Corridor Reports Progress On McCully Drilling And Development Activities
Halifax, Nova Scotia, February 15, 2007, (TSX - CDH): Corridor Resources Inc. reported today on progress with respect to its drilling and development activities at the McCully Field, located near Sussex in southern New Brunswick.
Progress at the McCully F-58 Well
The Nabors #4 drilling rig is currently drilling ahead at the McCully F-58 well at a depth of 3639 metres in the Fredericks Brook rock formation. The well has encountered a much thicker Fredericks Brook formation than was anticipated based upon interpretation of seismic and other geological information, and has yet to encounter the underlying Dawson Settlement formation. The first indications of siltstone and minor sandstone have been encountered at depths below 3500 metres, and may indicate the beginning of a transition into the Dawson Settlement formation. The Fredericks Brook formation is dominantly composed of interbedded organic dolomitic shale and shaley dolomite. Wireline logs run to a depth of approximately 3630 metres indicate that the formation is highly fractured in a number of intervals where significant gas shows have been recorded. Above normal formation pressures have been encountered during drilling, requiring higher mud weights and periodic flaring of the well during tripping operations. Corridor plans to drill another 70 to 100 metres deeper and to conduct limited open-hole tests of selected fractured intervals prior to running and cementing a casing liner from the top of the Fredericks Brook formation to total depth. Options for drilling the hole much deeper are limited by the rig capacity and ultimately by the strength of the drill string required for the hole size (152 millimetres diameter) for the particular hole configuration. Final completion and testing of the Fredericks Brook formation and Dawson Settlement (if reached) will be conducted during the planned frac program this fall. More details on the F-58 well results will be provided during the webcast presentation following Corridor's Annual Meeting commencing at 3:00 PM Calgary time today.
McCully Stage 2 Development Progress
Construction continues for the Stage 2 gas gathering system, gas processing plant and pipeline lateral (the "midstream facilities") to connect the McCully Field with the Maritimes & Northeast Pipeline. Approximately 80% of the main pipeline has been welded, and approximately 60% has been buried. Construction of the gas plant is approximately 50% complete, while construction of the gas gathering system is approximately 30% complete. Corridor expects that construction of all the facilities will be completed by April and that initial gas production will commence by late May following commissioning of the facilities."
The capital cost of the midstream facilities is now forecast to be $52.5 million, $1.9 million higher than projected in Corridor's previous estimate. Construction during the late fall and winter months is extending the time to construct these facilities and increasing the cost of completion.
Other Activities
Corridor has contracted a triple drilling rig from Nabors Drilling to drill longer reach development wells in the Hiram Brook formation and to drill deeper exploration wells in the Fredericks Brook and Dawson Settlement formations. The rig is expected to arrive at McCully in early March and to commence drilling the McCully P-76 well (100% Corridor) located approximately 600 metres west of the McCully M-66 well.
Corridor has executed an agreement with Emera Energy whereby Emera has been contracted to sell Corridor's share of McCully gas for the next two years. Emera is an experienced marketer of natural gas into the northeast US market area.
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.
For further information:
Corridor Resources Inc.#301, 5475 Spring Garden Road,
Halifax, Nova Scotia
B3J 3T2
Contact: Norman W. Miller, President and CEO
Tel: (902) 429-4511
Fax: (902) 429-0209
Web: http://www.corridor.ca/
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.
