Corridor Updates Drilling Activities At McCully
Halifax, Nova Scotia, June 6, 2005: Corridor Resources Inc. (CDH - TSX-V) announced today that drilling operations are proceeding at the McCully G-67 well located to the east of the McCully C-67 well and to the north of the McCully A-67 discovery well, as shown on the accompanying map. The G-67 well, currently drilling at a depth below 1700 metres, will be directionally drilled to a total depth of approximately 2500 metres to the base of the Hiram Brook formation. It is expected that testing of the G-67 well will be undertaken during the week of the 20th of June, following a re-test of the McCully C-67 well. An analysis of the initial test results from the C-67 well by APA Petroleum Engineering (APA) indicated the presence of a significant "skin" factor during the initial flow period, negatively affecting flow performance at the time.
The Potash Corporation of Saskatchewan has elected to participate in the G-67 well. Provided the well test results are positive, a third well (E-67) is planned to be directionally drilled from the same surface drilling pad to a bottom-hole location to the west of the G-67 well.
The McCully field, located near Sussex in south central New Brunswick, is estimated to contain in excess of one trillion cubic feet of gas-in-place in the Hiram Brook formation. Two wells have been on production for two years supplying natural gas at an average rate of two million cubic feet per day to a limited local market. The G-67 well is the tenth well to be drilled in the McCully field and is part of the build-up of reserves and production capacity to supply significant volumes of natural gas to markets in New Brunswick and New England. Corridor intends to connect the McCully field by a 30 mile pipeline to the Maritimes & Northeast Pipeline system. The C-67, G-67 and planned E-67 wells are located within an area that was independently appraised by APA in December, 2004, and that represents less than 20% of the total field area. The APA reserves report assigned proven gas-in-place of 217 billion cubic feet (bcf) and proven and probable recoverable reserves of 119 bcf (79 bcf net to Corridor's interest) to the area assessed.
To date, none of the existing McCully wells have been drilled to a depth sufficient to penetrate and evaluate the underlying Dawson Settlement formation expected to be present across the McCully field area. It has been estimated that this deeper horizon may contain volumes of natural gas significantly greater than the overlying Hiram Brook formation currently being evaluated. The McCully G-67 and E-67 wells are being directionally drilled to the Hiram Brook formation, consistent with our focus to establish production for the pipeline connection to Maritimes & Northeast. Corridor intends that a future vertically drilled well will test the deeper Dawson Settlement formation at an estimated additional (incremental) cost of $2.5 million.
Corridor is a junior oil and gas exploration and production 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.
