Initial testing operations on the fraced wells are set to begin later this week and will involve drilling out the remaining plugs separating frac intervals, recovering incremental volumes of frac fluids where possible, and measuring initial natural gas flow rates for each well over a production period of several days. Following the flow period, each well will be shut in for an extended period (at least two to three weeks) for pressure build-up analyses. Corridor expects to report within the next three to four weeks on the initial flow rates and pressures achieved.
Drilling operations at the McCully B-58 well are progressing at a depth below 2200 meters in the Hiram Brook formation. The well is being drilled underbalanced with nitrogen, and is expected to reach a total depth of approximately 2500 meters in the Fredericks Brook shale formation within the next few days. The Nabors 4 drilling rig will then be relocated to the O-66 well pad from where it will directionally drill the D-57 well to a bottom hole location approximately 600 meters to the east of the surface location (please refer to the map below). PCS has elected not to participate in the D-57 well.
The McCully field, located near Sussex in south central New Brunswick, is estimated to contain in excess of one trillion cubic feet of gas-in-place in the Hiram Brook formation. Two wells have been on production since April, 2003 supplying natural gas at an average rate of two million cubic feet per day to a limited local market. The B-58 well is the twelfth well to be drilled in the McCully field, with all previous eleven wells encountering natural gas. The well is aimed at adding reserves and production capacity to supply natural gas markets in New Brunswick and New England via a 30 mile pipeline to connect the McCully field to the Maritimes & Northeast pipeline system. The C-67, G-67, K-57, O-66, B-58 and planned D-57 wells are located within an area that was independently appraised by APA in December, 2004, and that represents less than 20% of the total field area. The APA reserves report assigned proven gas-in-place of 217 billion cubic feet (bcf) and proven and probable recoverable reserves of 119 bcf (79 bcf net to Corridor's interest) to the area assessed. APA is currently updating this report to reflect the gas reserves status at Corridor's fiscal year end (August 31, 2005).
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