Corridor Announces Bought Deal Financing
Halifax, Nova Scotia, May 14, 2007, (TSX - CDH): Corridor Resources Inc. ("Corridor" or the "Corporation") (TSX: CDH) is pleased to announce today that it has entered into an agreement, with a syndicate of underwriters including RBC Capital Markets as sole bookrunner and Jennings Capital Inc. as co-lead manager, pursuant to which such underwriters have agreed to purchase, on a bought-deal basis, 3,540,000 common shares of the Corporation at a price of $11.30 per share and 1,400,000 flow-through common shares of the Corporation at a price of $14.30 per share. Gross proceeds of the offering will be approximately $60 million.
The underwriters will have an option, exercisable for a period of 30 days from the date of closing, to purchase up to 15% in additional common shares at a price equal to the offering price to cover over-allotments and for market stabilization purposes.
The issue will be an underwritten public offering in all provinces in Canada, by way of a short form prospectus, and in the U.S. on a private placement basis pursuant to exemptions from the registration requirements pursuant to Rule 144A and Regulation D of the United States Securities Act of 1933, as amended.
The financing is scheduled to close on or about June 1, 2007 and is subject to regulatory approval and completion of definitive documentation. Net proceeds from the offering will be used primarily to fund Corridor's revised exploration and development program for southern New Brunswick and Prince Edward Island and for general corporate purposes. As part of the revised program, Corridor plans to mobilize a second triple rig to the McCully Field to accelerate development drilling and to facilitate the exploration and development of deeper horizons, including the Frederick Brook and Dawson Settlement formations. Following drilling of an additional well (J-38) at McCully, Corridor plans to mobilize the Nabors Rig #4 (double rig) to Prince Edward Island to drill an exploration well near the eastern end of the Island as part of a farm-in program to earn a 50% interest in lands held by PetroWorth Resources Inc. This well is in addition to the drilling and completion of the Green Gables #3 well planned in Corridor's previously announced 2007 budget. In other activities, Corridor plans to drill a horizontal shale gas well near Elgin, New Brunswick, in place of drilling the Miller Brook and Mapleton wells previously planned for the Elgin area. Three stratigraphic core-holes are also planned to be drilled this fall in the Sally's Brook area, located approximately 15 kilometres north of McCully. The revised program also includes an expansion of this summer's frac stimulation program, as well as the addition of an inlet separator to maximize gas flow through the McCully gas plant. Funding will also be provided to conduct a 3-D seismic survey on Prince Edward Island to be undertaken this fall, provided the Green Gables #3 well is successful.
Corridor Resources Inc. is a Halifax, Nova Scotia based company focused on exploring and developing natural gas resources in the McCully Field and surrounding areas of southern New Brunswick. The Company is in the latter stages of completing a field gathering system, a gas plant, and a pipeline lateral to connect the McCully Field to markets through the Maritimes & Northeast Pipeline (M&NP). The Company plans to initiate natural gas production to M&NP by mid June, 2007, at a planned initial gross rate of 35 mmscf/day (approximately 63% net to Corridor), and has a continuous development drilling program underway to add reserves and production capacity as field development expands. Corridor also has a number of potentially high impact exploration projects planned in New Brunswick and elsewhere in eastern Canada.
The outstanding securities of Corridor have not been registered in the United States and the common shares and the flow through common shares to be issued under this offering have not been and will not be registered under the United States securities legislation and may not be offered or sold in the United States except in transactions exempt from such registration. This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction where such offer, solicitation or sale would be unlawful.
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.
