Corridor Farms Out Interests In The McCully Area, New Brunswick
Halifax, Nova Scotia, October 9, 2001: Corridor Resources Inc. (CDH - CDNX) announced today that it has entered into a farmout agreement with EOG Resources Canada Inc. (EOG). EOG has agreed to farm in and operate certain of Corridor's interests in the McCully natural gas discovery area. The agreement covers Corridor's 100% interest in two exploration licences and its 50% interest in a third exploration licence. The agreement excludes the four-section area covered by a joint venture agreement between Corridor and Potash Corporation of Saskatchewan Inc., where the first three McCully wells have been drilled, as well as the quarter section area containing the fourth McCully well.
Under the terms of the farmout agreement, EOG has committed to drill, evaluate and complete three test wells. EOG has options to drill additional wells to earn an interest in all of the farmout lands. Upon completion of 12 wells or the expenditure of $50 million in seismic, drilling and development on the farmout lands, EOG will have earned 50% of Corridor's interest in the farmout lands subject to certain payout conditions. Corridor will retain a 15% gross over-riding royalty on natural gas production with respect to the earning wells during the payout period.
Norm Miller, Corridor's president, expressed his pleasure in having EOG join Corridor for the further exploration of the McCully natural gas discovery. "We believe that the McCully field could contain sufficent natural gas reserves to justify a pipeline connection to markets through the Maritimes & Northeast Pipeline system, and EOG brings the expertise and experience to further explore this discovery."
Corridor is a junior oil and gas exploration company, headquartered in Halifax, Nova Scotia, with interests onshore in New Brunswick, Prince Edward Island and Quebec and offshore in the Gulf of St. Lawrence.
EOG is a wholly owned subsidiary of EOG Resources, Inc., one of the largest independent (non-integrated) oil and gas companies in the United States, and the operator of substantial proved reserves in the U.S., Canada and offshore Trinidad. EOG Resources, Inc. is listed on the New York Stock Exchange and is traded under the ticker symbol, "EOG".
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.
