Corridor Reverts to Over-Balanced Drilling for McCully E-67

Corridor Resources Inc. reported today that under-balanced drilling operations at the McCully E-67 well have been terminated in favor of completing the drilling of the well using a conventional over-balanced drilling fluid.

While drilling with an under-balanced drilling fluid, the E-67 well encountered a section of highly fractured and faulted shale in the upper 150 m of the Frederick Brook formation at a depth of approximately 2630 meters. Following two failed attempts to drill through the highly fractured shale section, it was concluded that the instability of the well-bore would prevent further deepening of the well using an under-balanced drilling process.

Only minor gas flow was recorded while drilling under-balanced through the fractured Frederick Brook section, indicating that the fractured shale was incapable of significant rates of gas production in this well. Corridor has plugged back the well with cement into the shoe of the 9-5/8" casing and has reverted to an over-balanced mud system in an attempt to drill through the unstable hole section in the upper Frederick Brook shale formation.

Corridor's objective is to penetrate and evaluate the deeper dolomitic shale section encountered in the Frederick Brook formation near the bottom of the F-58 well where higher formation pressures and significant gas shows were encountered in early February, 2007.Corridor also plans to drill the E-67 well to a total depth of approximately 4500 meters in an attempt to reach and evaluate the sandstone reservoirs of the Dawson Settlement formation. Results from an evaluation of this deeper section of the E-67 well are expected to be available toward the end of February, 2008. Potash Corporation of Saskatchewan is a joint venture partner with Corridor in the E-67 well.

Corridor is currently drilling the McCully K-48 well and has just set the 9-5/8" intermediate casing at a depth of 1548 m. Corridor plans to drill and evaluate the Hiram Brook formation at this location, with results expected to be available in February, 2008.

Gross McCully natural gas production for the month of December averaged approximately 30 mmcf/day (20 mmcf/day net to Corridor).


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