Corridor Applies For Pipeline Approval
Halifax, Nova Scotia, February 8, 2006: - Corridor Resources Inc. (CDH - TSX-V) (the "Corporation") pleased to announce today that an application has been submitted to the New Brunswick Public Utilities Board (PUB) to construct and operate a natural gas pipeline connecting the McCully natural gas field with the Maritimes & Northeast Pipeline.
The proposed pipeline will be 8 inches in diameter and approximately 49 kilometres in length, and will open up markets for McCully gas in the Maritimes and New England. Pending timely regulatory approval, the pipeline could be available for initial deliveries by November, 2006. Corridor expects to have initial gas deliveries in the order of 25 million standard cubic feet per day (mmscf/d) by the end of 2006.
The pipeline will have ultimate capacity for up to 88 million cubic feet per day with maximum compression facilities, providing Corridor with an opportunity to expand production from initial levels.
APA Petroleum Engineering Inc. ("APA") has completed its analysis of the bottom-hole pressure data for the four McCully wells (C-67, G-67ST, K-57 and O-66) which were hydraulically fractured ("fraced") during October/November, 2005, as well as for the re-tested D-48 and J-65 wells. APA concluded that all six wells showed evidence of improved reservoir flow properties near the wellbore and that high-efficiency wells can be constructed at McCully using hydraulic fracture stimulation techniques. APA also concluded that, since average productivity for the six wells was higher than expected, the 2.5 mmscf/d/well average initial productivity estimated in the December 2005 Reserves Report is a reasonable expectation for fracced development wells in the McCully Field. APA reiterated its confidence that Corridor's planned development project is economic. APA's letter report has been posted on Corridor's website http://www.corridor.ca/.
The McCully field, located near Sussex in south central New Brunswick, is estimated by Corridor 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 almost three years supplying natural gas at a combined average rate of two million cubic feet per day to a limited local market. The continuing excellent production performance of these wells has demonstrated the potential for future wells in the McCully field to supply significant volumes of natural gas to larger markets in New Brunswick and New England. Corridor's planned development is located within an area that was independently appraised by APA Petroleum Engineering (APA) in December, 2005, and that represents less than 20% of the total field area. The APA report assigned proved plus probable gas-in-place of 252 billion cubic feet (bcf) and proved plus probable recoverable sales gas reserves of 119 bcf (79 bcf net to Corridor's interest) to the area assessed (please refer to map below).
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.
