Corridor Resources Inc. has entered into a revised agreement with PetroWorth Resources Inc. regarding natural gas exploration activities on Prince Edward Island.
Under the terms of the revised agreement PetroWorth will finance 100% of the costs of fracturing and testing the initial two zones in the Green Gables #3 well in early August to a maximum cost of $2 million to earn a 10% working interest in Corridor's Green Gables license 04-03. Corridor expects to announce the flow test results by the end of August. Corridor shall have the option (until September 5, 2008) to elect to locate and drill a total of two exploration wells (including at least one frac in each well) on lands comprising PetroWorth licenses 03-01, 03-02, 04-05, 04-06 and 04-07 prior to July 31st, 2009 to earn a 50% working interest in these licenses. Corridor and PetroWorth have also agreed that each shall have the right to back into a 50% working interest in any license acquired by the other party on Prince Edward Island during the next five years. This new agreement revises the previous agreement between Corridor and PetroWorth announced on May 11th, 2007.
In drilling activities, the McCully I-47 well is drilling ahead in the horizontal leg of the well at a measured depth of 3620 meters in the "E" sand of the Hiram Brook formation. Corridor expects to complete drilling operations at this well this week and to undertake a fracturing program later this summer using the Packers Plus multi-stage fraccing technology. Corridor holds a 100% working interest in the I-47 well. Following completion of drilling operations at I-47, the Nabors Rig #86 is to be relocated to drill the South Branch G-36 exploration well, commencing around the second week of August.
The McCully N-66 horizontal well is drilling ahead at a measured depth of 1550 meters prior to setting intermediate casing. Corridor plans to drill this well horizontally through the "A" sand of the Hiram Brook formation (between the M-66 and K-66 wells) and to undertake a fracturing program later this summer using the Packers Plus multi-stage fraccing technology. Corridor and Potash Corporation of Saskatchewan each hold a 50% working interest in the N-66 well.
In other completion activities, Corridor reported that fracturing and initial testing operations are under way at the McCully P-67 and C-57 wells. Corridor expects to report on the flow test results for these wells following completion of testing operations in September, at which time the wells will be tied into the McCully gas gathering system and commence production to markets through Maritimes & Northeast Pipeline. Corridor and Potash Corporation of Saskatchewan each hold a 50% working interest in the P-67 and C-57 wells.
Well fracturing, completion and testing activities at McCully are also scheduled for several other wells this summer and fall, and will include operations at the McCully I-47, N-66, J-47, K-48 and C-48 wells. These wells, along with the E-67 well, are planned to be tied into the McCully gas gathering system during the late summer and early fall. Fracturing and testing operations are also planned for a well to be drilled at C-29 and for the three vertical shale gas wells to be drilled this fall at Elgin.