Corridor Discovers Oil at South Branch G-36
Wednesday, December 3, 2008: Corridor Resources Inc. (CDH - TSX) reported today that it has made a potentially significant oil discovery at its South Branch G-36 well situated 3 kilometers southeast of the McCully natural gas field in southern New Brunswick. The G-36 well penetrated a thick sequence of Hiram Brook sands containing indeterminate fluid content based on well logs prior to being drilled to a total depth of 2642 meters, nearly 500 meters into the underlying Frederick Brook shale. The well has been cased and two frac stimulation treatments have been carried out over two intervals within the Hiram Brook formation. The first frac, conducted over 10 meters of potentially gas bearing sands within the depth interval 1757 - 1840.5 meters in the lower Hiram Brook formation, yielded a show of oil and no measurable amounts of gas and is considered to be tight. The second frac was conducted in a 38 meter thick sand within the depth interval 1574 - 1612 meters in the upper Hiram Brook formation. The frac placed 30 tonnes of proppant prior to being prematurely concluded due to a frozen water line which may have reduced the effectiveness of the frac. Following 10 days of flow-back and clean-up of frac fluids, the well was flowing clean, 45° API oil and no water at a measured rate of 59 barrels of oil per day through production tubing. The well is currently shut in awaiting installation of a pump to reduce down-hole pressure and increase the rate of production prior to undertaking long-term testing later in December to evaluate the economic potential of the well. An additional 31 meters of potential oil pay (previously reported as potential gas pay) in the upper Hiram Brook formation have not as yet been completed in this well.
The G-36 well is located on the southern flank of the Elgin Subbasin, where Corridor has recently completed a $2.5 million 3-D seismic program in the area surrounding the well. Following completion of the initial interpretation of the new seismic in early 2009, Corridor plans to drill an initial offset well to commence appraisal of the discovery. The G-36 oil discovery has been named the Caledonia Field in recognition of the southern bounding basement rocks of the Caledonia highlands.
McCully Gas Field Activities
Frac'ing, testing, tie-in and well clean-up activities are continuing at the McCully Field. Operations to clean up the N-66 horizontal well and turn it into production are progressing, resulting in an increasing test rate of 2.9 mmscf/day at a wellhead pressure of approximately 500 psi. The well has been temporarily shut in to clean out a sand plug at the base of the production tubing. Operations to install a casing patch in the I-47 horizontal well are planned to be completed by mid-month followed by a planned four-stage frac of the "E" sand later in the month. Production from the J-47 well appears to be stabilizing at a rate of approximately 3 mmscf/day at a flowing wellhead pressure of 600 psi 34 days after coming on-stream at an initial rate of 7.1 mmscf/day. Corridor expects to have all of the 2008 completions tied in and on production later this month and to achieve a gross field year-end exit production rate of between 35 and 40 mmscf/day, depending upon the results of current well clean-up activities and the success of the multi-stage frac in the I-47 horizontal well.
Elgin Shale Gas Activities
Drilling activities at two shale gas appraisal wells in the Elgin area (located approximately 20 kilometers to the east of the McCully Field) are progressing. The Green Road G-41 well has been drilled by Nabors Rig #86 to a depth of 1118 meters and intermediate casing has been run and is currently being cemented in place. This well will be deepened to penetrate and partially core the Frederick Brook shale prior to conducting two fracs in the well later this month or early in the New Year. The Logan coring rig is currently drilling ahead at the Mapleton N-11 well at a depth of 301 meters after setting surface casing at a depth of 176 meters. Corridor plans to core a full section of the Frederick Brook shale in N-11 to assist in appraising the characteristics of the shale at this relatively shallow location.
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 and CEO
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 relating to proposed frac'ing, testing, completion and tie-in of wells at the McCully Field and Corridor's projected natural gas production as well as proposed frac'ing of the Green Road G-41 well in the Elgin area.
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.
These forward-looking statements are based on Corridor's current beliefs as well as assumptions made by, and information currently available to, Corridor concerning results from such development program. 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, and also in Corridor's most recent interim financial statements and management's discussion and analysis.
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.
