Corridor Announces Test Rates For McCully Wells
Halifax, Nova Scotia, October 24, 2002: Corridor Resources Inc. (CDH - TSX-V) announced today the results of flow tests from three exploration wells drilled and tested by EOG Resources Canada Inc. (EOG) at the McCully field near Sussex, New Brunswick, as part of farmin operations on Corridor licences conducted earlier in 2002. EOG drilled and tested the McCully D-48, H-28 and J-65 wells and conducted completion operations on the McCully C-75 well (Corridor/PCS #4) prior to informing Corridor on October 21, 2002, that it would discontinue its farmin activities at McCully. (Please refer to the attached map below showing the locations of the McCully wells).
Eight zones were fraced in the three EOG drilled wells and three in the McCully C-75 well with mixed results. At the D-48 well, three sandstone intervals have been fraced, with more than 700 cubic metres of water being injected into the formation during fracing operations. The completed zones were commingled and flowed at increasing rates of gas production as the injected frac fluids were slowly recovered. The flow rate gradually increased from less than 200,000 cubic feet per day to a rate of 1,300,000 cubic feet per day just prior to being shut in by EOG in mid August, 2002. Less than 30% of the 700 cubic metres of water injected into the formation had been recovered as of that date.
At the H-28 well two zones have been fraced, with one of the zones having flowed natural gas at an initial rate of 122,000 cubic feet per day. A third zone, which has the best apparent reservoir characteristics based on conventional core and well logs, has been perforated but not fraced. The well is currently shut in.
At the J-65 well, the deepest gas bearing zone was fraced and flowed gas at initial rates greater than 2,000,000 cubic feet per day. A frac attempt on a second zone in this well resulted in only a minor gas flow. Fracing operations on a third zone in this well did not result in any gas flow. A commingled flow rate for all three zones resulted in gas production of approximately 1,200,000 cubic feet per day as the well attempted to unload and recover down-hole fluids, mainly water, injected during fracing operations. The well is currently shut in, having recovered 283 cubic metres (approximately 50%) of the 550 cubic metres of fluids injected during completion operations.
Three fracs have been conducted on the C-75 well. The deepest zone is located below the interpreted gas/water interface for the southwestern part of the McCully field and recovered several cubic metres of formation water. Two subsequent fracs within the gas column resulted in minor flows of natural gas (60,000 cubic feet per day). The well is currently shut in, having recovered approximately 30% of the liquids injected during completion operations.
All of the above wells were drilled using water-based drilling muds and completed (fraced) with water-based completion fluids. Corridor's assessment of the data indicates that these fluids have damaged formation productivity and resulted in significantly reduced post-frac flow rates. The resulting flow rates are considerably lower than rates tested at the air-drilled McCully P-66 (#2) well, which flowed gas at an initial measured rate in excess of 3,000,000 cubic feet per day, and at a rate greater than 2,000,000 cubic feet per day at a tubing head pressure of 2100 pounds per square inch after several days of production. Corridor intends to drill and complete future McCully wells with air or nitrogen in order to avoid the formation damage caused by water-based drilling and completion fluids.
Corridor is developing plans for re-testing the McCully J-65 and D-48 wells, and expects to announce commencement of workover activities for these wells in the near future.
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.
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.
