Corridor Announces First Quarter Earnings
Halifax, Nova Scotia, May 14, 2008, (TSX - CDH): Corridor Resources Inc. ("Corridor") announced today its first quarter earnings. The financial statements and management's discussion and analysis for the three months ended March 31, 2008 have been filed on SEDAR at www.sedar.com and are available on Corridor's website at www.corridor.ca.
All amounts referred to in this press release are in Canadian dollars unless otherwise stated.
The following table provides a summary of Corridor's financial and operating results for the three months ended March 31, 2008.
Selected Financial Information
| thousands of dollars, except per share amounts | Three months ended | |
|---|---|---|
| March 31, 2008 | March 31, 2007 | |
| Revenues | $20,179 | $1,280 |
| Net earnings (loss) | $6,081 | $(825) |
| Net earnings (loss) per share - basic | $0.074 | $(0.011) |
| Net earnings (loss) per share - diluted | $0.073 | $(0.011) |
| Cash flow from operations (1) | $14,549 | $(78) |
| Capital expenditures | $17,982 | $33,976 |
| Gross proceeds from capital stock issues | $12 | $480 |
| Total assets | $242,483 | $165,452 |
| (1)Cash flow from operations is a non-GAAP measure. Cash flow from operations represents net earnings adjusted for non-cash items including depletion & depreciation, future income taxes, stock-based compensation and other non-cash expenses. See "Non-GAAP Financial Measures" in Corridor's management's discussion and analysis for the three months ended March 31, 2008. | ||
First Quarter Highlights
- During Q1 2008, natural gas production averaged 19.7 mmscfpd net to Corridor (including production from penalty wells) with an average natural gas sales price of $10.78/mmscf, resulting in net earnings of $6,081 thousand and basic and diluted net earnings per share of $0.074 and $0.073 respectively.
- Natural gas revenues for the three months ended March 31, 2008 increased to $19,316 thousand from $1,280 thousand for Q1 2007 due to the start-up of natural gas production from the McCully Field to the Maritimes and Northeast Pipeline in Q2 2007.
- Net earnings for Q1 2008 increased to $6,081 thousand from a net loss of $825 thousand for Q1 2007.
- During the quarter ended March 31, 2008, Corridor completed drilling the E-67 and K-48 wells (1.5 net wells) and commenced drilling the J-47 well (1 net well).
Q1 2008 Netback Analysis
| thousands of dollars | Three months ended | |
|---|---|---|
| March 31, 2008 | March 31, 2007 | |
| Natural gas revenues | $19,316 | $1,280 |
| Royalty expense | (1,286) | (100) |
| Production expense | (1,188) | (56) |
| Transportation expense | (2,655) | - |
| Netback | $14,187 | $1,124 |
| Natural gas production (mmscfpd) | 1,792 | 83 |
| Natural gas revenues ($/mmscf) | $10.78 | $15.41 |
| Royalty expense ($/mmscf) | 0.72 | 1.21 |
| Production expense ($/mmscf) | 0.66 | 0.67 |
| Transportation expense ($/mmscf) | 1.48 | - |
| Netback ($/mmscf) | $7.92 | $13.53 |
Netback increased to $14,187 thousand for Q1 2008 from $1,124 thousand for Q1 2007 due to the additional production and sale of natural gas resulting from the completion of the midstream facilities connecting the McCully Field to markets throughout the M&NP on June 28, 2007.
During the quarter, Corridor tied in another five wells to the McCully gathering system for a total of 20 producing wells by the end of March 31, 2008. In Q1 2007 two wells were producing and connected to a nearby potash mill owned by Corridor's joint venture partner Potash Corporation of Saskatchewan ("PCS"). Prior to June 28, 2007, natural gas sales to PCS had been based on the N.Y. Harbour price of No. 2 fuel oil. Natural gas delivered to M&NP is sold to Corridor's gas marketer at prices referenced to Henry Hub (the published Platt's Gas Daily, Dracut mid-point price).
Corridor is a junior resource company engaged in the exploration for and development and production of petroleum and natural gas onshore in New Brunswick, Prince Edward Island and Québec and offshore in the Gulf of St. Lawrence. Corridor currently has reserves of natural gas at only one property, the McCully Field near Sussex, New Brunswick. In June 2007, Corridor completed the construction of a field gathering system, a gas plant and a pipeline lateral connecting the McCully Field to markets through the Maritimes & Northeast Pipeline.
For further information:
Corridor Resources Inc.#301, 5475 Spring Garden Road,
Halifax, Nova Scotia
B3J 3T2
Contact: Norman W. Miller, President
Tel: (902) 429-4511
Fax: (902) 429-0209
Web: http://www.corridor.ca/
This press release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes. In particular, this press release contains forward-looking statements pertaining to the quantity of natural gas reserves, net present values of future net revenues from reserves. Statements relating to "reserves" are forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the reserves described exist in the quantities predicted or estimated and can profitably be produced in the future.
Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized. Actual results will differ, and the difference may be material and adverse to Corridor and its shareholders.
Forward-looking statements are based on Corridor's current beliefs as well as assumptions made by, and information currently available to, Corridor concerning anticipated financial performance, business prospects, strategies, regulatory developments, future natural gas commodity prices, future natural gas production levels, the ability to obtain equipment in a timely manner to carry out development activities, the ability to market natural gas successfully to current and new customers, the impact of increasing competition, the ability to obtain financing on acceptable terms, and the ability to add production and reserves through development and exploration activities. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that forward-looking statements will not be achieved. These factors may be found under the heading "Risk Factors" in Corridor's Annual Information Form for the year ended December 31, 2007.
The forward-looking statements contained in this press release are made as of the date hereof and Corridor does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
