Corridor Updates McCully Production Tests
Halifax, Nova Scotia, October 26, 2006, (TSX - CDH): - Corridor Resources Inc. (CDH:TSX) (the "Corporation") announced today that it has now completed production testing of the McCully wells that were fracced this past summer. Four wells (B-58, E-57, D-57 and H-28) have recently been retested following short, approximately one-month, shut-in periods. The results of the initial clean-up tests and results for the follow-up retests for the four wells were recorded at the end of the respective flow periods and are presented in the following table:
| Well | Test Timing | Sands Fraced | Flow Duration (hours) | Choke Size (mm) | Flow Rate (mmscf/ day) | Head Pressure (psi) | Index (scf/d/psi2) |
|---|---|---|---|---|---|---|---|
| B-58 | September | B | 34 | 7.15 | 1.3 | 1263 | 0.149 |
| October | B | 96 | 7.94 | 1.8 | 844 | 0.171 | |
| E-57 | September | A | 37 | 7.93 | 0.7 | 742 | 0.078 |
| October | A | 96 | 10.32 | 1.6 | 413 | 0.163 | |
| D-57 | September | A | 61 | 8.73 | 0.5 | 230 | 0.045 |
| October | A | 96 | 7.14 | 1.0 | 630 | 0.105 | |
| H-28 | September | unnamed | 46 | 7.15 | 0.3 | 470 | 0.023 |
| October | unnamed | 120 | 50.8 | 0.1 | 22 | TBD |
The B-58, E-57 and D-57 wells all showed improvement in their productive capacity relative to the initial test rates. Corridor anticipates further improvement in their productive capacities following the additional shut-in period prior to Stage 2 production start-up. The B-58 well has been fracced in both the "A" and "B" sands. However, subsequent mechanical problems in the well resulted in a blockage in the wellbore between the "A" and "B" sands. Efforts to eliminate the blockage have failed and consequently the well has been completed as a single zone "B" producer at this time.
The wells listed in the table above are in addition to the ten McCully wells (O-66, M-66, K-66, J-66, J-67, C-67, G-67, K-57, D-48 and J-65) which have been previously fracced, completed and tested and which will also be tied into the new gas plant as part of Stage 2 development. They are also in addition to the two initial McCully wells (A-67 and P-66) which continue to flow gas to the PCS well at a rate of approximately 2 mmscf/d).
The H-28 well was fracced in an unnamed sand at a depth of approximately 2800 metres. During testing, the well was slugging liquids (mainly frac water) and was unable to unload much of the approximately 300 cubic metres of frac fluids that remain unrecovered in the wellbore and formation. Following a significant shut-in period, Corridor anticipates that the well's flow performance will improve significantly in a manner similar to that experienced in the past at the D-48 and J-65 wells. The H-28 well, drilled in 2002, is located approximately 5 kilometres east of the nearest Phase 2 planned producer (ie D-48, and is therefore not shown on the enclosed map), and consequently is not planned to be tied into the gas plant at this time.
Deep Dawson Settlement Test
The Nabors #4 drilling rig is currently on standby, awaiting government approval for the construction of a well pad at the F-58 location in preparation for drilling a deep well to a planned depth of approximately 3500 metres to test the natural gas potential of both the Hiram Brook and Dawson Settlement Formations at that location. The proposed F-58 well pad is located approximately 400 metres northwest of the McCully B-58 well (please see map above) and is designed to encounter the Dawson Settlement Formation at a depth approximately 200 metres higher than the deep test previously planned at the O-76 location. The F-58 well will be the 20th well drilled to date in the McCully field. Construction of the F-58 well pad will commence as soon as government approval for the site is obtained, with drilling operations expected to commence approximately in mid November.
Planned construction of the O-76 well pad will commence as soon as government approval for the site is obtained, providing a surface location for future McCully wells in that area of the field.
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.
