Corridor Encounters Gas In Elgin Appraisal Program

Corridor Resources announced today the following update on the shale gas appraisal program in the Elgin area of southern New Brunswick.

Apache Canada, the operator pursuant to a joint venture program with Corridor, completed the drilling and casing of the Green Road B-41 and the Will DeMille G-59 horizontal wells in the second and third quarters of 2010, respectively. Strong gas shows were encountered in the horizontal section of both wells during drilling. These gas shows occurred while using high mud weights averaging 1350 kg/m3 on the Green Road B-41 well and averaging 1450 kg/m3 on the Will DeMille G-59 well.

Five slickwater fracture stimulation procedures were completed in each of the wells with the fracs averaging 230 tonnes of propant and 3560 cubic meters of water. The final frac in the "silty interval" of the Green Road B-41 horizontal well is approximately 630 meters from the silty interval of the Green Road G-41 vertical well drilled by Corridor in 2009. That interval in the vertical G-41 well was fraced with propane in 2009 and produced 42.4 mmscf over 185 hours, peaking at 11.7 mmscf/d with a final rate of 3.0 mmscf/d at approx. 700 psi.

After the plugs were drilled out in both horizontal wells, the B-41 well has recovered 1728 cubic meters of frac fluid (approx. 10 percent of total) and no gas to date and the G-59 well has recovered 805 cubic meters of frac fluid (approx. 4 percent of total) and negligible gas to date. Frac water recovery rates have declined significantly from both wells. Steps are being undertaken to recover additional amounts of frac water which could encourage the flow of gas into the wellbore.

Considering the strong gas flows from Corridor's nearby G-41 vertical well, and the strong gas shows encountered while drilling the two horizontal wells, the preliminary responses of these wells are both unexpected and perplexing. The operator is reviewing the frac operations and flowback data and is conducting extensive analysis and further testing in order to determine why the wells have responded in this manner, and to develop a go-forward approach in order to advance the Elgin shale gas appraisal program. Although the well response to date is perplexing, it is important to recognize that the evaluation of the development potential of the Elgin shale gas resource play is in its early stages.

Corridor also reports that Apache and Corridor have agreed to conduct tests on the South Branch G-36 oil well.


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