acres (the &B& lands) on the balance of Anticosti Island, excluding Vaureal Park.
Once 5 million barrels of oil equivalent have been produced and removed from the island, Corridor's 12% and 10% over-riding royalties will automatically convert to 35% and 30% Corridor working interests in the "A" and &B& lands respectively, at no cost to Corridor.
Corridor has engaged N. C. Fuller & Associates of London, England to carry out investor relations and corporate communications services in Europe for Corridor.
Corridor is a junior natural resource corporation focussing on oil and gas exploration in eastern Canada. The head office of Corridor is located in Halifax, Nova Scotia, and its common shares trade on the Alberta Stock Exchange under the symbol CDH.
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; and treatment under governmental regulatory regimes. 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, 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.
