Corridor Reports McCully Drilling And Re-Test Results
Halifax, Nova Scotia, January 19, 2006: - Corridor Resources Inc. (CDH - TSX-V) (the "Corporation") announced today that drilling and casing operations have been completed at the McCully D-57 well located near Sussex, New Brunswick. The well reached a total measured depth of 2,582 metres and encountered net gas bearing pay thicknesses totaling 50 metres in the Hiram Brook formation (composed of 23, 13, 5, 6 and 3 metres of pay in the A, B, C, D and E sands, respectively, and similar in log character to the O-66 and P-66 wells to the southwest). The well was drilled over-balanced with a conventional drill mud and is the 13th well to encounter natural gas bearing sands in the McCully field. Potash Corporation of Saskatchewan is a 50% participant in this well. Corridor plans to frac and test D-57 and other McCully wells later this year. The drilling rig is being mobilized to the C-67 well pad in preparation for drilling the J-67 well to a bottom hole location approximately 600 metres northeast of the surface well pad. The bottom-hole locations of the D-57 well and the planned J-67 well are shown on the map below.
Following the fracing operations last fall, the O-66 and C-67 wells cleaned up reasonably well on the initial testing, although it is expected that initial production rates will increase somewhat following an extended shut-in period. Consequently, Corridor elected not to re-test these two wells and the previously fraced D-48 and J-65 wells at this time.
The G-67ST and K-57 wells were re-tested this month to attempt to recover significant remaining downhole frac fluids and to determine if well productivities have improved following the short shut-in period. The G-67ST well productivity increased from 0.9 mm/d previously reported to 1.2 mm/d at the end of a 40 hour re-test period at approximately the same well test pressure (977 psi) as in the initial test. This represented approximately a 30% improvement in productivity and suggests potential further improvement following a longer shut-in period. The K-57 well, on the other hand, produced at approximately the same rate (0.9 mm/d) and pressure as previously measured and recorded at the end of a 61 hour initial flow period. Extended testing for an additional 40 hours resulted in a small reduction in flow rate to 0.8 mm/d. Production from this well has been adversely affected by the inability of the well to recover significant volumes of frac fluids during testing and by the presence of bitumen causing reduced permeability. An extended (multi-month) shut-in period is expected to assist in dispersing some of the frac fluids downhole and improving the productivity of this well. The K-57 well has been completed in the B sand only, as the A sand contained a perched water zone in this well. Corridor intends to frac the D sand in this well during the next stage of fracing operations later this year.
Initial pressure build-ups have now been completed on four recently fraced McCully wells (O-66, C-67, G-67ST and K-57) as well as on the previously fraced D-48 and J-65 wells. The results have been analyzed by APA Petroleum Engineering to develop production profiles for the wells based on extrapolating the initial test results over a 25 year production period. APA is expected to complete its report on the production forecasts for the six tested wells later this month and the results will be reported at that time.
Corridor continues to advance its plans to construct a gas gathering system, conditioning plant and pipeline lateral to connect the McCully field with markets in the Maritimes and New England via the Maritimes & Northeast Pipeline system by the end of this year.
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.
