Under the terms of the agreement, each of Corridor and PetroWorth will make available to the other party seismic information relating to certain properties on Prince Edward Island and in New Brunswick. Prior to August 12, 2007, Corridor will have the option to elect to drill an exploration well to a minimum depth of 2800 meters on PetroWorth's Exploration License 02-03, located towards the eastern end of the Island.
If the option is exercised, drilling operations at the well are to be commenced prior to February 1, 2008, although Corridor may elect to drill and evaluate the well this summer, including a frac stimulation treatment if the well is successful. Corridor would then have the option, prior to October 1, 2008, to drill two more wells on the license and to pay 50% of the costs of these wells to earn a 50% working interest in the license.
Subject to completion of the earning program described above, Corridor will have a further option to finance and drill a total of two more wells on four other PetroWorth licenses on PEI in order to earn a 50% working interest in those additional licenses. In total, Corridor has the option to earn a 50% interest in more than 400,000 acres on Prince Edward Island if drilling and frac stimulation operations prove to be successful in producing natural gas at commercial rates in PEI.
Activities on PetroWorth's lands, if undertaken, would be additional to the planned drilling, evaluation and completion of a well on Corridor's Green Gables structure this summer.
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 constructing 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.
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