Corridor Applies for Pipeline Approval

Corridor Resources has submitted an application to the New Brunswick Public Utilities Board (PUB) to construct and operate a natural gas pipeline connecting the McCully natural gas field with the Maritimes & Northeast Pipeline. The proposed pipeline will be 8 inches in diameter and approximately 49 kilometers in length, and will open up markets for McCully gas in the Maritmes and New England. Pending timely regulatory approval, the pipeline could be available for initial deliveries by November, 2006. Corridor expects to have initial gas deliveries in the order of 25 million standard cubic feet per day (mmscf/d) by the end of 2006. The pipeline will have ultimate capacity for up to 88 million cubic feet per day with maximum compression facilities, providing Corridor with an opportunity to expand production from initial levels.

APA Petroleum Engineering Inc. has completed its analysis of the bottom-hole pressure data for the four McCully wells (C-67, G-67ST, K-57 and O-66) which were hydraulically fractured ("fraced") during October/November, 2005, as well as for the re-tested D-48 and J-65 wells. APA concluded that all six wells showed evidence of improved reservoir flow properties near the wellbore and that high-efficiency wells can be constructed at McCully using hydraulic fracture stimulation techniques. APA also concluded that, since average productivity for the six wells was higher than expected, the 2.5 mmscf/d/well average initial productivity estimated in the December 2005 Reserves Report is a reasonable expectation for fracced development wells in the McCully Field. APA reiterated its confidence that Corridor's planned development project is economic.

The McCully field, located near Sussex in south central New Brunswick, is estimated by Corridor to contain in excess of one trillion cubic feet of gas-in-place in the Hiram Brook formation. Two wells have been on production for almost three years supplying natural gas at a combined average rate of two million cubic feet per day to a limited local market. The continuing excellent production performance of these wells has demonstrated the potential for future wells in the McCully field to supply significant volumes of natural gas to larger markets in New Brunswick and New England. Corridor's planned development is located within an area that was independently appraised by APA Petroleum Engineering (APA) in December, 2005, and that represents less than 20% of the total field area. The APA report assigned proved plus probable gas-in-place of 252 billion cubic feet (bcf) and proved plus probable recoverable sales gas reserves of 119 bcf (79 bcf net to Corridor's interest) to the area assessed.